Three Ways Employers Can Control Healthcare Costs Now
When it comes to controlling healthcare costs, it seems like large companies like Amazon, American Express and GM are at a distinct advantage. They can use their size to negotiate deals and discounts with providers or even open their own employee health clinics.
But if your organization has hundreds of employees rather than hundreds of thousands, there are still many options that allow you to control healthcare costs for your company and employees.
Most companies aren’t able to individually negotiate the deals that Amazon can – but by working with a consultant, you can achieve cost savings that will benefit your organization and help you retain and recruit top talent.
Where should you start? Here are three ways employers can leverage consultants to control healthcare costs.
1. Shop Carrier and Vendor Solutions
Having a consultant do an annual bid check is one of the best ways employers can reduce healthcare costs and ensure they get the best plans at the best price possible. Switching to a carrier or vendor offering more competitive rates and better plans will save employers money in the long run and improve the employee experience.
Additionally, periodic bid checks provide your consultant with the negotiating power that ensures you are getting market-competitive healthcare. Employers that aren’t doing regular bid checks with a consultant are likely not getting the best pricing and right plans for their organization.
2. Rethink Your Plan Design
Changing the design of the health plan your organization offers can also go a long way toward reducing overall healthcare spending. By analyzing your employee census and looking at the demographic profile of your workforce, you can structure plans that meet the needs of your employee population, considering factors such as age, diverse health needs and utilization patterns to maximize benefits and reduce costs.
For example, employees may have different healthcare needs based on their age or health status. Some younger employees might prefer a high-performance network plan with lower premiums. Offering lower cost plans as part of a larger strategy can save your company and your employees money while still ensuring their coverage needs are met. Companies can also benefit from the use of enhanced utilization tools to provide support for decisions around cost-effective plan designs. These tools analyze patterns of use, such as increased emergency room use, that may lead companies to incentivize lower-cost options like urgent care.
Aon’s proprietary Industry Targeted Benchmarks and Plan Design Change Perception Tools can also give you a competitive advantage by making sure your strategy aligns with industry standards.
3. Consider High-Performance Networks or Core and Buy-Up Plans
The most basic and easiest cost-saving option for employers is to include a high-performance network option. High-performance network plans include fewer options for care, but they can incentivize employees to seek higher quality and more efficient healthcare providers. These providers include centers of excellence or follow a value-based care model.
While employees in the past may have had concerns that high-performance networks provide lower quality care, many of these networks now include an anchor teaching hospital or center of excellence. Offering high-performance networks with tiered providers can also help address employee concerns about providers.
Core and buy-up plans are another excellent way to save. They allow employees to choose benefits that fit their needs and only pay for what they want. This plan design will generate savings for both the employer and the employee. Benefits such as dental and vision can easily be structured this way. In addition, offering voluntary benefits provides another layer of choice and protection for employees while not adding to the employer’s cost for benefits.
Better Healthcare Costs Are Within Reach
For most businesses, healthcare is tough to navigate. It can be confusing and overwhelming, especially given the market dynamics over the last decade, from the implementation of the ACA to the COVID-pandemic. But partnering with a consultant with deep expertise, unique insight and the right proprietary tools can help you feel confident in navigating this complex environment. Attracting and retaining top talent has never been more difficult or more vital. Make sure your benefits are helping you do just that.