This post was originally published in September 2019. It was updated in April 2021
Employer healthcare costs climb every year. For individuals, the stakes are perhaps even higher. Consider that medical bills drive half of all debt in the U.S., and that prescription drug costs increased 33% between 2014 and 2020, far more than for any other good or service.
With so much of the cost of healthcare in the hands of employees, developing a cost-containment strategy is a moving target. Yet we know it’s one of the tactics on which employers rely to drive down plan costs and improve the employee experience. No matter what strategies you and your broker are pondering, you’ve probably noticed: cost-containment ideas don’t necessarily translate to savings.
In this post, we’ll review most standard healthcare cost-containment techniques used by HR teams. We’ll also explore how HealthJoy’s benefits experience platform can accelerate your strategy and push you from the idea phase to one where you, and your employees, realize real savings.
Given a choice between two gas stations, can you imagine filling up at the more expensive one? We can’t, either. Employees would love to choose the most inexpensive option for their MRI, primary care visit, or annual physical. Unfortunately, medical procedure pricing isn’t as easy to compare as fuel. Even employees who want to find an inexpensive option might give up when they hit a confusing website or health plan dead-end. That can mean a higher copay for them and increased costs for your company.
Price transparency is key to making cost containment a reality. And we know that matters to you: According to our 2020 State of the Benefits Experience Survey, nearly 60% of employers said “creating better healthcare consumers” was their top cost-containment strategy.
We make it easier to achieve this goal with simple, clear, year-round member communications that emphasize transparent pricing. Say an individual member needs to find an inexpensive MRI in their city. Our live concierges will research the highest quality providers, identify a fair price in their area, then send members a breakdown of the cost at various providers.
Our year-round member communications encourage employees to take advantage of provider or procedure search whenever they need to seek care. These communications help them understand that finding a fair-priced provider isn’t just a matter of taking their doctor’s recommendation, but it doesn’t have to be complicated, either.
Health care costs will never be as transparent as pricing at the corner gas station. With HealthJoy on hand, employees can easily find the care they need at the right price and learn a thing or two about price transparency along the way. That’s how we finally create better healthcare consumers, together.
We know that encouraging employees to shop for healthcare is an excellent cost-containment strategy — but it can require employees to put in extra work. Onsite clinics let employers lower barriers to access and can allow an employee to leap the hurdle of searching for care altogether.
These all-in-one wellness centers typically offer a lower price for acute and primary care services and might also simplify access to weight- loss programs, mental health services, and condition management. They keep preventive medicine top-of-mind for employees, making it easier to stay healthy, manage their chronic illnesses more effectively, and save time.
The investment for an onsite clinic can pay off in increased productivity and lower rates of absenteeism. A 2015 survey by the National Association of Worksite Health Centers polled 255 employers with onsite clinics and found that 64% reported a reduction in medical care costs. Despite the pandemic, 61% of employers planned to keep or implement on-site clinic programs in the years ahead, according to The Business Group on Health.
HealthJoy works alongside your onsite clinic to increase utilization. Our benefits wallet integrates with clinic benefits to remind users of this option every time they open the app. Year-round education from our virtual assistant JOY works even harder to keep your clinic top-of-mind. We can also send results from a HealthJoy telemedicine consultation to an onsite clinic for a seamless follow-up experience.
Telemedicine saw a resurgence during the pandemic. In our January pulse survey, 75% of employees said they never used telemedicine prior to COVID-19, but more than one-third (35%) of those same respondents report they have used it since. Overall, 59% of the employees we surveyed said at least one person in their household had used telemedicine since the start of COVID-19.
That’s great news for cost containment, because like onsite clinics, virtual healthcare solutions allow employees to avoid expensive claims, spend fewer hours at the doctor, and sidestep unnecessary spending.
A 2015 study from the American Journal of Managed Care estimated that it takes 121 minutes, inclusive of travel time and visit time, each time someone seeks care. If you consider that Americans, on average, earn around $30 per hour in 2021, that can mean a productivity savings of $60 or more per telemedicine visit.
HealthJoy’s telemedicine solution can usually facilitate a screen-to-screen meeting with a medical professional for our members in less than 30 minutes.
Most basic telemedicine vendors can help clients achieve a break-even ROI, but with higher utilization, you might see savings of 10-20x more. Our live concierges redirect members to telemedicine when appropriate, and communications from our virtual assistant, JOY, ensure they’re aware of their benefit.
With higher telemedicine utilization, HealthJoy allows you to add the ease of automation to your cost-containment efforts.
As our population ages and chronic illness rates increase, case-management services offer a way to bridge gaps in care. Case managers help patients navigate the healthcare system and get the care they need to be comfortable. When that navigation includes finding lower-cost medications, avoiding unnecessary procedures, and managing symptoms, it can also spell plan savings for employers.
Though case-management services might require an investment, they can also yield significant savings —especially when you consider that impaired performance from chronic illness costs employers an estimated $198 billion per year. Cancer, HIV, and cardiovascular disease, conditions that are commonly addressed by case-management services, are expected to continue as leading drivers of employer healthcare costs in the years to come.
Self-funded clients can benefit from HealthJoy TPA+, an elevated HealthJoy service level that enhances proactive outreach capabilities through seamless integration with your TPA. We help increase case management utilization through communications from JOY and our concierge team, reminding members through the app that support is only a call away.
Untreated mental health conditions are a huge driver of healthcare costs. For one thing, employees struggling with mental and emotional stress tend to miss work. When they are present, they’re distracted and less productive. One report estimates that depression and anxiety cause a loss of $1 trillion in productivity per year. That number doesn’t factor in employees experiencing marital stress, family issues, addiction, or grief.
Employee Assistance Programs, or EAPs, offer cost-effective solutions to help workers proactively tackle life’s stressors. Resources are typically limited in scope, but in many cases can be just as effective as long-term or broader solutions.
A short-term counseling EAP solution, for example, might offer employees six targeted counseling sessions to help them cope after a divorce. Short-term counseling can improve presenteeism, absenteeism, and productivity markedly over a short period.
The ROI on an EAP depends on utilization. Since we know that employees often don’t use their EAPs, generating awareness and centralizing the benefits experience is essential. HealthJoy makes this process simple, with communications that keep employees engaged and educated about their benefits year-round.
Reference-based pricing (RBP) is slowly growing in popularity as a way to manage healthcare costs. But without proper education, it can create financial stress and confusion for employees, not to mention considerable headaches for HR.
In RBP, the employer sets a maximum amount they will reimburse for certain medical services. Whereas traditional network agreements rely on a discount off billed charges, RBP reprices claims based on fair market pricing (usually Medicare plus an additional profit margin).
Implementing an RBP strategy can be tricky. Even when guided to appropriate providers, employees can end up with a bill for the amount between the reimbursement maximum and the provider’s charge. This practice is known as “balance billing.” The financial stress of several thousands of dollars of unpaid medical bills can impact productivity as well as the employees’ perception of their benefits and the company as a whole.
HealthJoy makes this cost-containment strategy simpler. From the moment an employee logs into the HealthJoy app, our virtual assistant, JOY, helps them make sense of the cost-sharing related to reference-based pricing. If employees have questions beyond what JOY can handle, one of our healthcare concierge team members joins the chat to explain more complex concepts.
HealthJoy stays top-of-mind with both a physical and digital presence, reducing the risk of unnecessary spending and surprise medical bills and helping ensure RBP works for employers and employees.
Accelerate your cost-containment strategies for HR
Whether your goal is to improve employee health outcomes, address cost-containment, or give employees more of the benefits they want, you’ll want to consider costs. But tossing out ideas and successfully implementing a cost-containment strategy are two very different things.
Luckily, with a simple, smart platform on your side, cost containment can be straightforward for employees. It may even be possible to bring them along for the ride, effectively creating better healthcare consumers while helping them live healthier, happier lives.