For an industry that deals with people who have more computing power on their Smartphones than NASA used to land a man on the moon, some benefit adviser still struggle to convince employees to adopt new benefit innovations. This was a mixed year of IT innovation and adoption especially among retirement robo-advisers, data analytics providers and the like. Even the near ubiquitous arm bands that monitor heart rate skipped a few beats in 2016.
Rise of the robo-advisers
One of the biggest challenges of small businesses is offering a decent retirement package to its workers. Seeing an opportunity, a new breed of online startups have stepped forward to deliver automated signup and monitoring of 401(k) retirement plans. These robo-advisers — firms like Betterment, Dream Forward Financial, ForUsAll, and Captain401, for example — are handling funds for small to medium-sized business across the country.
And the numbers are impressive. Robo-advisers could manage as much as $5 trillion to $7 trillion within the next 10 years compared to the near $100 billion overseen in 2015, predicts Deloitte Consulting. The firm also notes that this amount, which represents 10% to 15% of U.S. retail AUM, could be a conservative estimate.
But challenges remain, especially for the benefit adviser who implements one or more of these plans. The forthcoming fiduciary rule from the Department of Labor could complicate the role of these robo-adviser firms.
“Selecting a robo-adviser is going to be the same sort of process as picking your adviser,” said Tom Clark, an attorney with The Wagner Law Group at this year’s Workplace Benefits Summit in Nashville. “Make the decision in the best interest of your plan participants.”
Betterment for Business’ General Manager Cynthia Loh added that while the final rule is widely talked about, it still isn’t very well understood.
“Explore all your options out there,” she advised. “Employees are more likely to engage with digital tools they can look at on their time. But given where we are today, it’s prudent with the DOL rule coming, on what’s out there. Make sure you understand what your fees are and what your employees are getting and what your employees’ needs are.”
Betterment claims to have more than 200,000 customers and an estimated $6 billion in AUM.
Take two aspirin and call the telemedicine provider
Benefit advisers embraced telemedicine in 2016 in a big way — even if employees were slow to use this technological advancement. Telemedicine service offerings among large employers surged to 59% this year from just 30% in 2015, according to Mercer’s National Survey of Employer-Sponsored Health Plans. While this was good news on the surface, this healthcare strategy still sees historically low use of this benefit.
The survey also noted the potential for significant savings when health plan members have a telephonic or video visit to assess some types of non-acute issues, especially before their annual deductible is met. A telemedicine visit typically costs $40 versus $125 for an in-office visit.
Telehealth fell short of the mark, Hello Heart CEO Maayan Cohen says. “The average adoption rate is under 1% even though there are excellent services out there with great technology. When it’s time to go to a doctor, patients often forget that they have access to telehealth services, unless they are being actively referred, so the utilization rate is very disappointing for most employers.”
That said, 2017 could be a solid year for telemedicine. In the next year, Workweek Wellness CEO Brandon Weafer is looking for “innovations in digital coaching especially for chronic conditions, stress management and sleep are also worth keeping an eye on.”
Weafer says, “The majority of patients with these specific conditions don’t acknowledge their diagnosis or don’t have enough time to manage it. Digital coaching helps solve both these problems at a scalable level.”
Transparency tools see clearer
In the quest to cut benefit healthcare costs, benefit advisers are relying more and more on data analytics. The aim is to present transparency in costs from health service providers but getting employees to use the data in their healthcare decisions remains a challenge.
“When you look at transparency, one of the keys is how do you get people to use it? As well as what is the data that is involved with it?” said Mary Catherine Person, president, HealthSCOPE Benefits at an EBA Workplace Benefits Summit session entitled “The future of transparency — Separating fact from fear.”
Another challenge is the myriad sources of the data that drives the analytics and transparency efforts. “When you look at transparency tools, there is a wide swath of tools that use different version of the data. Some are using state data, Medicare data, commercial data augmented by the other guys,” said Person. “One of the things we discovered was some firms saw variations in their data in pricing in the same network based on the type of network they were using.”
No one is giving up on the promise of data analytics and its role for health plan transparency. “When someone interacts with technology, the owner of the software collects a lot of different user data. This wide variety of data — personal user, geolocation, date/time, etc. — gives us a very different insight into how peoples not only utilize health/wellness information in their daily lives but allows us to see overall trends,” says Workweek’s Weafer.
The data available to transparency vendors and health plans is getting better and better, according to David Fortosis, senior vice president at Aon Hewitt. However, he adds that “robust and actionable data on both cost and quality is not universally available in each city or geography.”
The cost data is usually quite reliable for a defined set of procedures and services but not for all care, according to Fortosis.
“Quality data can often be harder to define and measure. Reason being that quality data must be derived from examining large sets of actual claims data, compared to high performing benchmarks — and then risk adjusted,” says Fortosis.
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