America's Benefit Specialist November 2022

TACKLING HEALTHCARE COSTS

The status quo. Employers need to think differently and do things in the best interest of their employees. Companies need to start putting employees first instead of cost shift ing the burden of cost onto their employees with high deductibles, out-of-pocket max imums and employee contributions when making healthcare plan decisions. How do we solve the affordability of healthcare from an employee benefits per spective? Slashing costs to weather a tempo rary storm will not suffice. Executives must pursue both near-term savings opportunities and longer-term clinical risk reductions. Employers that construct a comprehensive cost-containment strategy to lower expenses while reinvesting in plan design can control their bottom line and give employees quality, affordable benefit options. Thankfully, when it comes to bringing down expenses for employers, we have identified the suite of best practices to lower employee benefit cost. These strate gies are drawn from across our consulting and clinical best practices and represent a proven approach to generate near and medi um-term savings. They also have the widest applicability across organizations. The first step is understanding your con tracts. Most employers have TPA and PBM contracts that were not evaluated compre hensively. TPA and PBM revenue is driven by contract provisions, not invoiced services. Deep expertise is required to identify and

proposition. Employers have opportunities to drive both cost savings and improvements in member care. As a collective system, we can all be a part of the solution to bring prices down and allow more people to seek the care they need for a healthier future.

negotiate vendor profits effectively. When employers and advisors focus primarily on the invoiced costs, they miss the bulk of the vendor’s revenue, which produces uncom petitive contracts. The second step is to develop a clini cal risk-reduction strategy. We do this by evaluating large claims that are over $50k and summarizing the large claims by level of impact and clinical intervention/pathway. For example, primary care is the founda tion of preventive, acute and chronic care for employees. Without effective primary care, members experience heart attacks, strokes, Stage 3 preventable cancer and unnecessary surgery. Medicare Advantage, a system mostly rooted in primary care, is making positive waves in the industry while reducing finan cial burden for recipients. Employers and plan sponsors cannot do it all themselves. It will also be critical to address the “supply” issue of healthcare in the U.S.—we simply need more doctors, hospitals and primary care to reach the many portions of our population. This will help address many social determinants of health (where people are born, learn, grow, live, work and age) so that we can move closer to a healthcare system that is geared toward health and wellness—and one that is less directed by institutional profits. Innovative disruptors are helping employ ers rethink their employee healthcare value

1 https://jamanetwork.com/journals/jama networkopen/fullarticle/2796358

Jim Holder advises medium and large employers on advanced design and

clinical strategies to reduce the burden of healthcare cost on employers and their employees. An influential and collaborative leader in the community, in 2016 Jim was appointed to the Colorado governor’s 15-person eHealth Commission created to provide advice and guidance on advancing Health Information Technology in Colorado. He serves as a board member of City Year Denver, Mile High United Way and Downtown Denver Partnership. In 2015, he received Volunteer of the Year Award for service on the Downtown Denver Partner ship. His healthcare experience includes leadership roles at Cigna, Ascension Insurance, wellPORTAL and PowerHealth OnDemand. He earned a bachelor’s degree in finance from New Mexico State University.

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