Companies that innovate to lower health costs save more than $2K per employee a year
- A sample of "best-performing companies" measured by Willis Towers Watson (WTW) saves more than $2,000 in annual healthcare costs per employee, according to a new report.
- Compared to less efficient, "high-cost" companies, WTW says "best-performing" firms excel in subsidization and plan design; seventy-seven percent of best performers offer account-based health plans (ABHPs) with health savings accounts (HSAs) compared to 63% of high-cost companies, and 45% of the former use ABHPs as a default option compared to 6% of the latter. Best performers also demonstrate the ability to align well-being programs with company culture (53% v. 16%), sponsor well-being campaigns (59% vs. 39%), and sponsor programs or pilots that target specific conditions or high-cost cases (51% vs. 33%).
- WTW defines "best-performing companies" as those that use multiple practices and strategies for containing healthcare costs. Although both best-performing and high-cost companies have strategies to manage pharmacy costs, high performers lead the effort, with 57% evaluating pharmacy benefit contract terms compared to 49% of high-cost companies. Also, 28% of best-performers promote the use of specialty generic drugs, when available, compared with only 18% of high-cost companies.
Most organizations are well aware of the need to innovate and outperform the competition in a healthcare benefits industry obsessed with costs — costs that could rise to their highest level in three years in 2018, according to Aon.
The causes are varied but healthcare observers' short list includes prescription drug prices (especially specialty pharmaceuticals) and the cost of complex medical procedure and treatments. Legislative solutions have been proposed, but Congressional leaders are essentially stagnant in the face of larger political disagreements, and there's more to fix than the Affordable Care Act.
In response, mega-corporations including Apple, Amazon, JPMorgan Chase & Co. and Berkshire Hathaway are looking to put their own coffers forward for the sake of innovation, floating onsite primary care clinics and perhaps establishing their own joint healthcare companies. All bets are off as to whether these efforts ultimately succeed, but many in benefits and HR are looking for innovation wherever it can be found.
Fortunately, there are less-expensive strategies for reining in healthcare expenses, as demonstrated by the "high performance" firms cited by WTW. Patient-care provider strategies like telemedicine have made inroads, as have consumer-oriented healthcare plan designs that allow employees to save money and expenses. A shift to healthcare pricing that is based on patient outcomes is oft discussed by insurers.
HR leaders shouldn't estimate the cultural aspect of health within their organizations, either. Creating a culture of well-being demonstrates to workers that their personal health is valued and prioritized, even on the job.
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