by Kevin Klein, Manager, Strategic Customer Engagement, at Kaiser Permanente
Every year, employers in Washington offer various health plans to meet the health care needs of their employees. Plans range from HMOs with specific providers to PPOs with broad provider access to—more recently—defined contributions in conjunction with private exchanges.
Various combinations of copays, coinsurance, deductibles, and maximum out-of-pocket payments are compared to find the optimum combination that provides employees the coverage they seek at a cost the company finds acceptable.
But how do those benefit plans really help companies to contain health care costs? And how does employees’ health vary as a result of those plans?
Plan Performance Profiles: A health plan check up
To determine the ‘wellness’ of a company’s health plan, we perform annual Plan Performance Profiles for accounts with over 1,000 enrollees. Typically, I’ll join one of 20 medical directors in this program, and an account manager to work with Actuarial & Underwriting on each account.
Performance profiles examine a client’s utilization trends, plan costs, and quality of care received. Findings help determine what can be done together to lower costs, correct inappropriate medical usage by employees, and improve overall plan value. Clients pay particular attention to the portion of the profile that suggests what Kaiser Permanente and the organization can do together to address any care or expense issues.
In doing more than 220 such profiles over six years, we’ve found that no matter how well a plan is performing, there’s always room for improvement. Based on our experience, organizations can control costs by considering steps in three major areas: pharmacy utilization, wellness and engagement, and employee education.
For instance, through employee education, a government employer was able to substantially reduce their employee emergency room use and decrease their per-member, per-month (PMPM) costs by more than 7 percent.
In another example, a local trust was able to better manage their drug costs and spending by advocating more for the use of generic drugs. Stressing online communication through secure emails, virtual care, and online services rather than clinic visits helped PMPM costs stay relatively flat—rising only 2.2 percent over four years
General guidelines for any employer
Through our work with large employers and other purchasers a number of general recommendations have surfaced that any company can adopt as best practices to help improve the health of their employees and reduce company health care costs. Here are four:
- Educate employees on the most appropriate avenue of care. Seeking urgent care, rather than the emergency room, for non-life threatening issues can dramatically reduce costs. Care from urgent or convenience care centers resulted in savings between 74 percent and 94 percent when compared to treatment at an emergency room. Seeking diagnoses and treatment for common conditions via online visits at Kaiser Permanente costs only $10, far less than an office visit.
- Stress the cost-saving benefits of generic drugs over brand-name counterparts. The FDA estimates that generic drugs cost up to 85 percent less than their brand name counterparts. Refilling prescriptions by mail can further save even more. A 90-day refill typically costs two-thirds the amount when mailed compared to on-site pickup.
- Address health issues prevalent in your population. Do you have an older staff that would benefit from chronic condition management? Is your industry one where workers commonly smoke and would benefit from a tobacco cessation incentive? Programs tied to your employees’ specific needs are key to seeing real health improvement.
- Where possible, have all employees enrolled in the Kaiser Permanente HMO plan rather than split between HMO and a PPO. By doing so, a children’s school with multiple campuses was able to reduce their health care costs by nearly 15 percent.
A true partner in coverage should be able to work with companies to find the optimal combination of benefits and costs for their employees. If not, it might be time for a new health plan partner.