Top Strategies to Know for Reducing Healthcare Costs This Year
On Friday, January 25, 2019, Helios hosted the Human Capital Impact Forum (HCIF), a program where C-level and HR leaders come to learn, collaborate and adapt human capital programs to support business growth. The topic for this session was “Reducing Healthcare Costs, Strategies to Know for 2019 & Beyond.”
Below is a high-level recap of the big themes from HCIF, along with insights from our featured experts in the benefits space and HR leaders representing the employer market.
In Session One, Chris Mullins, CEO of UnitedHealthcare Mid-Atlantic, opened the program with a few astonishing stats:
- Approximately $1 trillion dollars is spent on medical waste and/or inefficient administrative processes.
- The US national health expenditure shows over 17% is spent on healthcare.
- By 2025, it is predicted that healthcare will cost $5.21 trillion dollars.
After hearing that, it's not surprising commercial payers or private employers that subsidize premiums are feeling the pinch the continuing rise in healthcare costs. Over 30% of employers changed medical providers two years ago and over 18% of employers changed last year.
He encouraged employers to find strategies to reduce costs and to increase consumer education. Changing physician and/or prescription co-pays can impact the overall healthcare cost, for instance.
Mullins also encouraged employers to educate and empower their employees to shop services as applicable. For example, if you need an MRI, you would be surprised to learn that the cost will vary greatly from provider to provider within the Washington, DC metropolitan area. In fact, there is a 370% difference when using one provider versus another provider within a five-mile radius.
Below are other notable tips I found to be useful from the presentation.
Top 6 Takeaways on Reducing Healthcare Costs from UnitedHealthcare
- Save Money on Medicine
- Ask your health care provider if you can switch to generic medicines. They have the same active ingredient but cost less than brand name drugs.
- Ask your provider if there is a less expensive medicine that treats the same condition.
- See if you can order your medicine through the mail.
- Take all of your medicines as directed. Not taking your medicine or not taking enough medicine may lead to further health problems.
- Use Your Benefits
- Get routine health screenings. Most of these tests are at no-cost and can catch health problems early- when they may be more easily treated.
- Some health plans offer health advocates or case managers. A health advocate can help you get the most of your benefits. A case manager can help you to manage complex health problems such as diabetes or asthma.
- Use free and discounted services. Many health plans offer discounts on things like gym memberships or eyewear.
- Plan Ahead and Know When to Use Urgent Vs. Emergency Care
- When an illness or injury occurs, you need to decide how serious it is and how soon to get medical care. This will help you choose whether to call your provider, go to an urgent care clinic, or get emergency care.
- If a person or unborn baby could die or have permanent harm, it is an emergency. Examples include chest pain, trouble breathing, or severe pain or bleeding.
- If you need care that cannot wait until the next day to see your provider, you need urgent care. Examples of urgent care include strep throat, bladder infection, or a dog bite.
- You will save both time and money if you use an urgent care center or see your provider rather than going to the emergency department. Plan ahead by knowing which urgent care center is near you.
- Ask About Outpatient Facilities
- If you need a procedure or surgery, ask your provider if you can have it done at an outpatient clinic. Often, getting care at a clinic is cheaper than having the same procedure in a hospital.
- Choose In-Network Health Care Providers
- Depending on your health coverage, you may have the choice to see providers who are in-network or out-of-network. You pay less to see providers who are in-network because they have a contract with your health plan. This means they charge lower rates.
- Choose a Health Plan That is Right for You
- When choosing a plan, think about the health needs of you and your family. If you pick a plan with higher premiums, more of your health costs will be covered. If you rarely need medical care, then you may want to choose a plan with a higher deductible. You will pay lower monthly premiums and likely save money overall.
With such an
3 Trends Advancing in Pharmacy
Next, Tim Sullivan, Pharmacy Manager of UnitedHealthcare, shared strategies and trends in the pharmaceutical space. The cost of prescription drugs has become a hot-button issue with consumers and policymakers. Approximately $4 million is spent on direct-to-consumer pharmaceutical advertising and has grown as the most prominent type of health communication.
What struck me, even more, was the data point he shared, "1 in 4 people taking prescription drugs report difficulty affording their medication. " Dr. Sullivan reported 2 out of 5 consumers abandon their prescribed RX plan of action. The good news is that savings opportunities actually do exist when choosing the right form of medication. For example, who would have thought that purchasing medication in a capsule may be less expensive than in a tablet form?
Top 3 Pharmaceutical Trend Advances Predicted
- Cellular and Gene Therapy: In the future, this technique may allow doctors to treat a disorder by inserting a gene into a patient’s cells instead of using drugs or surgery. Some gene therapies are available now, including Luxturna – for the treatment of blindness (only $425,000 per eye!) Hopefully, more affordable solutions will breakthrough soon.
- Artificial Intelligence: Using this advanced technology, consumers can be seen by doctors in the comfort of their own home.
- Wellness Programs: These programs are continuing to gain popularity, however, the first and most important step is to get the leadership engaged as well as establish a wellness committee.
Dr. Sullivan closed his piece by emphasizing the opioid epidemic. Studies show the average amount of days to feel relief from a prescribed opioid is three days. If the drug is prescribed for more than three days, the likelihood of addiction is far greater. I'll leave you with one final eye-opening stat on this topic: every 15 minutes, someone dies from opioid addiction.
Employer Healthcare Strategies Panel Highlights
In Session Two, we had a panel with industry leaders in Human Resources and Benefits to discuss real-time employer healthcare strategies. The panel, facilitated by Beth Robertson, Senior Vice President of NFP Mid-Atlantic included:
- Julia Moreno, Vice President, HR Operations at PenFed Credit Union
- Tom Cogan, Senior Vice President and Practice Lead for NFP Mid-Atlantic
- Lindsey Reisinger, Vice President at ECS Federal, LLC
Robertson stated in 2019, large employers will cover on average 70% of medical premiums. PPO medical plans remain the most popular plan at 73% and 40% of consumers will participate in an HSA, high-deductible plan. Panelists, Moreno and Reisinger both agreed there has been an increase of HSA participation in their respective companies.
Moreno shared a top cost-saving strategy they did at PedFed, which was to not offer medical to Medicare-eligible employees and carving out Rx from their healthcare plan. As a government contractor with 2,400 employees, ECS Federal decided to convert to self-funding last year after considering it for quite some time. Ultimately, Reisinger disclosed they saved about $1 million dollars as a result. ECS has Service Contract Act employees and was able to keep their SCA population fully insured.
Interested in Self-Funding? 5 Tips to Consider Before You Make the Jump
Cogan shared tips for employers considering converting to self-funding of employee health benefits:
- Employers would take responsibility for administrative tasks
- Self-funded plans are subject to independent audits
- Flexibility to carve out certain benefits
- Recommends stop-loss insurance to protect you from shock and high utilization claims
- Consider a fully insured transplant rider
Helios HR's Human Impact Capital Forum provides content, connections, and conversations that will be catalysts for change. We hope that you will join us for our next Human Capital Impact Forum on May 10, 2019 in Tysons, VA. Be sure to mark your calendar and be on the lookout to register and join us!