Tailored wellness programs improve the bottom line

The article below was published on June 21, 2017 by Employee Benefit News, written by Alicia Kelsey.

Employer-sponsored health plans are taking up an increasing amount of real estate on companies’ operating budgets, and management has had to get creative in order to slow the rise in costs.

One creative solution that companies have turned to is a customized employee wellness program. By using data of the health of their population, enlisting industry specialists and vendors to help structure plans, and applying new technologies, many employers are seeing that tailored plans are surprisingly effective at managing costs.

“Tailored” is the key word when creating an effective employee wellness program. The first step is for an employer to know the health issues that their employees, and their spouses and dependents face. This is commonly done by asking plan members to complete a health risk assessment. Health reimbursement arrangements now include such details as average hours of sleep per night, nutritional and exercise habits, and biometric data including weight, cholesterol levels and blood pressure.


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The latter information in particular, introduced into the HRA process in the past decade, adds the critical physician component into health management. Typically collected by third-party vendors following doctor visits for privacy reasons, biometric details provide a superior snapshot of the overall well-being of a person. This data, when paired with advanced claims details and analysis, have vastly improved companies’ abilities to tailor their employee wellness programs to their employees’ needs. The more a company can perfect that tailoring, the more effective that company will be at managing costs and risks.

Technology has notably played a key role in improving the data available to companies and increased the participation and utilization of their wellness programs. Whereas physical activity was once self-reported, for example, a fitness device can now provide not only more accurate, but also more extensive information.

Similarly, programs can be administered online, increasing ease of use and reducing implementation costs. Many wellness companies have the ability to sync fitness activity from devices into their platforms so it can be managed all in one place.

It’s difficult for companies to manage all of this on their own, and it’s not a one-size-fits all solution. While there are many pre-existing program options out there, it’s better to tailor it to a company’s population. In the past decade, the number of options available has increased exponentially. Companies now have access to wellness tools of all shapes and sizes — arguably to an overwhelming degree. In other words, now is a good time for companies to look at their wellness programs and ask some sharp questions. Is the program tailored to the company’s employees? Does it meet the employer’s goal?

An effective program requires a concerted effort from the company’s leadership team. To incorporate a properly designed wellness program, a company must take time to determine both the needs of its employees and the goals of the company.

A third party — usually in the form of an insurance broker — can provide key assistance in these efforts by bringing in both the health claims data, benefits plan integration and an extensive knowledge of the wellness program options available. They have the ability to help the employer research and vet the right wellness vendor for the issues plaguing their population as well as fit it into the companies’ overall employee benefits strategy.

Wellness programs are no longer a stand-alone initiative. They are becoming more baked into the overall management of a company’s health population. With increasing healthcare costs, now is a perfect time for companies to revisit how they are managing their wellness program and what can be done to align it with their overall benefits goals.

Corporate Fitness & Health

Alexa Has Health Answers

alexaIn the race to bring health-related information to your digital world, Amazon is certainly not falling behind. Beginning in early March, Amazon enabled “Alexa” users to obtain answers to medical questions. According to a press release, with help from WebMD, Alexa devices will respond to medical questions with physician-reviewed, medically appropriate answers in plain, understandable language. Answers to questions such as how to treat a sore throat or the side effects of certain substances can also be sent in text form to those using the Alexa app.


Millennials Drive HSA Growth

dgb-millennialsThe State of Benefits report from BenefitFocus shows that workers under the age of 26 are investing 20% more of their salary in HSAs than other generations. This is certainly due to the fact that nearly half have elected to enroll in high deductible health plans in 2017. While PPO plans remain very popular, especially among older adults, employee contributions to HSAs and FSAs are rising. A growing interest in savings among young people is another factor contributing to the increased popularity of HSAs.



Three Approaches to Controlling Rx Costs

The article below was published on May 11, 2017 by the Mercer Signal, written by David Dross.

With all the uncertainties around healthcare legislation swirling, cost control of pharmacy spend remains top priority for employers. On one hand, employers obviously want their employees to have access to the medications they need: drugs like insulin, blood pressure treatments, and cholesterol blockers have long played a critical role in employees’ health. But now new specialty biotech drugs – some of them true medical breakthroughs – are flooding into the market, at costs much higher than previous therapies. Drug prices spiked by 9.8% between May 2015 and May 2016, and there are more sharp increases ahead. Drug costs are quickly becoming unsustainable, for both employers and, increasingly, plan members. Many high-cost brand name drugs may have rebates to reduce their net cost, but the member or patient typically does not see these rebates so their out-of-pocket cost is still high. And even the cost of some generic drugs has risen dramatically.

Fingers are being pointed everywhere—from regulations and research to the cost of lawsuits when new drugs perform poorly. While other stakeholders work on those issues, there are actions employers can take to shift the equation in their favor. Here are a few ideas:

Analyze the data on prescription drug spend in your plan

Prescription drugs are the top driver of health benefit cost increases today. In a recent report by the Pharmacy Benefit Management Institute, pharmacy benefit costs increased 10.2%, driven by 19.2% growth in specialty pharmaceuticals.

It’s important to know what’s driving cost growth in your program. When looking at your data, here are a few things to focus on:

  1. Drugs – What drugs are plan members using?
  2. Channel – From where patients receive their drugs and are they leveraging the lowest-cost channels?
  3. Supplier – Are you maximizing the prescription benefit manager relationships?
  4. Care – How do the drug therapies match up to best practices and evidence based medicine?

Educate employees on what they can do to lower their Rx costs

Employers can help employees be smarter when talking to their physician about their medications and making purchasing decisions. If your program includes any of these cost-saving Rx benefit features, make sure your employees understand them:

  • Lower copays for generic drugs
  • Lower copays for drugs in formularies
  • Preferred pharmacies
  • Mail-order suppliers
  • Prior authorization requirements
  • Step therapy requirements (members try lower-cost drugs first before they can move up to higher-cost prescriptions)

Focus on specialty drugs now

Specialty drugs for complex conditions account for 38% of all prescription spending even though they are used to treat about 1 to 2% of all patients. (Consider this recent example of how one employer discovered just two plan members were accounting for 2.5% of their total health budget due to specialty medication prescriptions.) The most expensive biologic breakthrough treatment regimens can exceed $750,000 per year. For the entire US healthcare market, specialty medication spending has nearly doubled since 2011, reaching more than $160 billion. With 40-50 new specialty medications set to enter the market each year, there is no end in sight.

To help gain control over your spending on specialty drugs, consider working with an expert to conduct a specialty diagnostic of medical and pharmacy plans to assess the current state and identify areas for improved management. Once the diagnostic results are in, employers can make informed decisions on revisions to their plan structure. We see savings typically in the 5-10% range. However, these savings occur in the short-term, and so it is a good idea to revisit the plan structure at least semi-annually as provider capabilities change over time.

What Can Value-Based Primary Care Mean to Health Plans?

The trend from volume-based to value-based medical care is intended to change the focus from individual units of care to the overall health of a patient or a patient population. In very simple terms, value-based care is intended to bring cost and quality together.

For payers, it means moving from traditional fee-for-service reimbursement to an environment where claims data can be analyzed to help identify redundancies or gaps in care – an approach we have employed for years.

For primary care physicians (PCPs), value-based care should help them focus on improving the patient’s well-being, rather than concentrating on checklists or spreadsheets. Again, the goal is to link evaluation and compensation to clinical outcomes rather than volume.

For members, basing payment on value means changing measurement from a visit or diagnosis to how all aspects of care affect a patient or patient population. The bundled payment experiment instituted by CMS for Medicare-funded joint replacements is a familiar example.

While there will be many bumps along the road to value-based primary care, the benefits should include increased cost transparency and greater employee engagement. If everyone involved – patients, physicians and hospitals – has access to the right information at the right time, better decisions about cost, quality and risk should result.


Tell your Senators to Preserve the Employer-Based System and Permanently Repeal the Cadillac/excise Tax!

The National Association of Health Underwriters (NAHU)

Operation Shout!

DGBTakeActionOn May 4, the House of Representatives passed H.R. 1628, the American Health Care Act (AHCA), a reconciliation bill to repeal and replace portions of the ACA. It will now be considered by the Senate, where it is expected to be significantly altered, including possibly addressing two critical NAHU policy priorities: the employer exclusion of health insurance and the Cadillac/excise Tax. NAHU strongly opposes any efforts that would undermine the employer-sponsored health insurance system by eliminating or placing a cap on the employer-tax exclusion of health insurance and is strongly advocating a full repeal of the Cadillac/excise Tax, which under the AHCA would only be temporarily delayed.

More than 175 million Americans currently receive their coverage through the employer-based system, largely due to the tax exclusion where employers provide contributions for an employee’s health insurance that are excluded from that employee’s compensation for income and payroll tax purposes. Proposals that would cap the exclusion would devalue the benefit and serve as one of the largest tax increases in history for middle-class Americans, forcing many to drop employer-sponsored insurance, including dependent coverage, and be forced to seek coverage in the volatile individual market, where premiums are ever-increasing. Employers would be incentivized to only offer coverage to their employees that would fall below the value of the cap in order to avoid paying any increased taxes, potentially resulting in a race to the bottom for employers to sponsor insurance that wouldn’t meet the cap’s thresholds and further shifting costs onto employees.

In addition to opposing proposals to cap the exclusion, we are strongly advocating a complete repeal of the Cadillac/excise Tax. Currently set to take effect in 2020 under a two-year delay, this tax calls for a 40% excise tax on the amount of the aggregate monthly premium of each primary insured individual that exceeds the year’s applicable dollar limit, which will be adjusted annually to the Consumer Price Index plus one percent. Given that the pace of medical inflation is well beyond that of general inflation, the tax is destined to outgrow itself in short order and many employers will be impacted by the cost of the tax and the enormous compliance burden that the tax creates. The AHCA, as passed by the House, would only delay the tax until fiscal year 2026.

Over the coming weeks, as the Senate debates the AHCA and the other healthcare-reform proposals, we urge all agents, brokers and your clients to tell your senators not to do anything that would undermine the employer-sponsored health insurance system and to fully repeal the Cadillac/excise tax. You can help us spread the message by taking action below:

  1. Contact your senators. Send an Operation Shout today asking your senators to oppose any changes the employer tax exclusion and to support a full repeal of the Cadillac/excise Tax. You can also call your senators at the numbers below.
  2. Tell your employer clients to take action. Your employer clients would be most directly impacted by the elimination or cap of the employer tax exclusion and are seeking a full repeal of the Cadillac/excise Tax. Tell them to take action here.
  3. Share your story. As a licensed insurance specialist who works closely with employers to help them offer and utilize employer-sponsored health insurance, stories about how the employer tax exclusion directly impacts your clients will demonstrate the value of the exclusion and the need to preserve it, as well as the need to fully repeal the Cadillac/excise Tax. We will share your stories with appropriate legislators and staff. You can share your story here.

Take Action today and tell your senators to preserve the employer-based system and permanently repeal the Cadillac/excise Tax!

Don’t want to send an email? No problem, you can also reach your senators by phone:
Sen. Richard Blumenthal (D) can be reached at (202) 224-2823.
Sen. Christopher Murphy (D) can be reached at (202) 224-4041.

This call to action is designed as an email message to your legislators. You are welcome to use the prepared text as talking points to call your legislators, or to expand on the prepared message to share your personal story on how this issue will impact you and your clients.

Millennials Welcome a Personal Touch

After numerous articles advocating technology and social media as the only sources of information valued by young workers, a recent study by MetLife has shown that nearly two-thirds of millennials favored a one-on-one discussion with a benefits specialist when trying to understand their employee benefits.

Believe it or not, millennials even lead other generations in consulting with family and friends on benefit-related issues, showing that they value the personal experience when it comes to complex matters. Because they have become accustomed to the way technology streamlines information, they are looking for the facts without a lot of fluff. Nonetheless, one-on-one consultations and phone conversations are proving to be effective in giving young people the personalized information they need to understand their healthcare benefits and make informed decisions.