Never before have employees had to care much about whether a prescription was brand name or generic; they just had a copay. Maybe that copay was more expensive for the brand name drug, but it was manageable in comparison with paying the full retail price. They also never had to pay more than a copay for a doctor visit, but now they’re on the hook for the whole bill (at least until they reach their deductible). It’s understandable that many people feel confused and frustrated by this change in benefits.
This is not, however, an impossible transition. With more and more companies shifting to HDHPs every year, the education challenge is widespread. Engaging employees in the decision making process will empower them to feel as if they can make good decisions on their own — instead of expecting their employer to do it for them. With some education and a little assistance from your employee benefits broker and internal communications team, employees can gain the confidence they need to control their healthcare spending. Here are a few things employers can do to engage their employees in consumer driven healthcare.
Prescription Drugs
When employers switch to consumer driven healthcare, prescription costs for employees will most certainly become a much larger out-of-pocket expense than it was with a more traditional plan. This will throw employees with expensive meds for a loop. Suddenly their $60 per month medication is $345. Luckily, the migration toward consumer driven healthcare has created some new opportunities, as the market recognizes this burden and is taking steps to help curb costs for the average consumer.
GoodRX and Healthiest You are two resources where employees can save money in this area. Users can compare prices at various pharmacies and print coupons to save up to 80 percent on their prescription drugs. In addition, many drug companies will offer coupons on their own websites, and patients shouldn't be shy about asking their doctors for coupons or samples, especially if the doctor is having them "try" a new medication.
Employees should also speak-up when their doctor is writing them a prescription. Not all physicians automatically prescribe generics, and a study found that doctors are generally unaware of the cost of the medicine they prescribe. Since nearly 80 percent of FDA-approved drugs have generic alternatives that cost an average of 4 times less than the brand-name versions, speaking up can result in substantial savings. (A bit of good news here - some pharmacies will even default to filling a prescription with a generic, if one is available.)
Price shopping pharmacies should also be encouraged; Walmart provides hundreds of generic drugs for $4 for a 30-day supply, and $10 for a 90-day supply. Another option is switching to mail order prescriptions, such as through Express Scripts or CVS Health, especially for maintenance medications employees take every month. Mail order services are almost always less expensive than going to a brick and mortar pharmacy, with some prescriptions being nearly $100 less per month (obviously, depending on the medication). Typically, these prescriptions arrive in the policyholder’s mailbox in a three month supply. While this means a higher upfront cost, it’s cheaper per month.
Lastly, encourage employees to look into patient assistance programs. Many pharmaceutical companies have programs that provide their drugs at deep discounts or even free for people in need. If you have an employee who needs a high-cost drug, check out the company’s website to see if they offer assistance. Also, consult NeedyMeds for information on almost 6,000 patient assistance programs.
If employees are willing to spend just a little bit of time looking around, they could save themselves quite a bit of cash when it comes to prescription drug expenses.
Other Ways To Save
A staggering 80 percent of medical bills contain mistakes, according to the Medical Billing Advocates of America. Employees should therefore be on the lookout for errors. Suggest to employees that they look at their Explanation of Benefits (EOB) statements closely. The EOB shows the amount the insurance company paid to their provider, in addition to the amount they will be expected to pay. They should make sure their statements correctly show the treatment they received and any copayments or coinsurance they paid.
Introduce your employees to Simplee, which is a free online tool that tracks what an employee spends on healthcare. It links their insurance plans and health-spending accounts on one dashboard. A user-friendly breakdown of each bill shows what insurance covers and what they owe, and the site examines each claim to identify billing errors.
Encourage employees to question follow-up appointments. When a doctor tells them to come back, whether it’s in 3 weeks, 6 months, or a year, suggest they ask why. A phone call might suffice. When going for a second opinion, suggest to them that they should sign out their x-rays or MRI scans from their doctor and bring them to the next appointment.
Make sure your employees are taking advantage of their "freebies." Do everything you can to get employees to schedule anything which is fully covered, such as annual physicals, dental and vision exams, age appropriate health screenings, and any other preventative care services.
Empowering consumers to shop around is one of the cornerstones of consumer driven healthcare, but not all people feel comfortable doing so — nor have much of a desire to spend the time doing the
For example, if non-emergent surgery is required (like a hip or knee replacement), insurance companies have a lot of reasons to want policyholders to shop around, as costs can vary widely between providers. Getting a second opinion or meeting with two different surgeons (in different hospital systems or outpatient centers) may help bring down the cost of the procedure. In addition, this process may help the patient find a specialist they like better than one suggested to them by their PCP (primary care physician).
Several Internet companies now operate sites that let consumers search and compare pricing in their area. Healthcare Bluebook offers a suggested “fair price” for a service, based on a database of rates paid by private insurers. Change Healthcare provides estimates of how much individual providers are paid by insurers, based on claims data from health plans. And New Choice Health gives providers’ list prices, which are derived from Medicare data. Employees can also check for prices posted by specific hospitals and doctors, though these are still relatively rare to find. A few hospitals are revealing roughly what they’re paid by insurers or offering calculators so insured patients can figure their out-of-pocket fees. Services like PriceDoc seek to aggregate listings from doctors.
While it's not in our nature as Americans to haggle, it's quite customary in other parts of the world, and it would be a good trait for us to adopt as healthcare consumerism takes hold. Employees should be encouraged to use Healthcare Bluebook to find the fair price of a procedure, or they should check the Health and Human Services website to see what Medicare will cover, then call the billing manager and offer that amount. If they can pay cash up front, many providers will slash prices by as much as half, according to the Consumers Union. Also, employees should ask for a discount if they're undergoing multiple procedures — say, having their tonsils and adenoids removed. Insurance companies pay a reduced amount for each procedure after the first one, so employees should as well.
When it comes to lab and clinic expenses, employees should also be encouraged to shop around. Fees can vary widely among different labs and clinics. To compare prices, employees will need to know the CPT (Current Procedural Terminology) code. The American Medical Association (AMA) has an easy-to-use CPT search engine. Once they have the code, they can get price quotes from several providers.
Health Savings Accounts (HSAs) are one of the very best benefits of consumer driven healthcare. HSAs allow enrollees to use tax-advantaged funds on eligible medical, dental, and vision expenses. Unlike money saved to FSAs (flexible spending accounts), HSA funds carry over year-to-year in perpetuity. This also means that HSAs can be loaded with cash, stockpiled, and then used in retirement to help curb the cost of healthcare, when it’s likely to be more expensive. (Funds can also be used for non-medical expenses but may then lose their tax advantaged status.)
Offering HSAs is a good way to put real dollar amounts on the cost of medical services while providing a tax break for employees. If employees know how much things really cost (such as brand name prescriptions or unnecessary medical procedures), they may be more likely to switch to generic drugs, skip the procedure, or look into alternative methods of treating symptoms. Of course, the danger here is that people may also be likely to skip necessary medical procedures, so it's wise to watch out for that.
Both employers and employees alike can contribute to HSAs, so don’t underestimate the power of helping employees out in this manner. Contributions are tax deductible for employers, just as they are for employees, and employer contributions can even be tied to participatory wellness programs.
Obviously, some medical events can’t be avoided, but sometimes, their expense can be minimized and your broker can help you figure out where your group is overspending. For example, frequent ER visits are one of the more common areas of unnecessary expense. Modifying this behavior through a highly localized Urgent Care awareness campaign can save everyone money. When employees understand the cost differences and conveniences provided by Urgent Care Centers, they almost always make the switch. The barriers to behavior modification, outside of poor plan design, almost always come down to communication and education.
The cost of healthcare has increased exponentially in the past 30 years. As such, consumer driven health plans are most likely here to stay. Just as employers have worked tirelessly to manage rising healthcare costs, newly empowered employees are feeling the pinch as well. It therefore behooves every employer to help educate and inform their workforce on how to become savvy consumers of healthcare. When employees feel more educated and informed, they are more empowered to make better decisions. In turn, they will be healthier humans, which is good for everyone.
Remember that an employee benefits broker can be an invaluable asset during the transition from traditional health insurance to consumer driven healthcare. A talented broker should be able to offer you extensive guidance which it comes to plan design, communication, education, compliance, cost containment, workforce support and more. If you aren’t being provided with these services, give us a call.
What questions do you have about consumer driven healthcare? Leave us a comment below or contact us. We’re happy to provide answers!
The JP Griffin Group consults for discerning companies coast-to-coast, ranging in size from 10 to more than 30,000 employees. In addition to our Scottsdale, Arizona headquarters, we have bi coastal offices in Seattle, WA and Washington, DC.