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.
- CMS Sets 2014 Pay Rates for Hospital Outpatient and Physician Services
- FDA hopes hospitals will switch to newly regulated pharmacies
- The 5 Biggest Healthcare Finance Trouble Spots
- Not-for-Profit Hospitals Find Opportunity Amid Uncertainty
- Nonprofit Hospital Outlook 'Negative' in 2014
- The Most Polarizing Topics in Healthcare IT
- Are ACOs Really Different from HMOs?
- How CPOE Will Make Healthcare Smarter
- Why You Should Involve Patients in Nursing Handoffs
- Rise of the Chief Strategy Officer