Peter Freska, CEBS
Benefits Advisor
The LBL Group, A UBA Partner Firm
.jpg)
I am constantly amazed when I hear that large employers (those with 100-plus employees, and especially those with 1,000-plus) do not know how they are going to handle health care reform yet. I recently read a post asking for information on how large employers are reacting to Health Care Reform. The responses to this post were very typical: adjust plans, reduce networks, change contributions and add additional cost controls like disease management, value based benefits or telemedicine. Or, what about charging for having a spouse with other plan options to come onto your employer based plan? Do these really help? Even having a spouse eligible for a plan presents a twist. Recall that under Health Care Reform, the definition of eligible dependents does not include a spouse. There is a reason for this: If a spouse is eligible then they cannot receive exchange subsidies.
So, what is an employer to do? Well, if they are a large employer – specifically a self-funded employer – they need to manage their plan; by this I mean the plan data. To do this a company must identify the real problems, and then apply real solutions. The key is to define near term cost-drivers. This is the crystal ball prediction that allows a plan to make the right changes at the right time. The typical model of census data along with medical and Rx has inadequate predictive power. Other data must be included to drive the predictability and manage near-term costs risk.
Why are employer based plans receiving double digit trends? The answers are simple: 1. Unknown cost drivers, and 2. Applying the wrong solution. In order to make a difference a plan must uncover the right issues and implement the right solutions. If employers are to make a difference, or if the Board of Directors or trustees of the plans are to really understand why their plans cost continue to rise, they must think about health care the same way they think of other parts of their business. Does the typical large business have an understanding of those who consume their products? They had better! Why should health care be different? Employers spend millions of dollars each year to take care of employees and their families.
Keep this in mind: With the full implementation of health care reform upon us, private health insurance will continue to bear the costs in the health care system. The cost control answer for businesses is not with the typical clinical analytics, but with business intelligence analytics. This type of process will help large employers reduce claims cost and flatten their health care costs over the next three years.
