Tribridge Partners

Employer health plans: Is that a threat?

Thought Leadership on Employee Benefits-Risk & Reward presented by TriBridge Partners.

This is part 2 in our series, 3 ways to apply farming principles to a health plan.

As a child growing up in a farming community, I was given the opportunity to experience the early mornings and daily routines associated with raising livestock, baling hay, and overall land and resource maintenance. I was also able to witness the ecosystem that allowed a well run farm to make necessary improvements while preserving the working elements.

An employee workforce can be viewed in a very similar way, with HR as the caretaker or the “farmer,” charged with the responsibility of being a good steward. They have an eye on what needs to be improved, all while keeping the ecosystem in balance.

In our last presentation we discussed “bales and bundles.” Today we will address the threats in your health plan.

Farmers deal in per-unit costs. If I buy this seed for X and I sell for Y, what will my profit be? How much do I expect to lose due to predators, disease, weather, etc.? The more units to be counted, the more complex the arithmetic and the more sophisticated the solutions required. How often to feed or fertilize? What brand to use?  How many workers will we need? Do we need more tractors or less land?  Should we expand? What investments do we need to make?

Addressing livestock that consists of three or four chickens or stewarding a garden is much different than addressing 7000 chickens or miles of acreage. And yet, the objective is still the same: to be efficient, to be effective and to be a good steward. Being a good steward requires a proactive approach, getting up early, planning in advance and engaging the right team to accomplish the objective.

This same principle applies to your employer health plan. As your workforce grows, the per-unit costs matter more and more. How much care is each unit (or member) consuming, and is it the right care? We are providing healthcare to our workforce, but is it efficient for them? Is it effective for them?  Are they truly receiving the best value in care?

Addressing this issue requires higher levels of transparency combined with the right technology and expertise.  Failing to do this means that your per-unit costs will continue to rise. With smaller workforces this may be easier to resolve, but with a larger employee base, every cent matters.

The impact of not paying attention to the right details is as insidious as it can be catastrophic. For example, recruiting and retaining talent becomes more challenging if your competition is more effective at controlling their healthcare costs. They will have better margins and can invest in/offer more attractive compensation and benefits programs.

Another example is engagement because employees (or their families) that are distracted by the ramifications of an ineffective health plan are not going to be as engaged in their jobs because they are dealing with unpleasant doctor or pharmacy visits, or perhaps because the pass-through costs of the inefficient health plan are creating other stresses in their lives.

So what is the solution?  As with most problems we face, there are normally multiple variables to address – not just one. It may seem attractive to try and point at one or two issues, but that is never the case. Stewarding an effective and efficient healthcare plan requires discipline and both intention and action. Designing and implementing strategies proactively should NEVER just be a reaction to a premium increase.

Seek out a broker and advisor who has evolved with the changes in healthcare, and who is clearly competent when it comes to dealing with the per-unit approach to healthcare in a proactive way. This means she or he will need to be able to demonstrate a strong working knowledge on these matters and a proven system for discovering threats, isolating the real ones and executing solutions.

Benchmark your plan so you know what “good” looks like and so you have a goal. Identify and isolate the threats that are unique to your workforce, such as low utilization of preventive services, repetitive doctor visits or inconsistency in prescription management. Evaluate the most effective resources, tools, and best practices to prevent and eliminate threats – and to stabilize what you cannot change. Engage your employees and learn about how they are using the plan. Then select internal champions to help facilitate support throughout the workforce and when on or off site.

The farm will never survive bad weather, disease, and the other threats without engaging the right team, being proactive, having a plan, and leveraging the most suitable resources to be effective and efficient. When it is all said and done, everyone, from the farmer’s family, to the livestock, to the environment, and ultimately to the grocery store shopper suffers when the farmer doesn’t pay attention and simply reacts to realities that were previously simply threats.

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