Today’s Worksite Sale

Adding Real Value To The Benefits Portfolio

How Fintech is providing new cost-efficient solutions for plan sponsors

by John Thornton

Mr. Thornton is Executive Vice President, Sales & Marketing, Amalgamated Life Insurance Company, a leading provider of comprehensive insurance solutions. Visit

Skyrocketing healthcare costs continue to plague plan sponsors. The ongoing dialogue in Washington about implementing cost-saving measures has done little to stem the tide of too many unnecessary physician and Emergency Department visits or out-of-control specialty drug costs. Our legislators should know that business executives place a high priority on containing healthcare costs. This was reflected in the 24th Annual Willis Towers Watson Best Practices in Health Care Employer Survey.

93% of employers surveyed cited “increasing health care affordability for employees, while controlling costs for the organization” as their top priority. For this reason, many healthcare plan sponsors are looking at new technologies and services that help meet this objective. By offering advanced telehealth solutions, new specialty drug management services, and utilization management services, advisors can demonstrate real value to their clients.

Telehealth Gaining Traction

The Willis Towers Watson survey also noted that companies are promoting more use of virtual care models such as telehealth. During the pandemic, telehealth became a necessary option for those wanting to speak with a physician but who were concerned with contracting Coronavirus. In fact, KPMG reported that telehealth utilization rates rose to 133 times their pre-pandemic levels by the end of 2020. Also driving the telehealth option was the $2 trillion COVID-19 relief package Congress passed in 2020 which included telehealth programs for rural and critical-access hospitals. It also added 85 Medicare-covered services to its list of those that could be provided using telehealth.

Many Americans who have used telehealth have found that it is convenient and appropriate for certain needs. For their part, providers too have been increasingly relying on telehealth. An American Medical Association (AMA) three-year study conducted from 2016 to 2019 found that providers had gone from telehealth adoption rates of 14% in 2016 to 28% in 2019. This finding is supported by AmWell’s 2019 Physician Survey which showed that 22% of providers had virtual patient visits the prior year, but one year later, 80% had virtual visits. While traditional telehealth methods (i.e., Face time with a physician, a prescheduled phone appointment) have been the primary format, today, advisors can bring advanced telehealth platforms to their clients that offer far more than standard formats.

These next-generation telehealth platforms integrate a nurse line with a telemedicine program. They enable individuals with a medical problem or question to call into a dedicated toll-free line staffed by experienced Registered Nurses (RNs) who are available on a 24/7 basis (no waiting for an appointment). The nurses have clinical experience across multiple disciplines and are able to conduct a thorough virtual intake with patient information (e.g., contact information, symptoms, reason for call, etc.) recorded and input into the patient’s Electronic Health Record. The call would then be triaged with the nurse either assisting the individual directly or transitioning the call through the integrated nurse line/telehealth platform to the next level of medical support. This can be either the patient’s primary care physician, a specialist, a health advocate, or behavioral health professional.

By eliminating an unnecessary visit to a physician’s office, urgent care facility or hospital emergency department, the plan sponsor’s costs and member’s co-pays and coinsurance costs are significantly reduced. Not having to wait to have a medical problem or concern addressed and sizeable cost reductions are not the only benefits. These platforms also provide a user-friendly dashboard that can be accessed from any device (i.e., PC, laptop, tablet or smartphone) thereby supporting an improved continuum of care. In addition to scheduling a telehealth appointment and accessing virtual advice and care, individuals can gain health and wellness information, health risk assessments, and even certain at-home medical screenings.

Advisors bringing new telehealth solutions to their clients should know that there are some consumer demographics that influence the adoption of telehealth. KPMG’s research found that individuals aged 25-40 have highest telehealth adoption rates, and that there is a correlation between those residing in urban versus rural areas as to adoption rates. Urban dwellers are more inclined to use a telehealth option, which likely stems from their greater use of technology over rural area residents, and their higher incidence of behavioral health issues, for which telehealth is heavily used. Income levels are also a factor with wealthier individuals more inclined to use telehealth compared to those with lower incomes.

Providing a Rx for Escalating Specialty Drug Costs

When changes are adopted, healthcare spending can be reduced along with insurance coverage denials resulting from the use of unproven treatments or administrative errors...

With CVS Health reporting that specialty drugs accounted for 52% of pharmacy spending in 2020, and the costs for these drugs continuing to increase over the past two years, it is clear that something needs to be done. Still, consumers and plan sponsors continue to drown in high specialty drug costs. Compared with other drugs, specialty drugs are costing employers more than $2,000 per month per patient. Some cost even more. For example, the drug Tretinoin, which is used to manage certain Leukemia symptoms, is estimated to cost $6,800 monthly. Costs for many drugs treating cancer and other chronic conditions can be as high as $85,000 annually based on the AARP’s RxPrice Watch data. Annual costs for specialty drugs used to treat rare medical conditions can be as much as $250,000, with one of the most expensive specialty drugs having an annual cost of $750,000 per year.

Clearly, employers/plan sponsors nor their members can continue to subsidize these steadily rising costs. To date, pharmacy benefit managers (PBMs) have offered some relief to employers/plan sponsors through leveraging their purchasing power with established pharmacy networks, providing a negotiation advantage. Employers are also applying new strategies to tackle these costs, none of which are particularly popular. They are increasing their plan members’ copayments. Additionally, many are limiting specialty drug prescription durations, and requiring their plan members to follow a step therapy schedule whereby they must use less costly drugs before trying more costly specialty drugs. Others are requiring their members to use mail-order pharmacies. These measures are band-aids at best, for a problem that requires major surgery. One measure that takes a more holistic approach and is driving more significant cost reductions are new pharmacy benefit administration (PBA) services.

The most robust of today’s PBA services focus on helping plan sponsors better manage high-cost specialty drugs without compromising service to their members. Plan sponsors should seek out a PBA that provides members access to a national network of at least 68,000 retail pharmacies with mail order capabilities. When used in tandem with a drug cost management service, plan sponsors and their members gain access to alternate forms of funding for specialty drugs which help drive significant savings. Using this approach, which aligns primary, secondary, and tertiary payer options, savings of 50% on specialty drugs can be achieved. There is also the additional fiscal benefit that the PBA/drug cost management services support which is enabling plan sponsors to reduce or limit their stop loss liability. Advisors can leverage this approach when presenting these services.

In addition to the financial benefits, these services feature user-friendly, easy to navigate platforms. Their visually engaging dashboards and intuitive functionality enable users to access real-time data. Users benefit from robust tools that connect plan members on a 24/7 basis to drugs and related healthcare information accessible from any mobile device or desktop. Further, using a platform’s member portal and quick response (QR) codes provided on select specialty drug labels, plan members can access drug information and videos on demand. The platforms also send real-time alerts and refill reminders. This service is especially appealing to self-funded plans with 200 or more employees/members.

Managing Healthcare Utilization

Based on data compiled by the Peterson KFF Health System Tracker, in 2019, 5% of the U.S. population was responsible for almost half of all health spending. The 5% of people who had the highest health spending averaged $61,000 in annual expenses, while the top 1% of spenders averaged over $130,000 annually. Managing the over-consumers and making sure any healthcare service/treatment is warranted is part of the focus of utilization management service providers. Their role is to determine the appropriateness and necessity of various elements in patients’ treatment plans and to recommend alternative facilities to achieve cost reductions including in prescription drug cost expenditures.

Utilization management services are provided by third-party medical case management firms that apply evidence-based data according to URAC standards relating to various protocols and treatments. After reviewing an individual’s treatment plan and facilities being used, the utilization management service provider flags those which are not deemed medically appropriate or needed. When changes are adopted, healthcare spending can be reduced along with insurance coverage denials resulting from the use of unproven treatments or administrative errors such as policy exclusions or documentation errors. Utilization management also helps mitigate risks associated with noncompliance to regulatory mandates (e.g., Department of Labor standards and ERISA for self-funded groups), in addition to supporting goals relating to population health management.

Closing Remarks

Advisors, who step beyond their recommendations related to insurance products and other employee benefits, and venture into the new territory of future-ready health care cost reduction tools, will project themselves to be on the leading-edge of today’s healthcare market and the challenges it poses to employers/plan sponsors nationwide.