Three innovative solutions to reduce group plan costs and improve outcomes
by Mark Manquen, CPA, MSTMr. Manquen, a principal with the benefits firm Manquen Vance, has provided direction to both large and small clients to assist them in managing their group benefit plans. His expertise includes insurance, employee benefits administration, healthcare reform and legislative and regulatory analysis. Visit manquenvance.com
Group health plans have been used for decades by employers to provide viable healthcare coverage for their employees and as a valuable fringe benefit to attract and retain talent. Naturally, not all plans are created equal. But what distinguishes a successful group plan from a costly and ultimately unworkable financial burden depends on the patient experience, health outcomes, and, of course, structural details that can have a dramatic impact on the cost and ROI of the plan.
The good news is that there are proactive steps employers can take to implement and manage plans that lower costs and improve outcomes for groups. Among the most impactful of those steps are the implementation of health and wellness centers, the use of pharmacogenomics (utilizing gene mapping to better prescribe drugs), and participation in drug subsidy programs.
Together, these elements can do things like encourage and reward participation, identify and reduce the incidence of chronic conditions, and provide a better overall experience for employees. The result is not just lower costs, but healthier and happier employees. That dynamic leads to a cascade of beneficial effects, from recruiting and retention benefits, to greater productivity and less downtime.
Health and Wellness Centers
Health and wellness centers are the definition of a win/win: a benefit to both members and employers alike. When implemented correctly, they aren’t just effective, but cost-effective, with low start-up costs and potentially significant ROI in terms of health outcomes and lower long-term costs.
Employers who offer health and wellness centers can expect reduced turnover and increased productivity from their team. For employees, the benefits of utilizing a health and wellness center begin with convenience and more affordable services, and also typically include more face-time with doctors and other medical professionals. Ultimately, that engagement leads to more personalized care.
There are structural and logistical benefits for employers, as well. Growing companies will enjoy the fact that they are easily scalable. And a customized staffing model means centers and programs can be tailored to meet the specific needs of an organization. The ability to offer pharmacy services through an in-house pharmacy dispensary affords similar control and customization potential, while simultaneously unlocking savings that incentivize employees to use the service.
Finally, the potential to utilize baseline and ongoing biometric screening and wellness tracking to gauge progress and boost participation is a potentially game-changing benefit. When these features are implemented and administered effectively, they can provide a dramatic improvement in long-term health status and outcomes. In the best examples, they can even fundamentally change the health and wellness culture of a workplace.
Pharmacogenomics, using gene mapping to identify individual health needs and prescribe medications that are more likely to be effective for the individual patient, is an intriguing and potentially game-changing new field. While prescription protocols have traditionally been based on broad-brush statistical models (in other words, the drug most likely to be safest and most effective for the largest percentage of patients), the degree to which individual biology varies means that there will always be some patients who respond better than others to various medications. There’s a reason why those dire side-effects warnings are presented so prominently in pharmaceutical advertising and medication documentation.
That’s where pharmacogenomics comes into play. By evaluating the gene structure of the individual, doctors can determine an individually customized course of treatment. This practice has the potential to reduce unnecessary or ineffective prescriptions, lower incidence of side effects, and deliver medication and treatment solutions that work well the first time.
While there are understandable concerns about patient privacy and personal medical data, the Genetic Information Nondiscrimination Act (GINA) has been in place for more than a decade, and it specifically prohibits denial of coverage due to an individual’s genetic profile. While this technology is still maturing, pharmacogenomic services are available through a number of providers. Employers would be wise to ask about what options are available to them.
Subsidy programs are arguably one of the least understood—and yet potentially most impactful—ways to reduce group plan costs.
Many group plans pay for prescription drug costs for employees through a self-funded model where they sign an agreement with a prescription drug program like Express Scripts. Subsidy programs give employers a mechanism through which they can get some of that money back. Because a small percentage of high-cost drugs, typically used to treat very specialized conditions, often make up a disproportionately high percentage of spending on a prescription drug program, savings on select drugs can add up very quickly. Some third-party providers facilitate access to Federal subsidy programs that unlock those savings. Best of all, those cost reductions are guaranteed (typically around 15%).
Because the member experience doesn’t change at all (outside of using designated pharmacies)—employers take the same medications and pay the same cost—there is virtually no reason not to take advantage of these programs. In today’s complicated healthcare landscape, this is one of those rare examples of a program that requires no trade-offs: it’s all benefit.
Employers who take advantage of these solutions to enhance their group plan can reasonably expect to reduce plan costs and improve health outcomes. The result is fewer risks and improved productivity and performance from a happier and healthier workforce.