Your Employee Health Plan: A Catalyst to Achieving Risk Capability

The healthcare industry is undergoing a radical transition, from a traditional, well-defined fee-for-service economy, to a nuanced system where value is defined by outcomes, not inputs. Most importantly, American healthcare is moving toward an environment where healthcare purchasers of every size will demand greater efficiency, quality, outcomes, transparency and access. They will demand Risk Capability.

INTRODUCTION

In this environment, there is a growing call for organizations to study their progress toward and needs related to managing at risk populations. Successful organizations understand how to prepare their healthcare delivery enterprise with capabilities to accept heighted levels of risk and reduce their total cost of care. Today, all employers – particularly those that are self-insured – are exposed to the rising cost and risk levels related to their employee health plan. For many, health plans left unmanaged erode margins and force trade-offs between an organization’s workforce and future growth potential.

CHALLENGE

Employer sponsored health insurance is a vital component of an organization’s benefit structure that demonstrates a commitment to the organization’s values, mission and the wellbeing of its people. Each year, employers pay a premium to cover expected claim expenses and often have limited insight into how their investment is performing and being managed.1 

Our experience tells us there are four primary forces that drive increases2 in health insurance costs:

1 Annual Spike in Premiums and Deductibles Outpacing Earnings
2 Lack of Management of Chronic and Costly Conditions
3 Rise in Burnout and Turnover
4 Lack of Value-Based Incentives and Models

Sources

  1. Note that many self-employed insurers may not pay a premium but rather budget for healthcare spending and pay the actuals from the budget.
  2. https://www.kff.org/health-costs/report/2020-employer-health-benefits-survey/

ABOUT THE AUTHORS

Laurajeanne Fligor
Director

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