In the three years since private health insurance exchanges have reshaped the landscape for managing active employee populations, attention has shifted from enrollment numbers to changes in employee behavior. One such area that’s fit for further examination is disease management, which represents a meaningful opportunity to improve outcomes and cut costs.
“The concept of a private exchange isn’t just about shifting risk and cost,” observes Rick Strater, division VP and national exchange practice leader for Arthur J. Gallagher & Co., whose Gallagher Marketplace is powered by Liazon Corp. “The brass ring is really driving engagement. And so, from a disease management standpoint, I think that’s where the real opportunity is.”
As employees become more engaged in the process, he says the hope is that they will question doctor recommendations, and as such, make better decisions. When people actually care about their care, observers say they have a much better chance to achieve positive results.
“If we can get them to say ‘I need to have that MRI, and I’m going to go to a freestanding facility that is a tenth the cost of going to the hospital, where I’m going to get comparable equipment and comparable care,’ that’s a huge win,” Strater explains. “And that’s really where this is headed.”
Also see: “Behind Fidelity’s move into private exchanges.”
DM programs being implemented in and off the exchanges are essentially the same, according to Mike Christie, market leader for Aon’s exchange solutions business. The critical difference, he says, is employees are more engaged in an exchange model than one- or two-plan options where they don’t necessarily get to choose their carrier.
“So that, combined with the fact that often, they are enrolling in plans that have more out-of-pocket risk, means that they are more incented to engage in things that will help them save money, not just the company,” he explains.
Eric Grossman, active exchange leader for Mercer Marketplace, agrees – noting that “a significantly higher percentage of members [are] choosing medical plans that require more skin in the game, if you will – higher deductibles, higher cost sharing.”
Early intervention and better employee engagement will help reduce the potentially huge risks and expenses associated with chronic conditions. But these efforts must integrate the DM with wellness incentives, biometric screening and health reimbursement arrangements, explains Sherri Bockhorst, managing director of Willis Towers Watson’s exchange solutions business. Only then can employees in an exchange “make better decisions that keep them out of disease management,” she adds.
Barbara Gniewek, a principal in the healthcare practice of PricewaterhouseCoopers who oversees the Private Exchange Evaluation Collaborative, thinks private exchanges represent a better conduit for engaging employees in DM programs than traditional approaches.
Armed with the right set of tools, Gniewek notes that an exchange platform eases the selection of providers, treatments and clinical protocols at the point of care as healthcare choices become much more complex. One critical area she cites is giving consumers enough information to assess the variability of life-enhancing specialty drugs.
She believes employers have long “shied away from progressive care management programs to avoid noise. And on the exchange, they can bring them back in as an option, or they typically do it more broadly.”
Also see: “Digital innovations in employee benefits.”
The idea is that employers can overlay transparency tools, advocacy programs and consulting services to beef up their DM effort. Gniewek says the two consultancies that offer care management overlays typically state savings of between 1.5% and 3% over carrier-only models.
QuoteWhat an exchange really does is give you the technology to make this stuff work easier, and if it’s easier, then employees will use it, and they’ll get more engaged.
“What an exchange really does is give you the technology to make this stuff work easier, and if it’s easier, then employees will use it, and they’ll get more engaged,” she explains, noting how it’s trickling down market to small and midsize employers. “And that’s what it’s about: engage people and help them to get a little bit more accountable for the care they receive or how well they take care of themselves.”
Middle-market employers that use Willis Towers Watson’s private exchange are able to access the same consulting expertise and custom case management program as large or jumbo customers. Included in the mix are the same clinical protocols used by multiple carriers, as well as standardized performance guarantees, to help elevate the level of DM. Bockhorst says it’s unusual to have a consistent DM or care management program across all carriers within a multi-carrier exchange.
Willis Towers Watson’s custom care management unit has been road-tested with large employers over a number of years prior to the exchange. Bockhorst notes that hospital admissions were reduced by up to 30% per 1,000 lives and re-admissions cut even higher up to a 50%. In addition, diabetics have been able to exceed hemoglobin A1c test compliance targets up to 10%. Other key metrics have shown that 30% to 50% of those identified engage in the program, while return on investment can be up to 3:1.
One pitfall is that many brokers and other practitioners view private exchanges as an open-enrollment product rather than an ongoing process that includes DM, according to Strater. Ensuring that exchange plans are priced appropriately based on an actuarial analysis will pay off in the end in terms of better decision-making, which in turn, will produce more favorable results.
“There’s a knee-jerk reaction a lot of people have that would suggest that if they have a chronic illness and are anticipating significant costs in a given year, that they should take a lower deductible plan with a lower stop loss,” Strater says. “I would argue that it may not, in fact, be the case” for those who will exhaust their out-of-pocket maximum.
When private exchanges were introduced for active employee populations, the emphasis was on choice through a technology platform that would make it easier to shop for healthcare, according to Gniewek. She says the focus has since shifted to providing enough information to help consumers make wiser decisions, but also hold them more accountable for their choices.
This helps employers “get at the real problem, which is the cost of care,” Gniewek observes. “So once people deal with the demand side and are engaged, then we can start working with different types of networks and providers.” Progress is made when consumers understand the difference between needing an ER visit vs. placing a call to Teladoc in terms of price and the most appropriate method of care delivery. “That’s the only way we’re going to solve the crisis in healthcare,” she says.
All private exchanges eventually will have personal dashboards to help consumers improve their care year-round beyond just picking a plan during open enrollment, Gniewek predicts. Diabetics, for example, would be able to determine whether they forgot to refill their test strips or insulin. “Because of the technology, it’s easier, especially when you have these nurses overlay disease management programs or advocacy kind of programs,” she explains.
The idea of getting push technology on a smartphone is particularly appealing to younger generations for whom it feels natural to be on their devices or gadgets, according to Gniewek. She also credits the creation of healthcare apps with helping move the needle on DM within the private exchange platform. “From a disease management perspective, I think that works particularly well because it’s customized,” she says.
A linchpin of success for DM programs on a private exchange, no doubt, is technology for a more consumer-friendly experience. But Christie also cites customer service as another key component of the exchange platform. Drug utilization and other DM program interaction between consumers and their health plans on a private exchange are oftentimes personal or emotional and not well-suited for technology, he explains. “We view that aspect of the exchange model as expanding,” he predicts.
While private exchanges have operated for a number of years for retirees on the Medicare side, Grossman believes pre-65 retirees will be a sought-after demographic for the private exchange platforms because of the public exchanges amid a backdrop of a robust individual insurance market.
There’s also growing interest in accountable care organizations, an area where Grossman believes private exchanges can provide a platform that brings better DM within reach of more employers and their group health plan members.
Success is unlocked when ACOs assume responsibility and risk to drive cost management through better patient care, according to Grossman. “So all of a sudden,” he says, “it becomes within the ACO’s best interest to make sure that they provide fully coordinated, integrated care to the member, that they very actively educate members, especially those with chronic conditions, around appropriate care, prevention and treatment.”
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