A competitive talent market and a turbulent economic situation have employers looking for ways to contain healthcare costs.
In April, survey data published by Willis Towers Watson showed 64% of employers said they planned to increase their efforts to address healthcare affordability over the next two years. And last month, a report by insurer NFP found that 62% of employers were either “very” or “extremely” willing to implement cost containment solutions.
At the same time, many employers are wary about relying on strategies that disrupt the experience of health plan participants; NFP found that 74% of employers said minimizing disruption to plan members was either “very” or “extremely” important in their consideration of cost containment strategies.
This drive to minimize disruption has led organizations to seek solutions that deliver a “return on value,” a metric that goes beyond the traditional return on investment more commonly employed in benefits parlance, according to Heidi Cottle, senior vice president and head of cost containment strategies at NFP.
In an interview with HR Dive, Cottle demonstrated the concept through the example of care navigation services, which employ a concierge-like approach to helping employees find providers. Care navigation may provide a traditional return on investment — because a primary care physician visit is generally less expensive than a visit to an urgent care facility or emergency room — but it also provides value because it can be highly customized to the needs of a particular employee.
“The return on value is that we can still quantify that there’s a cost associated with care navigation, but we can also quantify it in that if a member needs to get some more primary care support, are they getting to a primary care provider rather than an urgent care center?” Cottle said. Primary care access is a particularly notable example given that, in a recent Commonwealth Fund study of healthcare systems in high-income countries, U.S. adults were the least likely cohort to have a relationship with a primary care provider for five years or more.
But there are other places where cost containment and value meet, Cottle noted. Virtual care is another emerging example. NFP’s survey found that more than half of employer respondents had introduced virtual solutions in mental health and primary care. While 29% said better care for employees was their main driver for considering care alternatives like virtual care, 36% said better care and cost containment were equally important considerations.
Then there is value-based care, a phrase whose usage long predates the pandemic, but that is nonetheless a way to address both the high costs of certain care procedures and the benefits patients derive from those procedures, Cottle said.
She gave the example of an employer that directly contracts with an outpatient surgical facility. Procedures like arthroscopic knee surgeries tend to be more expensive in an inpatient setting than in an outpatient one, Cottle said, so employers can incentivize employees to take the less costly route by, for instance, offering to waive patients’ deductibles if they choose an outpatient provider.
Value-based care arrangements also may seek to hold care providers accountable for their pricing structures through tactics like price bundling. But that bundled price also might include a guarantee that, if the patient is hospitalized within a certain time frame after the surgery for complications arising from the surgery, the surgeon who performed the procedure will pay for that hospitalization, Cottle said.
It’s the same principle: cost-savings that provide value to the patient.
“It saves the employer money in the health plan,” Cottle said. “And especially with the cost differences between certain procedures, it really makes a difference to the member as well.”
However, implementation of such strategies is often a complicated process for HR teams. Resources may be thin, and it may take time to convince leadership to get on board. To do so, Cottle said employers may need to have an independent data analytics engine that can provide insight into the healthcare gaps their workers face.
Employers also may be able to demand more information from their plans, a conversation that has been made easier, Cottle said, due to the push for greater transparency at the federal level. The recently passed Consolidated Appropriations Act prohibited so-called “gag clauses” that prevent access to cost or quality of care information or data, among other information
Other tactics, such as pulse surveys, can further help employers identify plan members’ pain points, which can inform HR teams which issues are most likely to help retain key talent, Cottle said.