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3 Tips for Improving Healthcare Literacy

Today, innovative cost-containment solutions are helping employers “curb” the increasing cost of healthcare.  However, these solutions are only as good as the education tied to them.  A solution without effective education is useless and can even be costly.

Employee education has been a sticking point in the employee benefits world.  Many employers haven’t done a good job educating employees and have thus missed the boat on containing costs. According to a 2003 assessment (I know, old!) by the U.S. Department of Education, only 12% of U.S. adults have a proficient level of healthcare literacy. That is scary.

The days of educating the workforce about what they have, how much it costs and how to sign up are long gone. Stop repeating the same message year after year. The focus of your education has to be around improving the healthcare literacy of your workforce.

The good news is that there are consultants around the country creating some amazing messages. Folks like Jim Millaway, Gary Becker and Al Lewis are innovating the way benefit education is provided, helping employers reduce the cost of health insurance.

With that, let’s look at three employee education tips that can help you contain costs.

See Also: On Air Traffic Control and Health Costs

  1. Effective Education Is a Year-long Process

If your education strategy consists of nothing more than the annual open enrollment meeting, we need to talk and please keep reading! By the time your employees walk out of the meeting, they will forget 90% of what they heard; especially how to use a new cost-containment tool effectively. To ensure the new solution is a success, you have to keep the message in front of your employees all year long.

  1. Make Sure Your Message Helps You Accomplish Your Goal

Remember, your goal is to “curb” or even reduce the cost of your health insurance, so strategic education has to be a part of your long-term plan. Do not rely on the communication provided by carriers and vendors, as they are often too vague and provide information most of your employees already know (e.g. your smokers already know they should quit as their doctor has been telling them for years). To achieve your goal, you need to make sure your education aligns with the objective, improving health literacy. Focus on the kind of education that will help your employees help your medical plan save money. Strategic education is the wave of the future. Innovative solutions like Quizzify are giving employees the opportunity to become stewards of their own healthcare journey, helping both their checkbook and the bottom line of their employer.

  1. Your Message Has to Be Clear and To-the-Point

Trying to find the right avenue for educating the workforce is not easy. However, using newsletters and brochures to communicate your new cost-containment solution will not work because your employees will not read them. One way to get your message across effectively is through video. Videos only require employees to hit “play” and are short and to-the-point, and can be customized to convey the message you want.

Employees like the videos because little time and effort is wasted in watching and the employer is able to craft the message (with help) to best meet its objective. A video campaign can be a very effective way of improving the health literacy of your workforce through short, focused messages.

Crafting the right educational message is hard work and requires time and effort. But if it is done well, you will not only be happy about your new cost-containment solution, you will create a highly educated and empowered workforce that will have a positive impact on your bottom line.

3 Things to Know on PPO Networks

Employers across the country are looking to provide employees with the largest and widest PPO networks as a means of giving employees choice.  Somehow the health insurance industry has determined that networks should be “all-inclusive.” The more medical professionals and facilities in your network, the better your network is. It is time to raise a red flag on this kind of thinking. Before your organization looks to increase employee access to doctors and hospitals, there are three things you must understand about PPO networks.

Larger Networks Can Lead to Larger Plan Costs

You hear it all the time. Insurance carriers battle over who has the largest network both locally and nationally. Now, having a network with a national presence can be appealing if you are an employer with facilities and a workforce scattered across the country. However, a larger network opens the door for greater access to poor-performing physicians and medical facilities. The bigger the network, the greater the odds your employees are accessing doctors and hospitals who are not on the right side of cost, quality and outcomes. As a result, your medical plan’s costs continue to rise year after year.

See Also: Untapped Opportunity in Healthcare

A Network “Discount” Can Be Misleading

In a typical medical plan, the majority of the member population will use the plan via day-to-day services such as preventive exams, sick children and the occasional medication. For these folks, a network discount does an adequate job reducing costs for both the member and the health plan. However, imaging, surgeries and hospital stays are driving plan costs today, and it is here where a network “discount” can be misleading. Yes, network discounts are still applied to these services and, yes, the discounts can be 50% or more. However, when facilities are allowed to charge 400%+ of the limit allowed by Medicare, you are not getting much of a deal at all. To put it into simple terms, if I told you my iPhone is worth $2,000 but agreed to sell it to you for a 50% discount, I would still be ripping you off.

Networks Often Block Creativity

Recently, I had an interesting conversation with a national insurance carrier about a mutual client. After a thorough review of the client’s claim activity, we uncovered several facilities that were providing imaging services (MRIs, CT scans, etc.) at a low cost, much lower than the same services provided at other facilities. Knowing this, the client wanted to give members incentives to choose the low-cost facilities when needing imaging services by agreeing to have the health plan pay 100% of the service, saving both the member and the health plan money. However, we were told “no” by the insurance carrier because it had a duty to “keep the rest of the network happy.” If we are going to create change in the health insurance market, employers need to implement creativity into health-plan design. Unfortunately, most PPO networks discourage this kind of thinking.

Remember, there is a place for PPO networks within the healthcare industry. However, if you are an employer looking for creative ways to give your employees access to high-quality, low-cost doctors and hospitals, do not count on PPO networks to pave the way.

 

How to Push Back on Healthcare Premiums

If you are a CFO or HR professional reading this article, you are probably familiar with the typical renewal discussion with your employee benefits broker. It goes something like this:

Broker: “Well, the insurance company initially wanted a 12% increase.”

You: “How can that be? We have performed fairly well this year.”

Broker: “I agree, so we went back to the insurance company and negotiated the increase down to 5%. That is two percentage points below the industry average, so I suggest we lock it in and wrap up the renewal.”

This conversation happens all too often. Cost increases are the norm in the health insurance industry, and employers are satisfied with merely beating industry averages (while brokers are receiving pay raises because of commissions on the higher premiums).

By accepting these terms, employers may be overlooking a big problem.

See Also: 7 Tools for Cutting Insurance Costs in 2016

Let’s pretend the data below is your three-year insurance summary. Take a look and determine if you have had a successful run.

  • Enrolled employees: 300
  • Total health plan costs: $3.5 million
  • Average annual cost increase: 2.5%

At first glance, it would appear that you had a pretty successful stint. A 2.5% average over the past three years is definitely beating industry averages. So what is the problem?

A closer look shows you are spending more than $10,000 per-employee-per-year (PEPY). Was this really a successful three-year run?  No. You should be ticked off with this performance. because YOU WERE PAYING TOO MUCH TO BEGIN WITH.

For comparison, the average cost of providing a group medical plan in the state of Colorado is $8,160 PEPY. The average cost of providing a group medical plan in the U.S. is $9,504 PEPY.. By spending more than $10,000 PEPY, you are spending more than the average U.S. employer and significantly more than the average employer in Colorado.

Now, plan costs can differ based on industry and location, but the message here is clear. Do not be satisfied with merely beating industry averages. It is too easy to be satisfied when you are only comparing your current costs with your previous costs. If you are an employer that is already spending too much, it is time to challenge your broker and the status quo. Dig in and find out why you are paying too much, and begin implementing the appropriate cost-containment strategies that will help you reverse the cost increases (albeit small) that have affected your plan for far too long.