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April 2024  Volume 22, Number 4        

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Prioritize Care While Cutting Costs

As 2024 rolls on, employers expect healthcare costs to continue rising, making for the steepest increase in a decade, according to recent projections. With employer healthcare expenses anticipated to jump 8.5% nationwide, finding innovative solutions to reduce expenditures while supporting employee wellness has become paramount.

Self-Funded Plans Offer Cost Control

Self-funded or self-insured plans are an increasingly popular option, allowing employers to pay for employee claims directly while partnering with an insurer or third party to handle administrative functions. A key advantage is access to data pinpointing high-cost areas and enabling smarter decision-making around reducing expenses. Pricing and quality can be compared transparently across providers. As with any of these techniques, your broker can help.

Direct Contracting Cuts Out Middlemen

Another emerging trend is direct contracting between employers and health care providers through direct-to-employer (DTE) arrangements, often administered by third parties. Community-based DTE plans align incentives, enabling average cost savings of 10% compared to traditional insurance by eliminating insurer profit margins and gaining volume- based discounts from providers.

Optimizing Pharmacy Spend

With 91% of large employers concerned about escalating medication costs, managing pharmaceutical benefits is critical. Tactics include partnering with an effective pharmacy benefits manager, driving the adoption of lowcost generic alternatives where possible, and negotiating rebates.

Empowering Smarter Health Decisions

Beyond revamping plan structures, educating employees on accessing high-value care can substantially impact long-term costs. The new year represents an ideal opportunity to encourage preventative actions like routine checkups that detect issues early before they become larger expenses.

Concerning Statistics on Delayed Care

Delaying or skipping recommended medical tests and treatments due to cost concerns is commonplace, with 33% of Americans reporting these behaviors over the past year, according to the Kaiser Family Foundation. However, this penny-wise approach is ultimately pound-foolish, leading to more serious and costly health complications.

Steering Employees to High-Value Providers

To simultaneously improve outcomes and reduce expenses, many employers are adopting "steerage" strategies that guide employees to high-quality, cost-effective care sites for routine services and non-acute episodes. For example, shifting appropriate procedures from pricey inpatient hospitals to freestanding outpatient facilities can yield significant savings.

While identifying optimal providers requires upfront analysis, the long-term payoffs of steering can be substantial for employers and employees alike by avoiding downstream costs related to disease progression and complications.

Improving Health Literacy Year-Round

Traditionally, most employers have concentrated on health benefits communications during the annual open enrollment period. However, consumer education experts advocate adopting a year-round approach with bite-sized, easily digestible messaging that keeps benefits top-of-mind.

Working closely with brokers is the way to develop compelling multi-channel campaigns spanning digital, print, and interpersonal formats. Topics should cover the full scope of available benefits, money-saving strategies, and, importantly, how to optimize personal health outcomes by astutely navigating the care landscape.

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In this issue:

This Just In ... The Great PTO Upgrade: Over 80% of Employers Boosting Leave Policies

The Personalization Mandate: Tailoring Benefits to Boost Retention

Prioritize Care While Cutting Costs

Navigating Compensation in the Era of Transparency

Early Cancer Detection Saves Lives, Lowers Costs



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