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Why Payers Like Defined Contribution Programs

Margaret Dick Tocknell, for HealthLeaders Media, September 6, 2013

BCBS's Brown says the buzz about private HIX and defined contribution plans has exploded over the past six to eight months as employers have become more aggressive in seeking out new ways to reduce their employee healthcare costs. He says Highmark's decision to expand from 100-member employer groups to 1,000-member groups simply reflects market demand.

More than 14% of the groups selecting defined contribution products are new to Highmark. Buy ups of ancillary products such as dental and vision to existing customers nearly doubled. Previously those products were not always available to small groups, Brown says.

But it is access to so-called "big data" that makes the strategic difference. "We get tons of information from the employees who are shopping on the platform," says Brown. Highmark also gathers information from surveys about the product selection and the employer contribution.

Recently Highmark revamped the platform's user experience based on survey feedback from administrators and employees. One change: adding an employee sign-in before reviewing products. Employees preferred to sign-in so they could save their work as they moved around the platform and then come back to it later. Decision support tools to help in product selection were also added.

The Highmark platform was developed by Seattle-based Array Health. Last month Highmark announced that it is expanding its strategic relationship with Array and investing in the company to enable "more businesses in more locations" to access its defined contribution products.


Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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