Avoid Cost-Saving Approaches that Lead to Higher Employee Costs
COVID-19 has put a lot of financial stress on many companies; however, a word of caution — as you look to find benefit savings as a result of the pandemic, avoid doing it on the backs of employees, if possible. Let me explain.
In January, I wrote a blog challenging our industry to make 2020 the year we stop playing it safe. At that point in time, the economy was humming along, which made it easier to accept the status quo in healthcare (despite the fact that costs continued to outpace inflation by a large margin, while outcomes generally missed expectations).
Little did I know, though, that less than two months later, we would be faced with such unprecedented challenges in healthcare and our economy, forcing us to quickly adapt and make difficult decisions like no other time in our lives.
We hear a lot of industry leaders and government officials talk about the uninsured rate, which is undoubtedly going to increase during these difficult economic times. That is certainly a significant concern I’m hopeful will be addressed in both the near-term and long-term.
With that said, let’s also be sure we focus on the underinsured, which we play a part in controlling. We already faced a significant problem in this area. High deductible health plans (HDHPs) and increasing costs have left tens of millions of the insured population in a position where they cannot afford to fully use their medical benefits.
This underinsured problem can lead to many issues, including avoiding necessary care that ultimately leads to longer-term problems and catastrophic claims.
In other instances, I see situations where members avoid care one year and then seek all their care (some of which can be unnecessary) the following year when they’ve hit their out-of-pocket maximum.
Here’s my challenge to the industry now — as you need to find ways to drive savings, don’t take the easy way out and do it at the expense of your employees. If there has been any good that has come from COVID-19, it’s been that:
- healthcare consumers have been forced to adapt and embrace new forms high value care, such as virtual visits.
- healthcare systems have also faced significant challenges and been forced to adapt as elective procedures and discretionary care have come to a screeching halt.
We need to get them ramped back up and get their employees back to work, but I’m hopeful that many providers will step up, learn, and proactively look for ways to operate more efficiently moving forward to help us get a better handle on costs.
While we could never have predicted a pandemic like COVID-19, Holmes Murphy has been preparing for an economic downturn where employers would look to us to help them drive meaningful savings. Many times, we can help immediately with employee benefits consulting:
- going through contract reviews
- negotiating best-in-class terms and conditions
- planning not only for your next renewal, but for the next 2-3 years where we can help deploy leading edge ideas and solutions
There are better ways to design plans, supplemented with high-value services and provider networks to maximize employee benefits spend. Just ask us!
In the end, we just want to make sure you’re protected. Again, please don’t hesitate to reach out to us to ensure you have what you need should you be impacted. We also have a ton of material on our COVID-19 Resource Center that may help you during this time. Check it out.
Published on: 05.21.20