June 26, 2020

6 Employee Benefits Cost-Mitigation Strategies Organizations Are Implementing

List of 6 Benefits Cost-Mitigation Strategies.

Changes in the business climate, economy, regulatory environment and workforce demographics all create dynamics that affect employee benefits offerings. How exactly are employers responding to continually rising health care costs?

The six primary cost-mitigation strategies that employers are increasingly implementing nationwide are:

  1. Value-based care, utilizing alternative payment models, including accountable care organizations (ACOs) and clinically integrated networks that focus on tighter care coordination tactics in which the providers of care have a vested interest in both the clinical and cost outcomes and share in the savings created by more efficient health care utilization.
  2. High-performance but narrower networks focused on medical quality outcomes to determine which hospitals and physicians are included in the network. For infrequent, atypical and high-dollar procedures/conditions, a center of excellence (COE) program can be used to direct members to hospitals nationally regarded as the best in class for treatment of these services.

Are your health care offerings competitive? Check out this report to find out.

  1. Direct contracting and reference-based pricing (RBP) in which providers and employers agree on a defined rate for services, which is usually based on some multiple of Medicare, or the compensation is determined via negotiation based on the hospital’s areas of specialty and medical quality. This also will apply to domestic medical tourism and condition-specific carve-out programs, such as for dialysis.
  2. Adoption of direct primary care or worksite clinics to create better avenues for access and treatment and, more importantly, to develop steerage platforms to the appropriate site of care and invoke considerations regarding referrals to higher quality medical providers when specialty care, surgeries and hospitalizations are needed.
  3. Pharmaceutical procurement strategies that compete with traditional pharmacy purchasing models, such as the use of Rx tourism, international mail-order programs and advocacy programs for high-dollar medications. Obviously, Rx tourism and international mail-order programs are, for the most part, on hold due to the COVID-19 pandemic. However, employers will likely revisit these options when feasible.
  4. Defined control of J-coded medications and infusions to control large cost variances related to medication therapies that occur within a hospital setting.

In order to stay competitive in recruiting and retaining top talent, employers must balance cost-savings strategies such as these with making informed decisions regarding what benefits they will offer. An excellent place to start in making these decisions is to learn what other organizations in your area and industry are offering, which can help you identify your plan’s strengths and weaknesses and make adjustments accordingly.

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