Why benefits managers need to explore 'value'
The term “value-based care” is common among health care payers and providers but not health benefits space. Why not?
Benefits managers are navigating the intersection of employee health and business health as never before. COVID-19 is shining a whole new light on health benefits, and it’s not just premium dollars at stake.
A 2020 survey by Business Group on Health notes that 45% of employers now consider investments in health and well-being an “integral” part of their overall workforce strategy—up from 36% in 2019. Likewise, a recent Mercer study shows that the projected increase in next year’s benefits costs has not shaken companies’ commitment to employee benefits.
Related: CFOs: Benefits plans must focus on employee health
With COVID-19 placing undue strain on employers’ bottom lines and employees’ physical, mental and financial health, there is no better time to revisit the definition of value in the context of health care benefits.
Value as a foundational concept
Value-based care is not a new concept within health care circles. In fact, the Institute for Healthcare Improvement (IHI) has spent more than a dozen years coaching its official Triple Aim Initiative (and unofficial Quadruple Aim initiative). It’s a proven path aimed at: 1) improving the health of populations, 2) enhancing the care experience, 3) lowering per capita costs—and 4) encouraging staff satisfaction along the way.
The term “value-based care” often is used by health care payers and providers to describe care delivery models designed to achieve the Quadruple Aim. However, it’s seldom used within the health benefits space. The question is, why not?
Quadruple Aim guideposts
Employees may be hurting in many different ways as a result of the pandemic—physically, mentally, emotionally, financially. As benefits managers explore new strategies to control costs and deliver robust offerings that attend to the full range of employees’ needs, now may be the right time to think about the Quadruple Aim as a framework for getting true value from benefits providers.
Here are some ways to approach health benefits through the lens of each “aim:”
Aim #1: Improving the health of populations
Every business has a unique employee population—even within the same industry, geography and demographics. What works for a competitor down the street may not work for the individuals in your company. So, to be effective, health solutions must be able to identify the distinct clinical and non-clinical risk factors within each employee population, as well as provide highly tailored clinical programs to address them.
Benefit programs that encourage management of specific conditions—such as heart disease or diabetes, for example—are a good first step. But they don’t go far enough. Instead a more holistic view of risk that is then used to wrap the appropriate services around each individual population is required. This analysis should weigh socioeconomic factors, pharmacy data and “secondary” diagnoses as well as any high-risk diagnoses to create programs that truly move the needle on cost and outcomes.
On the surface, for instance, most employee populations probably appear relatively unchanged from the way they were six or nine months ago. But what about employees whose health is impacted by mental health issues such as anxiety or depression brought on by the pandemic?
COVID-19 illustrates why benefits managers need programs that assess employees’ clinical risk by understanding more than just a single diagnosis. As benefits managers look for ways to make their employees feel more supported in this time of uncertainty, they should demand that their providers take a holistic view of their employee population—then use that view to tailor effective clinical programs that rise up to their staff’s unique health needs.
Aim #2: Enhancing the care experience for individuals
This is not the time to choose between lower benefits costs or satisfied employees. A new consumer survey found that 71% of working Americans plan to scrutinize their benefits options more closely this enrollment period than last year, and more than half of the respondents expect to make changes to their coverages. In other words, employees want service and satisfaction.
With the right benefits, higher satisfaction is possible. To achieve it, here are a few questions benefits managers should ask:
- What if benefits providers acted like they existed at the intersection of health care and hospitality?
- What would that mean for the experience of care?
- What if the benchmark for customer service were the Four Seasons?
Such questions force a different way of thinking about the employee care experience. With pharmacy benefits, for instance, most employees simply want a frictionless transactional experience. For them, good customer service involves getting the medications they need quickly and easily because, behind the scenes, their pharmacy benefit managers (PBMs) have removed formulary access barriers.
On the other hand, individuals who are high utilizers—including those with chronic conditions or other high-risk factors—may need more personalized service to feel cared for throughout their health journey. For these employees, benefits managers should consider offering benefits with complex case management. Such customizable and high-touch service allows employers to reduce their financial risk and improve the outcomes and care experience for employees.
Aim #3: Reducing the per capita cost of health care
By letting clinical appropriateness drive benefits decisions, employees receive the support they need to improve their health outcomes—which ultimately leads to lower costs for both employee and employer. But benefits managers shouldn’t just take that statement on faith. Instead, they should seek solutions that guarantee cost savings alongside trend management.
That is the essence of pay-for-performance benefits models. A truly value-based model is one that creates genuine partnership by directly aligning employer/employee outcomes to the benefits provider’s income.
The importance of pay-for-performance in achieving value becomes clear if we consider the misalignment propagated by traditional volume-oriented solutions. In health care, for example, traditional reimbursement models pay providers for the sheer number of services delivered—regardless whether they’re the highest quality, most clinically appropriate or most cost-effective services possible.
Benefits managers are better served by providers who adopt a clinical-first, service-oriented approach that generates value by working proactively to raise health outcomes and thus lower total health care costs.
Aim #4: Raising staff satisfaction
This “unofficial” fourth aim acknowledges that engaged health care providers are more likely to drive positive outcomes, while burnout may very well threaten the overarching goal of delivering value. Likewise, when benefits managers don’t feel supported with the right benefits to provide strong care for their teams, engaging employees in their care experience becomes an uphill battle.
At this point in time, staff satisfaction most likely will come from taking care of employees’ mental, physical and financial health needs, as well as building a company culture of diversity, inclusion and belonging. So, benefits managers should seek partners who really look for ways to promote satisfaction—both within their own organizations and without. Ask benefits providers a few blunt questions such as:
- How are you factoring in the health care aspects of the benefits you offer vs. just the financial aspects?
- What are the top three employee satisfaction initiatives undertaken within your own company that illustrate why we’ll have a positive customer relationship?
Benefits providers should be able to build and support a longstanding and ongoing culture of engagement, diversity and satisfaction.
Aim for value
We stand at a critical point in time for employers forced by COVID-19 to explore new strategies to mitigate rising health care costs while supporting their employees’ mental, physical and financial well-being. Benefits providers should not walk away from this challenge, but instead bear equal responsibility for helping employers accomplish it. Backed by the tenets of the Quadruple Aim, benefits managers must begin demanding value from their providers on behalf of their companies and their employees.
Karthik Ganesh is CEO of EmpiRx Health.
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