hand holding a lightbulb with coins inside surrounded by graphs and charts for cost containment

As a benefits advisor, your clients look to you for help making benefits decisions that support better employee health. But with employer healthcare costs projected to increase by 6.5% this year, there’s no better time than now to look at ways to do so while saving your clients money. Let’s look at the top six healthcare cost containment strategies you should consider for your clients.

1. Optimize funding.

We recently posted a blog about the value of self-funding when it comes to healthcare cost containment. Self-funding means that the employer essentially manages its own health plan, assuming all financial risk and responsibility. In fact, more than half of workers in the US are already covered by a self-funded health plan.

Why does this save money?

First, instead of paying premiums to a carrier, it pays claims as they come in. If the money reserved for claims is in an interest-bearing account, then there would be additional cash flow.

Second, there are some tax advantages to self-funding that fully funded employers don’t see.

Third, self-funded employers typically have lower administration costs and overhead. This isn’t a full list, so be sure to check out our other blog post for greater detail.

2. Educate employees on their benefits.

Many of us have just completed open enrollment. This was the time we talked to employees about the benefits they have, how to use them, and where to ask questions. For most employees, it can be a pretty overwhelming time. Between the stress of choosing “the right plan” and the pressure of understanding what’s available, it’s safe to say a lot of information gets lost in translation. This can lead to low or uninformed benefits utilization. According to the International Foundation of Employee Benefit Plans (IFEBP) Benefits Communication Survey Results, fewer than 20% of employers say their employees have a high level of understanding.

While educating employees on their benefits during open enrollment is important, your job doesn’t stop there. It’s important to educate and communicate with employees about their health benefits throughout the year.

And it’s not just educating them on what benefits they have. You must also communicate how to use them sensibly, including for example, when to go to the ER versus urgent care or how to get a referral to a specialist. If an employee doesn’t understand what’s being offered, they’re likely to either not use their benefits at all or not use them wisely. That could result in both them and their employer spending money unnecessarily.

3. Advocate for better price transparency.

Benefits advisors are in a great position to advocate for their clients on a grander scale. This includes pushing for better price transparency.

How does better price transparency improve cost containment? When prices are made clearer, then the value of each provider can be scrutinized. For example, you could ask, “Why does Hospital A charge $150,000 for a procedure that is $100,000 at Hospital B right down the road?” You can look at the quality of care and determine if Hospital A has better quality care or if Hospital B has better quality, and therefore, higher value care.

According to the Robert Wood Johnson Foundation, 82% of people who’ve compared healthcare prices say they will do it again. Price transparency enables employees to make informed decisions about their healthcare. They can “shop around” for the best care, clearly determining how much they will pay out of pocket.

While there’s been recent legislation surrounding price transparency, we still have a long way to go to ensure the kind of transparency employees need and deserve. As a benefits advisor, you should push for insurance carriers to be transparent with costs whenever possible.

4. Implement care advocacy.

Another cost containment strategy that’s getting a lot of attention these days is care advocacy. In a nutshell, care advocacy empowers employees to make smart decisions about their healthcare with support and direction from experts. It saves both employees and their employers money in several ways:

Lower inpatient and outpatient costs
When employees talk with a Nurse Advocate first, they’re always steered toward the most clinically (and financially) appropriate care. This often means they end up utilizing a lower level of care than what they thought they needed.

Or maybe they were going to see a provider for one issue when the root cause of the problem is something else. For example, an employee may call a Nurse Advocate requesting help finding a provider for low back pain. However, after talking with the employee, she determines that the employee may have another medical condition that requires a gynecologist. The employee saves time and money by seeing the right provider at the right time.

Lower prescription drug costs
Every year, prescription drug costs go up, generally faster than most medical commodities or services. Care advocacy helps control drug costs by maximizing an employee’s drug plan, including reviewing medications for duplicate therapies, looking for generic alternatives, and locating financial assistance resources. This helps to reduce waste and ensures that employees (and their employers) are getting the most value for the money spent.

Avoid out-of-network claims
A lot of people think that to get the best care, they must go out of their provider network. However, in most cases, that’s not true. With care advocacy, Nurse Advocates identify and guide employees toward high-quality, in-network providers. This helps employees and employers avoid over-the-top, out-of-network claims.

For some of your clients, it could seem counterintuitive to talk about paying for care advocacy when they’re trying to contain costs. But think about this…the money saved from smarter benefits utilization and happier employees outweighs the cost of the program. In fact, at SentryHealth, we’ve reduced costs by up to 30% per member for many employers in just the first year!

5. Offer virtual care services.

Virtual care offers healthcare for employees that goes beyond a doctor’s office. It typically includes lifestyle and wellbeing coaching, chronic condition support, and mental health services. It can also include telemedicine services.

Virtual care is a fantastic cost containment strategy for several reasons. When offering this type of healthcare, employees have an opportunity to make healthy living a part of their daily lives. It removes barriers to care so employees can get the help they need, when they need it, without having to worry about getting to an office.

By addressing issues before they become larger, more expensive problems, virtual care ensures that everyone experiences better health outcomes and cost savings. Here at SentryHealth, our virtual care has resulted in up to a 13% reduction in claims costs and a 13% decrease in outpatient visits.

6. Measure outcomes, utilization, and costs.

“You can’t improve what you don’t measure. And if you can’t measure, you can’t improve.”

Good decisions aren’t made on a hunch or by relying on what’s always been done in the past. There needs to be data to back them up. Smart benefits advisors take advantage of a myriad of data to better guide their clients and measure the success of their benefits packages. In the case of healthcare, two of the most important data points to consider are outcomes and costs.

When you measure outcomes, you’re looking at whether or not the benefits your clients are providing their employees are meeting their needs and are helping them be healthier. As far as costs go, it’s simple. Are you saving your clients and their employees money?

Here are some ways you can better understand outcomes, utilization, and costs:

  • Compare spending and outcomes among similar clients. Are they spending about the same for the same benefits? Do your clients with better outcomes offer something different to their employees?
  • Look at what services employees use (and how much). Perhaps there are a lot of employees using the ER. Maybe they aren’t getting preventive care. These factors could definitely affect outcomes and costs.
  • Consider things like absenteeism, presenteeism, and turnover. Typically, employees who aren’t healthy or happy don’t show up to work or aren’t productive.
  • Take a close look at prescription drug claims. Are your clients spending a lot of money on certain drugs? Are there generic alternatives that aren’t being used?

Overall, it’s important to look at each client individually. Tracking, measuring, and monitoring data points like outcomes, utilization, and costs will only give you the insight you need to better serve and advocate for your clients.

We’d love to talk with you about how we can support your cost containment efforts for your clients. Our care navigation incorporates virtual care with care advocacy to offer a robust offering that improves outcomes while lowering expenses. Reach out to us to schedule a call today.

The SentryHealth difference.

SentryHealth is leading the charge in employee health and wellbeing. Integrating smart technology with personalized guidance from Registered Nurse Advocates, we empower employees to make more informed decisions while guiding them to quality, affordable care. The result is greater engagement, higher satisfaction, better outcomes, and lower costs.