Hospitals and health care entities are reexamining their employee health plans to strike a balance between managing costs and retaining talent.

"While medical plan designs are remaining fairly standard, hospitals are looking to add choices and options for their employees as a way to remain competitive and address the recruiting and retention challenges they're facing," says Lola Brysz, Hospital Market Segment Vice President at UMR. "Telemedicine and behavioral health options continue to be in demand in a post-COVID environment, and we're also seeing hospitals expand their wellbeing programs."

Brysz says, "Further, hospitals are casting a wider net with respect to recruiting and now offer telecommuting opportunities to fill vacant positions.  The result is that for locations that are not near the hospital, the strategy changes from a focus on domestic steerage to finding cost-effective and high-quality networks that can be offered to help manage trend and provide for competitive benefit offerings."

Optimizing plan designs to drive domestic steerage

Increasing utilization of the hospital's services and providers through the health plan is a major focus as hospitals manage their medical trend.

"Plan designs that provide for a higher benefit level when an employee uses the facility are a primary way to drive domestic steerage.  Plan administrators are looking for flexibility in adding affiliates to tier 1 structures, paying a higher level of benefits when services are performed at the hospital and covering certain services only when they are performed at the facility," Brysz says. "Also, we're seeing our customers focusing on actively engaging employees in care programs that result in improved health and use internal clinical resources for care."

Advocacy models are another strategy hospitals can implement to help with domestic steerage and enhance the employee experience.

"Advocacy models don't just assist employee members with questions about benefits or claims," Brysz explains. "The approach moves from transactional to relationship-based, with advocates also supporting members in finding a provider, exploring additional benefits and identifying gaps in care."

Structuring multi-tiered plans to maximize savings 

Hospitals are also emphasizing the incentives within tiered plan structures as they add choices and manage medical cost trend. The most important factor, Brysz says, is keeping the design simple so the fiscal advantages of using Tier 1 benefits are easy for employees to understand.

"When designing multi-tiered plans, hospitals need to review their internal capacity and resources," Brysz adds. "For example, if the Tier 1 plan covers all ortho procedures at the highest benefit, the hospital must make sure it has the internal capacity and staffing so employees don't have to wait a long period of time to get treated."

It's also critical to understand the benefit differentials. Hospitals must assess their fiscal position based on what their services cost, the benefit level that would cover those costs and the benefit level that would be acceptable to employees.

Accessible data is critical for understanding where services are being performed. "When designing a multi-tiered benefit plan, hospitals need reporting capabilities that allow them to analyze what services are staying in-house, which are leaking out, and what can be done about it," Brysz explains.

Broker's role in unlocking value for hospital clients

Brokers need a strategic, holistic approach to designing plans to meet the needs of hospital plan sponsors, Brysz says.

"Effective brokers understand the landscape of the health care business and bring solutions that help manage medical trend. They need to understand where the hospital wants to emphasize care, how they can manage their trend and where they want to be in three years with respect to the plan," Brysz adds.

Learn more about how UMR, the nation's largest medical TPA, helps brokers and hospitals deliver custom plan designs, cost-containment solutions and innovative services.