Seinfeld and Your Employee Benefits
4 Things Your Medical Plan Should Focus On
“Everyone else is doing something; we’ll do nothing.” – George Costanza.
Most Seinfeld episodes are about the particulars of daily life. This worked great for Jerry, George, Elaine and Cosmo Kramer, but it doesn’t necessarily work for your company medical plan. In the world of employer-sponsored healthcare where everyone else is doing nothing, you should do something. Keeping your fingers crossed when your medical renewal approaches isn’t a sound strategy.
To take control of your cost and impact your medical plan in a positive way, focus on four things: (1) consumerism, (2) wellness/biometrics, (3) cost-containment methods and (4) partially self-funding your plan.
1. Consumerism: Consumerism can come in a multitude of forms. Installing a Health Savings Account (HSA) is one of the most common ways. However, it’s not an effective tool if no one enrolls in it. You must educate and financially incent your employees to select it. An HSA aligns the member’s financial interest with yours.
Decision reward programs are another method growing in popularity. They pay the member to make the right decision. For example, one of your employees is prescribed a MRI. They search through an app or call in to find a nearby location to get that MRI done a lot cheaper than at a hospital. If this effort saves $1,000 and your plan is partially self-funded, you could share a portion of that savings with the employee as an incentive.
2. Wellness/Biometrics: Improve the health of your employees and members, and reduce the severity of claims. If you host biometric screenings and incent your employees and spouses to participate, there’s a good chance you can impact the severity of future claims. For example, you may identify someone with high cholesterol and partially clogged arteries. That employee/spouse may require a coronary stent, which can be a low-cost procedure as opposed to coronary bypass open heart surgery if it went undetected.
3. Cost containment methods: These methods are designed to provide the same procedures with better outcomes and lower pricing. Using centers of excellence, which are special networks that accept bundled case rates and have the best outcomes for transplants, orthopedic surgeries, congenital heart disease and cancer to name a few, is an extremely effective method to reduce the cost of claims.
You can also take advantage of prescription drug carve-outs. There are consortiums and cooperatives that purchase prescription drugs in bulk like a Costco or Sam’s Club and have negotiated a complete pass-through of rebates to their company members. This essentially delivers the same drug to your members, but for less cost.
4. Partially self-funded: This is the only way to control cost over the long run. Once the majority of your members are in consumer-driven plans, participating in wellness and biometric screenings and you have other cost containment measures in place, it’s time to take advantage of those cost controls by going partially self-funded, where the company retains the financial reward of these efforts.
Unlike our friends on Seinfeld, doing nothing isn’t an option. For a company that wants to continue offering a competitive medical plan at a fair cost, doing nothing can result in one of two things or even both: 1) low level of benefit due to the cost, or 2) an unaffordable employee benefit expense.
To find out how to avoid doing nothing, contact a member of the ‘A’ Team.
- A Home Run for Employee Benefits
- Employee Benefits Calculator
- 3 Tips for Making Employee Benefits Sexy
- Partially Self-Funded Medical Plans Are Like a Great Chili
- You Paid How Much?!
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