Kathryn Moody
HRDive | August 18, 2016

Overall cost increases of healthcare benefits will hold steady at 6%, the National Business Group on Health announced—but increases that are held in place are, alas, still increases. Sustainability of healthcare may be under threat, and if prices continue to rise at current rates, it could put serious pressure on healthcare affordability for employers, the CEO and President of the NBGH, Brian Marcotte, said.

Or, to put it simply: Sooner or later, something’s got to give.

The NBGH annual report provides employers an outlook on the direction the change may be going. For the first time since the report began, specialized pharmacy was considered the No. 1 cost driver for healthcare spend, reflecting a general industry focus on specialized healthcare issues overall. To tackle these problems, employers are reaching for new tools that serve their general populations and provide high-touch care to their employees with more specific and specialized healthcare problems.

HR Dive spoke with industry experts on to better understand what is going on and how employers are best solving these problems.

Cost pushers: Growing prescription spend, patient responsibility

Specialty prescriptions tend to be the very expensive drugs that cost $1,000 or more per dose, are challenging to dispense and have complex care management needs, Marcotte explained.

But employers may be asking: Why now? It’s not like specialty prescriptions are a completely new entity.

Ten years ago, many Americans were participating in more traditional healthcare plans with many co-pays, said Jeff Oldham, Vice President of Consumer Strategy at Benefitfocus, so when they purchased specialty drugs, the drugs seemed cheap. Now that consumer-directed healthcare plans (CDHPs) have grown in adoption, more employees are seeing the full-cost of such drugs.

“When people didn’t previously need to be engaged, they didn’t ask the right questions,” he said. “Now they are far more interested in understanding the price of drugs.”

In turn, more employers are trying to manage the high costs as well as employee needs by creating specialty pharmacies, creating certain specialty tiers in pharmacy plans and generally paying more attention to employees who require such services, the NBGH report said. In particular, there is renewed focus on paying attention to where employees go for treatment, and potentially pushing employees to cheaper high-quality locations instead (a stand-alone clinic versus a hospital, for example).

Plan design “is not the silver bullet,” Oldham said. It’s the same old problem of the new healthcare age: Employees have to be willing to change their behaviors, too. Often, money is the only way to encourage that change, which is one reason why CDHP adoption may have spurred employers to take a second look at their pharmacy programs.

Growth of specialized wellness and wellness tools

Employers are increasingly focusing on “high touch” care management programs. For example, opioid restriction and management has garnered more attention this year due to various reports on opioid abuses and concerns.

But in order to maintain such programs, employers are turning to third-party wellness management tech to ensure their success.

“I was in the wellness space almost 10 years ago, and employers were blindly throwing money away when they didn’t have a good understanding of core conditions that were impacting their healthcare spend,” Oldham said. Now, more employers are using wellness tools to understand the top five or 10 conditions that could be affecting employees.

One powerful tool that has emerged as more employers adopt wellness programs is the telephonic consult. Telehealth is “commonplace” now for most large employers, NBGH reports. By 2019, 97% of large employers are projected to have some form of telehealth in play. That rise is explained due to its cost-effectiveness. A $150 urgent care visit can be reduced to a $40 teleconsult, Marcotte noted, especially if an employee has a simple care need, like a cold or sinus infection.

Telehealth has also seen use in mental and behavioral benefit spaces, alongside the usual suspects of EAPs and self-help electronic resources, the NBGH report adds.

But the biggest trend that Oldham noticed is that more and more companies are putting effort into owning wellness data — literally. For a long time, most employers depended on insurance carriers to provide wellness data (BMIs, biometric screenings) and programming. Now, more employers are conducting research and analysis, and are “far better” at understanding their data, Oldham said — which means more focus on specialized forms of care.

“I think employers right now, when it comes to wellness, they have far more questions,” he added. That’s a good thing. It means that more wellness programs actually bring about outcomes.

Drilling down: The rise of concierge services and consumer choice tools

As always, wellness and healthcare programs struggle with engagement, Marcotte said. In turn, many of the new wellness technologies focus on grabbing employee attention and integrating all of an employer’s offerings. Consumer choice tools are a common example of this.

Another set of tools growing in popularity: concierge services. These tools are being used to address either specialty conditions or more broad health concerns, Marcotte said. Typically, concierge services provide employers with one phone number or access point that employees can use to gain information about their benefits and, in many cases, set up appointments. Trained nurses usually respond to the calls, and can assist in managing an employee’s case.

Oldham was optimistic about such tools as well. He praised their “bedside manner-type approach” and the way such programs actually lean away from automation. A real nurse often does the research and work to connect employees to what they need.

“It’s not inexpensive,” he said, “but if I am a large employer, there are intense productivity gains.” Especially if an employee doesn’t have to search for a specialist while on the clock.

Health Advocate is one company that provides a concierge-like service. Their specialists are trained to ascertain the “hidden questions” — issues employees may have but won’t ask about outright at first. Such programs seem to be particularly effective for those with untreated mental health issues, especially in contrast to the typical EAP.

“EAPs dig their own hole,” Bert Alicea, vice president, EAP+Work/Life Services at Health Advocate, told HR Dive in June. Their focus on utilization does them in, he notes, and is part of the reason why such programs come with considerable stigma and engagement issues.

Instead, Health Advocate and other concierge services present themselves as a “resource” for employees, a way for an employee to overcome a “temporary set-back” no matter what is going on in their current life.

“The one model of wellness, advocacy and onestop shopping, it can help get behind the many issues employees have,” Alicea said. “And many of those are medical issues.”

Marcia Otto
Institute for HealthCare Consumerism | August 18, 2016

The adoption of consumer-driven, high-deductible health plans continues to surge. According to a survey from Aon Hewitt, 64 percent of employers reported offering consumer-driven health plans in 2015, but another 23 percent note they intend to add them in the future. As employees take on more responsibility for managing the costs of their health care, a plethora of pricing transparency tools and similar resources have emerged to help them identify cost-effective, high-quality care. When effective, pricing transparency offers a number of benefits for both employers and individuals. By helping people make more informed decisions about their care, it reduces overall health care costs and cuts waste while connecting patients with quality care.

However, despite the availability of these tools, utilization is lacking. A recent study published in the Journal of the American Medical Association found that only about 10 percent of employees with access to transparency tools had used them. Another survey from the Kaiser Family Foundation indicated that less than nine percent of people had used price information when making a health care decision. Consumers have access to pricing transparency tools, but very few are actually using them to make cost-effective decisions about their health care.

Why aren’t more consumers using these resources? Many people may not be aware they have access to a tool. According to a 2016 study from America’s Health Insurance Plans (AHIP), 58 percent of health plans report that members lack awareness of these resources. Further, even if they know about the tools, many people may underestimate the need or how they can help. Research from Public Agenda found that 57 percent of insured Americans do not think there is a cost difference among in-network doctors for the same services, which is not the current reality. Finally, many early versions of pricing transparency tools were often difficult to interpret or understand, however they have since improved drastically.

Improving Engagement in Transparency

There are a number of steps organizations can take to improve engagement in these tools and realize the potential benefits – improved outcomes and reduced costs.

Educate, Educate, Educate. Comprehensive communication efforts can dispel any misconceptions about the need for pricing transparency and promote this service as the place to go for health care help. A 2014 Cicero Group survey of consumers found that 49 percent say better communication would drive usage of these tools. Further, making it easy to find can have an impact – integrating it into the employee portal can improve both awareness and accessibility.

Offer Incentives. Incentives have been shows to drive engagement in wellness, and they can be an effective means to do the same for pricing transparency. According to the same consumer survey, more than 40 percent of respondents said reductions in their premium costs would encourage utilization of pricing transparency tools.

Provide Multiple Platforms. Today’s workforce spans multiple generations, so a one-size-fits-all tool will not work for everyone. While an app or website tool is a necessary component, offering telephonic support can make a big difference and help employees take the next step to access care.

Display Cost and Quality Side by Side. Cost alone does not tell the whole story. In the absence of credible information about quality presented simultaneously with cost details, many patients may assume higher prices mean higher value, which is not always the case.

Make Tool User-Friendly. The Cicero Group survey found that 33 percent of consumers thought pricing transparency tools were complicated. Consumers are more likely to use a tool that is intuitive and easy to use.

Incorporate Personalized Information. In order for users to make the most informed decision, tools should include company and employee-specific data to improve accuracy and relevancy. This includes breaking out the details of all related costs, including the full price of services as well as the consumer’s out-of-pocket responsibility.

Exceed Expectations. The most effective tools are engaging and provide users with more than they were looking for, such as connecting them with resources to help them take the next step after reviewing cost and quality information.

What’s Next for Pricing Transparency?

Pricing transparency tools continue to evolve and improve to meet the needs of health care consumers. However, in order to improve utilization, transparency needs to be coupled with other features and innovations in health plan benefit design that incentivize consumers to shop around for their health care.

The majority of people currently using these tools search for procedures that typically cost more than their deductible. If there will be no impact on their cost responsibility, consumers may lack the incentive to seek out a better value. Pricing transparency needs to be integrated into health plan benefit design in order to prompt people to select less expensive providers or facilities. This can be done by tailoring plans to favor coinsurance versus flat co-pays to increase motivation to shop around. Reference-based pricing, which sets maximum reimbursement limits for common procedures, can also encourage employees to compare costs to ensure they are within the approved range and do not have to pay excess charges on their own.

Health care pricing transparency helps consumers make high-value, cost-effective decisions that can lower health care spending. However, in order for it to be effective, insurers, employers and others must take steps to motivate engagement and utilization. A standalone tool may not be enough to motivate consumers to utilize the resource; however, when combined with these strategies, pricing transparency tools have the potential to increase ongoing utilization and engagement.