3 Cost-Cutting Strategies Insurers Can Learn from Employers
2.Use outcome-based incentives instead of penalties. As the parent of a rambunctious 6-year old boy, I am very familiar with this strategy. I know, for example, that I have a better chance of getting him to make his bed if I promise him 10 minutes of playtime on the Wii rather than threatening to take it away if he doesn't do what I ask.
The "best performers" know this, too, and have data to back it up. A perfect example is tobacco-use status. According to the report, 42% of companies surveyed penalize smokers about $50 per month. Among the best performers, 51% use an incentive system, such as smoking cessation programs.
Furthermore, 40% of them also extend the incentive to spouses and dependents. Where's the reward? On the balance sheet and at home. The best performers saved more than $2,200 per employee when compared to low performing companies (those with 10.3% cost increases).
These are large firms; thousands of dollars in savings can turn into millions quickly depending on the number of workers employed. But board room members weren't the only ones saving money. Its employees saved, on average, $500 in premiums and $400 in point of care services. Get rid of the stick, and offer the carrot.
3. Use incentives and emerging payment models to increase quality of care. Health insurers are well aware of all the buzzwords in payment: "accountable care," "value-based purchasing," and "bundled payments," but so are employers who see insurance for their workers as a value proposition that needs to be solved today for the long-term.
The report's authors say survey responses point to employers interested in moving into the supply side of plan management. For example, 13% of the best performers currently contract directly with hospitals, physicians, and/or ACOs. By next year, that percentage is expected to grow to 31%.
It's among the top three sharpest increases in strategies the best performing employers say they plan on implementing by next year. The other two involve offering incentives to providers to increase quality (25%) or use a coordinate care approach (22%).
The report offers a lot of insight on employers and insurers, but these three things can affect how quickly a tipping point is reached in care, quality, and cost for both parties.
Jacqueline Fellows is an editor for HealthLeaders Media.
- CEO Exchange: Preparing for Population Health
- Advocate, NorthShore Deal Would Create 16-Hospital System
- 3 Strategies for Retaining Millennial Employees
- Better HCAHPS Scores Protect Revenue
- Power of price: In South FL and the nation, healthcare costs often are shrouded in secrecy
- Narrow Networks Cut Costs, Not Quality, Economists Say
- Hospital mergers may lead to higher prices
- CEO Exchange: Pressure is On to Partner, Drive Quality
- Healthcare data of 1 million NJ patients compromised since 2009