Why VBC must be the foundation of employer benefit structures

Employers offering health and other benefits are making a tremendous financial commitment to pay premiums to insurers or self-fund their own claims. They also are under pressure to make their programs pay off in terms of employee productivity, morale, recruitment, and retention.

A well-designed employee benefits program can help organizations attract and retain quality employees. This alone can make your organization’s benefits program a strategic asset. To ensure its success, however, your organization must design its benefits program to incentivize employee participation. Without tailoring benefits in such a way that employees are eager and able to enroll, your benefits program will underperform.

In the past couple of years, more employers have been making efforts to boost awareness within their employee base about the different types of wellness and life management resources available to them. This movement is long overdue and reflects the growing belief among employers that value-based care (VBC) in the context of whole-person care improves the overall health of employees while lowering organizational costs. Value-based programs tie provider reimbursement to patient outcomes and the quality and efficiency of care delivered.

Part of VBC includes the incorporation of a focused effort to reduce the adverse impact of Social Determinants of Health (SDoH) – or “drivers of health” (DOH), as Ann-Somers Hogg of The Christensen Institute identifies them, on outcomes and health care costs. These include access to quality health care, plus predominantly non-medical factors such as stable employment and housing, transportation access, education level and quality, access to and affordability of healthy foods, and social connections and support.

Read more: Attract and retain employees with a modern employee benefits program

Centering benefits around VBC is a sound business decision because employers need better accountability for their health care dollars (due in part to the price-sensitive nature of the employer benefit environment), and accountability is built into VBC contracts. Likewise, benefit design must further facilitate patient and primary care collaboration, inclusive of community and home-based services.

Poor return on investment

There needs to be an emphasis on continued, algorithmic exploration of what is low- and high-value care. A significant amount of care being delivered today is unnecessary, such as duplicative services where the same tests are being run.

When you look at what we’re getting for our dollar versus other developed nations, the U.S. measures up quite poorly. In a 2021 report, the Commonwealth Fund ranked the U.S. last of 11 high-income countries in the world in access to care, administrative efficiency, equity, and health care outcomes, despite “spending far more of its gross domestic product on health care.”

The report cites four features that distinguish top-performing countries from the U.S.: 1) they offer universal coverage and remove cost barriers to care 2) they invest in primary care systems to ensure high-value health care services are equitably available in all communities and to all people 3) they reduce administrative burdens that divert resources from health improvement efforts, and 4) they invest in social services.

For employers designing a benefits program, there are lessons to be learned. For example, many employees for financial reasons may be unable to leverage community services offered in a benefits program unless there are minimal or no cost. Designing your benefits program to meet the needs of economically disadvantaged employees encourages participation.

The value of intervention

A crucial tenet of VBC is preventive care through routine screening and early detection, which will be increasingly reported via wearable devices. These are particularly critical for preventing and treating chronic diseases, which account for 90% of health care spending in the U.S. Six in 10 Americans live with at least one chronic condition, while 4 in 10 have more than one chronic condition, according to data from the Centers for Disease Control and Prevention (CDC).

It is far more cost-effective to pay for primary care, nutritional counseling, and smoking-cessation classes than cover claims for insulin and cancer surgery. Thus, early intervention and detection initiatives that keep your employees out of the hospital is money well spent.

Other considerations when designing a benefits package are transportation and scheduling flexibility challenges that employees might face in trying to access wellness and community resources. In addition, many of your employees may find value in a benefits program with a care-navigation component enabling them to reach out to a care navigator for help finding specific resources such as mental health services.

Administering VBC relationships

When dealing with multiple relationships across a value-based network, employers and other network members require a value-based administration (VBA) platform. A cloud-based VBA platform can facilitate whole-person care through the simultaneous orchestration of medical and nonmedical care delivery and services that contribute to better patient outcomes and lower health care costs.

As employers continue to foot a significant amount of the health care bill in the U.S., they must optimize their investments by structuring benefits programs in a way that aligns with the needs of employees and enables better health outcomes while reducing costs of care. They also must develop a VBC network that incorporates community organizations offering wellness and other support services.

Related: 2022 BenefitsPRO health care survey: Cracks in the foundation?

This network can be used to coordinate population-centric initiatives that can be applied on the individual patient level and to ensure data sharing and compensation for services rendered. The result will be a healthier, more stable, and more productive workforce. VBA is the key to attaining this goal.

More accountability for the type and volume of services would help with the cost curve and improve patient health and wellbeing. Employers can do their part by making VBC the foundation of their employee benefits programs.

Lynn Carroll is the chief operations officer and Rahul Sharma, chief executive officer, of HSBlox, which assists health care stakeholders at the intersection of value-based care and precision health with a secure, information-rich approach to event-based, patient-centric digital health care processes – empowering whole health in traditional care settings, the home and in the community.