How employers can get smart about cost-containment
Ever feel like working in the benefits industry is like the movie “Groundhog Day” brought to life? Every year, employee benefits account for 30% of total yearly payroll costs, healthcare costs go up, and employee deductibles and/or copays rise with them. Every year. Over and over. However, a growing number of employers are sick of living like Bill Murray, and realize they need to seek ways to get smarter about cost-containment — in ways that go beyond the low-hanging fruit of simply shifting higher costs to employees. Strategic use of data is the next frontier for savvy employers to more accurately zero in on how to best spend healthcare benefit dollars and the return they’ll achieve for that spend in reduced cost and a healthier workforce.
A robust analytics engine can stratify risk and identify cost drivers to produce insights on the unique risk factors within an employee population. However, big data is everywhere and companies offering data analysis are getting to be as commonplace as Starbucks locations. How can benefits teams like yours filter out the noise to find what truly counts as robust? Look for an analytics engine that’s clicking on these four cylinders:
1. Connected. The analytics vendor that can house all of your healthcare-related data in a single, secure warehouse that down traditional silos — medical claims, prescription claims, biometrics, plan data and expenses, wellness programs and eligibility — is one that’s a keeper. This is the only way for benefits teams to take a clear, birds-eye view of how your specific health plans are performing according to cost and clinical trends.
2. Automated. If a potential data partner doesn’t help you get rid of spreadsheets, keep looking. Today’s leading-edge technology combines supervised and unsupervised machine learning algorithms that can automatically generate reports. This level of automation can highlight areas of concern, provide an accurate assessment of plan performance, and enhance the ability to manage plans more responsively.
3. Predictive. Don’t make next year’s decisions with last year’s data. When evaluating vendors, probe about whether their analytics engine can “see around corners,” so to speak: Ask if the technology is both advanced and granular enough to identify future risk, cash flows, clinical risk, disease progression and more. This will allow your team to improve your understanding of what has happened, and how to predict important future trends.
4. Prescriptive. At a recent HR technology conference, Scott Pitasky, EVP and Chief Partner Resources Officer at Starbucks, told the audience, “We’re all trying to find the needle in the haystack. Technology is showing us there are a lot of haystacks out there.” True, and finding prescriptive analysis is the needle. There are very few companies that do this at all — let alone well. However, make sure your call for proposal asks about prescriptive capabilities because it can be a game changer for your organization’s benefits strategy. Prescriptive analysis allows for plan designs recommendations that are tailored to the specific healthcare needs of your employee population, taking into account future predictions about population health and financial shifts to contain costs and maintain quality of care and benefit levels.
Elevating your data analytics capabilities this way won’t only benefit your team’s decision-making or your organization’s bottom line. It also can arm you with information to help communicate with employees about how to make more informed benefits selections according to their specific life stage, health knowledge, medical spending, and other factors. It’s easy to present someone with the lowest-cost plan; it’s more difficult, but ultimately more valuable, to give someone personalized information about what plan might be right for them, based on their needs and habits. Technology can be the differentiator.