Leveling the Self-Funding Field

The article below, titled Leveling the self-funded field, written by Robert Bull, was originally published by Employee Benefit Adviser on July 18, 2017.

Technology is changing every aspect of the way businesses operate — and that includes health plan self-funding.

It used to be that self-funding was limited to only the largest companies that could afford the manpower to either administer their own plans or develop their own proprietary administrative software. Today, new data technologies are leveling the playing field, making it affordable for virtually all employers to self-fund.

For too long HR teams have shied away from self-funding due to the perceived administrative burden. But technology has removed this barrier, making it easier to track eligibility and generate billing information. What used to be a painstaking manual process has been automated, and HR teams at self-funded companies can now provide richer benefits at a lower price. A good healthcare plan goes miles in attracting and keeping quality employees — and ensuring that they’re productive by minimizing absenteeism due to a lack of care for either themselves or their family members.

self-funding'Here’s what to look for when shopping for a top-notch self-funding solution:

1. The ability to consolidate information and manage all healthcare-related data from a single system. Most employers deal with multiple service providers — stop loss, vision, pharmacy, dental, medical, wellness, and third-party administrators, just to name a few. But they should insist that all of the relevant data is consolidated onto one system. For one thing, it’s much simpler and less time consuming to administer and pay all of their providers from a single source. For another, it takes much less time and effort to master a single application — as opposed to having to learn the ins and outs of each provider’s software.

When the data from multiple vendors are integrated onto a single platform, the time-consuming process of having to reconcile across providers every month is eliminated. The plan’s administrator can instantly determine counts and claims. Likewise, multiple payment processes can be eliminated in favor of a single, consistent payment method.

Best of all, HR can take all this data, which reflects employee behavior and everything related to treatment, and use it for predictive modeling. With that level of insight, the employer can develop a plan that truly meets its — and its employees — needs.

2. Data transparency. For an employer to take on the added risk of self-funding, it needs to be able to closely examine its data and determine the underlying trends. Without pricing and transaction transparency, it is impossible to perform a meaningful cost analysis.

As opposed to fully-insured plans, where the data is the property of the insurance carrier, with a self-funded plan the employer owns the plan’s data. And once the employer can access its claims, demographic and pricing information, it can make accurate decisions about what is best for the company and its employees.

The data can also be used to influence employee behavior. By educating a workforce about those behaviors that are wasteful and ineffective, the employer can reap significant savings for itself and its employees. And by analyzing the response rate to different messages and campaigns, HR can then determine what incentives would be useful to obtain even greater compliance.

3. Real-time data access. It’s not enough to have healthcare plan data; it needs to be timely or its utility is diminished. The best way for employers to be proactive is for them to be able to see what is happening with claims and cash flow on a monthly, weekly or even a daily basis. At a minimum, the employer should review its data at least quarterly. And the larger the employer, the greater the number of employees and claims, the more frequently the data needs to be examined.

Three years ago, it would have taken three weeks to scrub a mid-size employer’s claims data. Now it can take just two hours.

4. Safeguards. Data is power. That’s why an employer wants to ensure that only authorized personnel have access to healthcare plan data and analytics. There are legal and privacy considerations as well. That’s why it’s crucial to have robust security that maintains an audit trail of who touches what data and when. In case of an error or a breach, the event can be traced back to the people involved at the moment where it occurred.

Self-funding will continue to be transformed by technology. Cloud-based software is making it possible for ever smaller employers to implement and administer self-funded plans. Embracing and utilizing these tools can lead to lower premiums, greater access to health care and reduced costs for employer and employee alike.

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Lots of Love for LaCroix

If you’ve joined the “end sugary drinks” club, you may be enjoying LaCroix or one of several other unsweetened, carbonated waters. What makes them taste so refreshing? According to scientists and registered dieticians, studies show that while drinking any cold water will avoid the 140 calories and 10 teaspoons of sugar found in a can of soda, the carbonation found in a cold LaCroix, Perrier or other unsweetened, carbonated water does enhance water’s ability to quench a thirst.

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How Are You Feeding Your Heart?

feeding-your-heartFor those who simply cannot do without their favorite foods, here’s a list of the things that many of us love, but our hearts wish we would avoid.

Fast Food – Most of it has poor nutritional value, including plenty of fat, calories and processing.

Candy – Go with a small quantity of dark chocolate if you must have some candy, but the sugar just isn’t a good thing for your heart.

Ice Cream – Cardiologists warn that even small amounts of ice cream provide too much fat and sugar – it’s that simple.

Pastries – Few things taste better than cookies, pies and cakes but in high doses, the sugar, fat and gluten can lead to obesity.

Pizza – Pizza nights are tough to beat, especially in cities like Chicago and New York. But unless you make your own, using healthier ingredients, you’re consuming too much fat and salt.

Soft Drinks – These are simply full of sugar and while they may be refreshing on ice, soft drinks are lacking in nutritional value.

Processed Meats – Ham, bacon, hot dogs and other deli meats usually contain lots of salt, fat and even nitrates. Too much salt can boost blood pressure, another risk factor.

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4 ways employers can prepare for healthcare changes

The article below was published on June 23, 2017 by Employee Benefit News, written by Mark Johnson.

The new healthcare bill, revealed by U.S. Senate Republicans Thursday, could bring significant changes to organizations and their employees. Granted, there’s a long way to go before any Obamacare replacement legislation is signed. But health insurance is a complex component of running any business, and it’s important that employers start preparing for what might come.

Here are four actions items employers should be addressing now.

1. Create a roadmap. A compliance calendar is a helpful tool in identifying major deadlines. Employers are legally obligated to share health insurance and benefits updates with their employees by certain dates. Employees must be given reasonable notice — typically 30 days prior — of a major change in policy. There will likely be a set date for compliance and specific instructions around notice requirements that accompany the new legislation.

One step to compliance is adhering to benefit notice requirements. Benefit notices (i.e., HIPAA, COBRA, Summary Plan Descriptions, Special Health Care Notices, Health Care Reform, Form 5500 and others) vary by the size of the organization. Other steps can be more involved, such as required changes to plan design (e.g., copays, deductibles and coinsurance), types of services covered and annual and lifetime maximums, among others. Create a compliance calendar that reflects old and new healthcare benefit requirements so you can stay on track.

Senate Majority Leader Mitch McConnell (R-Ky.)
Image Source: benefitnews.com

2. Rally the troops. Managing healthcare compliance spans several departments. Assemble key external and internal stakeholders by department, including HR, finance, payroll and IT.

Update the team on potential changes as healthcare legislation makes its way through Congress so they can prepare and be ready to execute should a new bill be signed. HR is responsible for communicating changes to employees and providing them with information on their plan and benefits. Finance needs to evaluate how changes in the plan will affect the company’s bottom line. Payroll must be aware of how much of an employee’s check to allocate to health insurance each month. In addition, payroll and Human Resources Information Systems (HRIS) are used to track and monitor changes in employee population, which helps employers determine benefit notice and compliance requirements. All departments need to be informed of the modified health insurance plan as soon as possible and on the same page.

3. Get connected. It’s essential to verify information as it’s released, via newsletters, seminars, healthcare carriers, payroll vendors and consultants. These resources can help employers navigate the evolving healthcare landscape. Knowledge of changes will empower an organization to handle them effectively.

4. Evaluate partnerships. There’s no better time for employers to examine their current partners, from an insurance consultant or broker to the accounting firm and legal counsel. An employer’s insurance consultant should be a trusted adviser in working on budgeting and benchmarking the company plan, administering benefits, evaluating plan performance and reporting outcomes. Finding an insurance solution that meets a company’s business goals, as well as its employee’s needs, can be accomplished with a knowledgeable, experienced insurance partner.

Staying ahead of healthcare changes is essential for organizations to have a smooth transition to an updated healthcare plan. Strategic planning, communication among departments and establishing the right partnerships are key. Employers must be proactive in addressing healthcare changes so they are ready when the time comes.

DG Compliance

Why U.S. Health Care Costs Defy Common Sense

The article below was published on June 26, 2017 by CNN, written by Elisabeth Rosenthal.

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(CNN) – When Jeffrey Kivi’s rheumatologist changed affiliations from one hospital in New York City to another, less than 20 blocks uptown, the price his insurer paid for the outpatient infusion he got about every 6 weeks to control his arthritis jumped from $19,000 to over $100,000. Same drug; same dose — though, Kivi noted, the pricier infusion room had free cookies, Wi-Fi and bottled water.

Mary Chapman, diagnosed with multiple sclerosis, started taking a then-new drug called Avonex in 1998, which belongs to a class of drugs called disease-modifying therapies. Approved in 1996, Avonex was expensive, about $9,000 a year. Today, two decades later, it’s no longer the latest thing — but its annual price tag is over $62,000.

Marvina White’s minor elective outpatient surgery to remove an annoying cyst on her hand was scheduled in 2014 based on her doctor’s availability. Because it was booked in a small facility that is formally classified as a hospital (with two operating rooms and 16 “spacious private suites”) rather than the outpatient surgery center where the doctor also practiced, the operating room fee was $11,000 rather than $2,000.

Len Charlap had two echocardiograms — sonograms of the heart — within a year: One, for $1,714, involved extensive testing at a Harvard training hospital; the other, for $5,435, was a far briefer exam at a community hospital in New Jersey.

It is not just that US healthcare is expensive, with price tags often far higher than those in other developed countries. We know that. At this point, Americans face astronomical prices that quite simply defy the laws of economics and — as each of the above patients noted when they contacted me — of decency and common sense.

‘The balance sheet just doesn’t work out’

“It’s the prices, stupid.”

This phrase, part of the title of a 2003 scholarly article in the journal Health Affairs explaining high US health expenditures, has been bandied about by a number of health economists for years.
But politicians have long been prone to ignore this essential wisdom. They do so today at their own peril. Outraged Americans at Town Hall meetings are wising up. Like patients who I’ve spoken to in my last few years of reporting, they have experienced the bankrupting and baffling illogic of US medical prices firsthand.

With the prices the US medical system demands for care, it’s no wonder that Republicans have had so much trouble finding a recipe to replace the Affordable Care Act, aka Obamacare, with “something better” for less money, as they’ve promised endlessly to do. Ironically, despite the extreme differences, the GOP is stumbling on the same underlying problem that ultimately tarnished the ACA in critics’ eyes: spiraling prices often necessitated skyrocketing premiums and deductibles, belying the “affordable” moniker. The balance sheet just doesn’t work out.

Any plan to solve America’s health care mess must confront this reality: Our prices for tests, drugs, hospitalizations and procedures — old or new — have gone up dramatically year by year, and are vastly higher than in other developed countries. Indeed, prices for similar interventions in other countries have often declined.

Why? The United States — more or less alone among developed countries — has no direct mechanism to rationalize prices for medical encounters, to insure they are at least nominally related to value. Worse still, we alone effectively allow businesses — mostly for-profit — to set the asking price. And, as these examples show, price and value have in many cases become completely uncoupled, allowing price to travel into the stratosphere.

The perils of ‘sticky pricing’

According to the rules of economics, the prices of innovative, breakthrough medical offerings should go down as they become more common. Competition should reduce prices as more manufacturers enter the field allowing purchaser-prescribers to choose from alternatives.
The pricing of pharmaceuticals and treatments in the United States often does exactly the opposite. Continue reading

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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Image Source: benefitnews.com

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.

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