Breaking the Cycle: How to Control Your Health Benefit Costs Without Sacrificing Care

Are you a business owner or executive who has grown accustomed to budgeting for a 5-10% increase in your health benefit costs every year? If so, you’re not alone—but that doesn't mean you have to accept it as the status quo. Health benefit costs are typically the 2nd or 3rd largest expense in your operating budget, right behind payroll and facility costs. Let that sink in for a moment… I'll wait.

 With this in mind, it's clear that company-sponsored health benefits present a tremendous opportunity to save—without impacting the quality of care your employees receive or the doctors they visit. That's right: you can make impactful cost-saving changes without disrupting your employees' experience. Some of these simple changes are low hanging fruit saving 10s to 100s of thousands of dollars, and if you're current benefits partner isn't discussing this with you, maybe it's time to explore change. Complacency is one of the biggest reasons businesses make a change to their benefits consultant, but you don't have to accept you can innovate.

 The Power of Innovation in Health Benefits

 The good news is that innovation in the health benefit space is alive and well, and it’s not limited to the big players like Aetna, BCBS, Cigna, or United. There are a variety of alternative solutions and strategies that can help you gain control over rising costs while still offering competitive, comprehensive benefits. Here are some options worth considering:

 1. Self-Funding and Level-Funding Options

Many employers are moving towards self-funded or level-funded plans, which allow more flexibility in how your benefits are structured and paid for. These plans provide greater transparency in costs and allow you to benefit directly from good claims experience. If your company has a healthy workforce, these models can lead to significant savings.

2. Direct Primary Care (DPC)

Direct Primary Care is a membership-based model where employers pay a flat monthly fee for employees to access primary care services. This model encourages preventive care, reduces the need for costly emergency room visits, and enhances the overall health of your workforce. Plus, it can be more affordable than traditional insurance for both employers and employees.

3. Reference-Based Pricing (RBP)

Reference-Based Pricing is an alternative model where providers are paid a set amount based on a reference point, typically a percentage of what Medicare would pay. This approach can lead to substantial cost reductions compared to traditional PPO networks, without sacrificing access to quality care.

4. Pharmacy Benefit Management (PBM) Optimization

Pharmacy costs are a significant component of health benefit expenses. By optimizing your Pharmacy Benefit Management (PBM) strategy—whether through carving out your pharmacy plan, using transparent PBMs, or leveraging group purchasing organizations (GPOs)—you can lower drug costs without compromising on coverage.

5. Health Savings Accounts (HSAs) and High-Deductible Health Plans (HDHPs)

Pairing High-Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) empowers employees to take charge of their health care spending. These plans often come with lower premiums, and the HSA funds can be used tax-free for a wide range of medical expenses, providing both savings and flexibility.

6. Telemedicine and Virtual Care

Telemedicine has surged in popularity, offering a cost-effective and convenient alternative to in-person doctor visits. By integrating telemedicine services into your health benefits plan, you can reduce costs associated with routine care and specialist consultations, while also enhancing employee satisfaction and access to care.

 Take the Next Step

 As a business leader, you don't have to be at the mercy of rising health benefit costs. By exploring these innovative options, you can regain control of your budget while still providing high-quality care to your employees and their families. The time for change is now. Reach out to learn more, and schedule a consultation to discover how these solutions can be tailored to your organization’s unique needs.