High-Cost Medical Claims Solutions for Employers
High-Cost Medical Claims Solutions for Employers
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Self-insured, or self-funded plans, currently cover an estimated 94 million of the nation's 156 million employees. The 2020 Kaiser Family Foundation Survey of Employer Health Benefits reports that 67 percent of employed, insured workers are covered under self-insured, or self-funded, arrangements. Under these arrangements, the employer, n
Self-insured, or self-funded plans, currently cover an estimated 94 million of the nation's 156 million employees. The 2020 Kaiser Family Foundation Survey of Employer Health Benefits reports that 67 percent of employed, insured workers are covered under self-insured, or self-funded, arrangements. Under these arrangements, the employer, not an external insurer, directly bears the financial risk for the cost of employee health care.
"Self-funded employer groups already bear the risk for the increased costs of their health plans. The health plans that take on administrative services only (ASO) contracts should look for ways to increase their value to these organizations, not just encourage them to take on greater costs. The popularity of self-funding with large employ
"Self-funded employer groups already bear the risk for the increased costs of their health plans. The health plans that take on administrative services only (ASO) contracts should look for ways to increase their value to these organizations, not just encourage them to take on greater costs. The popularity of self-funding with large employers puts pressure on health plans to differentiate themselves, especially as enterprise employers are looking for new options."
[Forbes Technology Council; Sept 2020]
"A return-on-investment (ROI) mindset would lead employers to optimize where they spend resources related to the mix of the employee base. For example, effectively treating depression and anxiety could lead to a 4:1 return (that is, $4 back for every $1 spent) in improved employee health and productivity at work."
[McKinsey; "Innovating employee health: Time to break the mold;" Sept 2021]
In 2021, the average health insurance cost for employers was $16,253 annually, or 73% of the premium, to cover a family and $6,440, or 83% of the premium for an individual. These premiums for families and individuals have increased 22% over the last five years and 47% during the previous 10 years. [Kaiser Family Foundation; 2021]
Compared with high-income peer countries, the United States has a 46 to 50 percent higher disease burden rate for 20- to 40-year-old workers, and a 17 to 33 percent higher disease burden rate for those over 40 years old. [Innovating employee health: Time to break the mold?; McKinsey; Sept 2021]
Self-insured employer plans usually cover employees and their spouse/partners and dependents. Employers depend on their medical carriers and their administrative services to provide access to good medical care, pay an appropriate (and pre-specified) amount and respond to covered members as customers.
At the heart of employer health plans are employees on whom companies depend for business success. The relationship between health and productivity is strong, but complex. Direct costs of health-related absence and disability can be dwarfed by "presenteeism." The focus on wellness and wellbeing is shifting to employee engagement and performance.
Employer-provided health coverage is important for recruiting, but even more important for retention. A recent AHIP survey shows that: 56 percent of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job. 46 percent said health insurance was either the deciding factor or a positive influence in choosing their current job. The role that healthcare innovation can play to support this is considerable.
Rule of thumb: Larger employers tend to work with larger consultant organizations who charge by the hour and bring sophisticated resources and broad subject matter expertise. Smaller employers tend to work with brokers who earn commission from placing medical insurance business- but often include value-added services to those client relationships. Knowing the players and understanding the working dynamics (and how they may vary) is invaluable to successful growth in the self-insured employer marketplace.
Health care purchasing coalitions, executive roundtables, industry membership organizations are among those influencers who help employer decision-makers navigate the complex landscape. These influencers offer powerful potential for healthcare innovators looking to shape and showcase their solutions.
Employer-sponsored insurance covers almost 155 million people in the U.S.
It is estimated to be a $1 Trillion marketplace.
For every employer the business stakes around health outcomes, medical costs and access to medical care are extremely high.
RON LEOPOLD CONSULTING
Ronald S. Leopold, MD, MBA, MPH
Copyright © 2022 Ronald S. Leopold, MD, MBA, MPH - All Rights Reserved.
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