Every business leader likely knows that health care isn’t working for their bottom line or their workforce. And in the unlikely event that don’t already know it, they likely realize that it’s going to stop working – and possibly soon. Using health care benefits as an affordable way to differentiate and gain the labor advantages needed to thrive and prosper are a thing of the past for many – especially companies with under 100 employees.

Brokers also know this and the days of the status quo are numbered. Fully insured plans are not going to continue working, especially not with premiums and out-of-pockets as high as they are today. However, if you’re close to retirement, or your clients are all big corporations or government entities with deep pockets, you might not be seeing these trends quite yet.

What about the rest of us? How can we think differently and strategically to stay relevant when prices are rising and employee participation is challenged? How can we help our clients’ employees afford to participate? If we bring something new to the table this next renewal season, maybe the renewal process won’t take as many hours and renewal will be more certain. There’s a reasonable argument that there isn’t much to lose, so the decision to change is becoming more obvious.

A new mindset, and four things to consider: 

  1. More health care first, less insurance last. We have become conditioned to think our clients are looking for health insurance, when really, it’s the access to affordable health care they’re after. The more affordable the benefits, the better. Getting the care their people need and paying for it at fair prices is important, but putting the insurance part of the equation last isn’t easy when we the insurance companies are in charge. Consider taking the lead and helping your clients take advantage of the newer, partially self-funded capabilities. Getting them under federal ERISA law and away from state’s insurance laws and their changing interpretations has big advantages when you learn how to guide your clients.
  1. Benefit design. A smart benefit design will always get more people better care, and with less costs. It will seem simple, with rules that apply 90% of the time:
    1. Network: the network will be bigger, not narrower. The everyday care people need 90% of the time will have less rules and less administration.
    2. Copays: get $0 copays for everyday care and this first dollar coverage will even help get work comp EMOD factors to minimum levels quickly.
    3. Prescriptions benefits: reward people for using generic Rx dispensed from grocery store pharmacies, as the big brands on the corners will cost plans many times more.
    4. Pre-authorization: for the less frequent but more expensive care, make sure the appropriate pre-authorizations are in place. This will prevent much of the bouncing around and ping-ponging through the system from ever starting. Reward people for slowing down the expensive decisions when medically appropriate; pre-determined pricing can take the delivery of a baby from $30,000 down to $5,000. What a thoughtful benefit design can help do for affordability adds up fast, and in turn leads to increased participation.
  1. Limited health reimbursement arrangements (HRAs). As insurance costs rise, it will become increasingly necessary to limit some of the very expensive but infrequent services from a plan – at least if the employer’s goal is to create affordability and participation of more employees and family members. HRAs with appropriate limits are good ways to supplement ERISA partially self-funded plans in which limits are not possible. Consider excluding a service from ERISA plans and then supplementing it with a limited HRA.
  1. No mark-up Rx. The number of tricks and schemes that even “transparent” pharmacy benefit managers (PBM) can play are numerous. Let’s stop pretending we or our clients can be smarter than the PBMs. Keep it simple – get all rebates back to your clients, and make sure the only revenue contractually allowed for the PBMs are defined transaction fees – transparency is key. Penalties for doing otherwise are something honest PBMs don’t mind.
  1. Virtual-first direct primary care. We’ve all heard of the theoretical advantages of direct primary care (DPC). It’s a great concept, but it’s not always practical to get a consistent experience while providing nationwide care in a meaningfully standardized way. What about going “virtual-first” (not virtual-only or virtual-instead)? Especially in the era of COVID, almost everyone is used to most things being “virtual-first.” Why not DPC that expertly interfaces with the local physician and hospital infrastructure? Health plans that use medically licensed virtual-first DPC to perform population health and care navigation services will get in front of many big and little costs before they ever happen. Controlling costs before they happen, or before the bill is created, is a good way to limit the amount of referenced based pricing (RBP) that needs to be done after the fact.

Of course, there are more things savvy and thoughtful brokers are doing today, and it’s the integrated execution of these things that makes a health plan work or not work. No one likes a fragmented system that feels clunky. I always enjoy hearing your ideas. Let’s continue to share our success stories (and even our horror stories can be helpful).

Dr. David Berg is president and co-founder of Redirect Health.

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