Take Control of Health Care Benefits

Managing the overwhelming options for self-funded medical plans

By Jim Walleshauser

President

Nova Healthcare Administrators

 

The Kaiser Family Foundation and PBGH recently conducted a survey of more than 300 large employers about their views around the cost of health care. Overall, the results are not surprising with most employers agreeing that the cost of providing health benefits is unsustainable. Most notably, 87% believe the cost of providing health benefits will become unsustainable over the next five to ten years. Enter the self-funded plan option. The value in self-funding a benefit plan is control, consistency, and customization. But the level of flexibility and the variety of options to customize a plan can easily become overwhelming.

Health care plans must be functional and targeted to achieve the expected outcomes. The flexibility of choice in self-funding and the spectrum of cost management opportunities including network, telehealth, wellness, medical management, pharmacy, plan design, and reimbursement solutions available can be vast. Self-funded benefits offer so many options that “going it alone” can feel more like an experiment and less like a successful formula. Like any experiment, there is a process of trial and error. Except, when it is your money and your people, it feels like there is less room for error. Determining your tolerance for risk, understanding your plan goals plan, and evaluating the plan’s demographics are key to making the right choices to positively manage risk, cost, and care outcomes.

If you think about a prism – light enters the prism on one side and, through refraction, light exits in different wavelengths. Any plan sponsor, entering a relationship with a TPA, will enter the relationship with unique membership demographics, plan goals and tolerance for risk. The outcome, or rainbow, will look different for each group based on those factors. Each color of the rainbow has its own gradients of color, or in terms of benefits, use of benefits and vendor solutions that may be established, emerging, or innovative. With all the vendor solutions available it’s important to understand the needs of each self-funded plan to optimize plan build and plan management.  Each employer, supported by the guidance and expertise of the plan administrator, creates their own color map based on their needs within the spectrum.

If the goal is to attract and retain top talent, offering a strong benefits program is critical. Evaluating plan performance will ensure your benefits program is not only an attractive incentive for employees but also important in finding the right benefit solution for your unique population. If the goal is to manage cost, it will be important to evaluate and address cost drivers in a strategic way because cutting cost does not have to mean cutting benefits. So how do you get started?

Employers need a partner to support plan evaluation to identify cost drivers and evaluate the cost management opportunities that balance cost, demographics, and plan goals. In one example, a client experienced a spike in claims related to back pain. Given the workforce, it was important to identify if this was a job-site safety issue or something else. With a little digging, those claims for back pain were the result of a surge in kidney stones sparked by dehydration. With plan evaluation and a little water comes a solution that benefits the plan and the plan’s members. With the right partner to engage in conversations, each opportunity for data review provides another opportunity for conversation around improving plan performance and health outcomes.

KFF. 2021. “How Corporate Executives View Rising Health Care Cost and the Role of Government”, April 29, 2021.