Self-funded healthcare insurance is on the rise among smaller and mid-size businesses looking to manage employees’ healthcare.
Through self-funded healthcare, employers, rather than pay a hefty health insurance premium to insurers for their employees, “self-fund’’ premiums and assume most of the financial risk of employee health expenses. Employers pay claims through a third-party intermediary and can save significantly on premium payments.
In today’s rapidly evolving healthcare system, the percentage of workers in self-insured plans has been increasing. How do employers manage risk?
When it comes to maintaining healthy workforces, most employers face several challenges that could lead to significant costs if not adequately addressed. These challenges include managing chronic disease such as diabetes and hypertension; prescription drug costs and hospitalization costs – all of which make up the bulk of a company’s healthcare spending.
According to the Integrated Benefits Institute, U.S. workforce illness costs $227 billion a year in lost productivity when employees are absent due to illness or when they are underperforming because of poor health.
How does an employer manage costs while also improving the health of their employees?
One strategy is to catch diseases early. By implementing a comprehensive biometric screening analysis of employees, potential problems can be identified early. Biometric screenings check employees for risk markers such as weight, blood pressure, cholesterol and glucose levels.
With this aggressive outreach, companies can identify moderate-to-high risk employees and enroll them in a company-sponsored health and wellness program. As these employees improve their health, they fall into a lower-risk category, which helps lowers healthcare costs.
A large supermarket chain based in Texas, H-E-B, has seen these savings firsthand. “H-E-B’s internal analysis shows that annual healthcare claims are about $1500 higher among nonparticipants in its workplace wellness program than among participants with a high-risk health status,” according to a story in the Harvard Business Review.
Another strategy to lower healthcare costs is to focus on those employees already diagnosed with chronic diseases. Caring for employees with chronic disease drives a large portion of healthcare spending by way of doctor visits, hospital care, and pharmacy costs.
Managing chronic diseases can lower healthcare costs, according to a RAND Corporation study. Examining a large employee wellness program offered by PepsiCo, researchers found that “efforts to help employees manage chronic illnesses saved $3.78 in healthcare costs for every $1 invested in the effort,’’ according to the RAND Corporation.
Working with a healthcare provider that understands the challenges employers face is critical. Healthcare2U provides a network of direct primary care clinics so employees have convenient access to the healthcare they need.
Accessibility and convenience are two big factors that keep employees from going to the doctor and participating in programs that will keep them healthy and productive. By keeping employees out-of-pocket costs low and providing easy access to healthcare, employees can better follow medical regimens. An engaged patient is a healthier patient.
Direct primary care physicians know the value of controlling prescription drug costs to the employee and employer and the importance of prescribing generic prescription drugs when appropriate.
Our team of doctors act as healthcare advocates for employees and employers in reducing the number of unnecessary tests and procedures as determined by the American Board of Internal Medicine Foundation’s “Choosing Wisely” campaign.
The Choosing Wisely effort has garnered the participation of more than 70 medical specialty societies who have published more than 400 recommendations of overused tests and treatments that clinicians and patients should discuss.
Having a board-certified physician as an advocate can improve the health of employees while providing real savings in healthcare costs.
Healthcare is changing rapidly, don’t be left behind.
