The Benefits Continuum: Best Practices in Designing Your Benefits Portfolio. White Paper

Transcription

1 The Benefits Continuum: Best Practices in Designing Your Benefits Portfolio White Paper February 2013

2 As the architect of your company s benefits portfolio, how are you getting the most from your health care dollars? Table of Contents Executive Summary... 3 Introduction to The Benefits Continuum... 3 Phase 1: Introduce accountability... 5 Phase 2: Enable changes in behavior... 5 Phase 3: Motivate better choices Phase 4: Direct to the best providers... 6 Conclusion... 7 Footnotes... 7 The Benefits Continuum: Best Practices in Designing Your Benefits Portfolio White Paper Castlight 2

3 Executive Summary The Benefits Continuum is a strategic framework that can help benefits leaders like you decide how they can best achieve their employee health care goals. The framework is comprised of four actionable phases. Each phase is a series of benefits programs that employers can implement where and how they like, to optimize their benefits offerings. Introduction to The Benefits Continuum If you re an employer in today s health care market, you face a unique set of challenges. What kind of health plans will you offer? How will evolving health care policy affect our company? What benefits programs will employees accept? Despite the wide set of challenges, you and other employers throughout the US share two issues in common: skyrocketing health care costs and poor outcomes. When it comes to health care in the US, the saying You get what you pay for simply doesn t apply. The US currently ranks last against countries such as Australia, Canada, and Germany in key health care categories as quality, efficiency, and equal access to quality care 1. Each year, the US spends over $300 billion on health care costs that could have been avoided, including unnecessary and incorrect medical care. As the architect of your company s benefit portfolio, how are you getting the most from your health care dollars? US employers have a significant pain point in deciding how to engage employees in making their own health care decisions. Without the incentives, tools, and programs to make better decisions, employees may continue to seek care from high-cost, low-quality providers, or worse yet decide not to seek care at all. A sustainable solution requires people to change the way they consume health care. One way to begin such a change is to follow the best practices detailed on The Benefits Continuum. The Benefits Continuum aims to change the way consumers interact with health care and wellness programs. By deploying benefit designs, educational tools, and rewards-based programs in a planned and deliberate way, you can deliver better employee health care and reduce company spending at the same time. The Benefits Continuum: Best Practices in Designing Your Benefits Portfolio White Paper Castlight 3

4 Phase 1 Phase 2 Phase 3 Phase 4 Enablement Motivation Directives Accountability Figure 1: The Benefits Continuum Phase Actions Sample programs Phase 1: Introduce accountability Phase 2: Enable changes in behavior Phase 3: Motivate better choices Phase 4: Direct to the best providers Present programs and plans that help employees take control of their health care. Give employees tools to save on and shop for their health care. Provide incentives to help employees choose the most value-oriented care. Introduce programs that reduce overall costs for your company. Consumer-directed health plans (CDHPs), defined contribution Medical shopping tools, pharmacy shopping tools Narrow provider networks, centers of excellence, second-opinion programs, incentive programs, rewards programs Advanced plan designs, custom networks, onsite clinics, pre-authorization programs, reference-based pricing, step therapy, utilization management Table 1: The Four Phases of the Benefits Continuum The Benefits Continuum: Best Practices in Designing Your Benefits Portfolio White Paper Castlight 4

5 By deploying benefit designs, educational tools, and rewardsbased programs in a planned and deliberate way, you can deliver better employee health care and reduce company spending at the same time. Phase 1: Introduce accountability The first step in developing a successful benefits program is to introduce ways for your employees to become accountable for their own health care. Sample Programs Consumer-directed health plans (CDHPs), defined contribution plans Benefits to employees Cost sharing plans make employees better health care consumers by giving them responsibility and control over their own health care spend. As a result, your employees may save not only by having lower premiums, but may also experience lower out-of-pocket costs than with a traditional PPO. Benefits to employers Cost sharing plans not only help relieve employers from shouldering rising health care costs, but they also nudge employees toward assuming more responsibility for their health care choices. By building this culture of accountability, your employees will be more likely to participate in any future programs that you roll out as a part of your benefits portfolio. Phase 2: Enable changes in behavior If you ve implemented programs in Phase 1, your employees are already on the hook and listening. Next, provide them with the tools to make informed decisions: cost and quality information, educational content, and plan design information. These tools will help them both save on and shop for health care services. Sample Programs Medical shopping tools, pharmacy shopping tools Benefits to employees Shopping tools not only give employees a better understanding of the huge variations in health care prices and quality on the market, but also the ability to find high-quality, high-value care. Benefits to employers Your employees now have the means to take real action. You ll begin to see savings that come from reducing variation in provider costs. And building the habit of know before you go helps to build a culture at your company that fosters informed health care decision-making. The Benefits Continuum: Best Practices in Designing Your Benefits Portfolio White Paper Castlight 5

6 Phase 3: Motivate better choices We ve all heard the term right care, right place. But finding the best place to get care isn t always easy, even with all the information available through cost and quality estimators. Help your employees make more frequent value-oriented health care choices by identifying and designating high-value providers for them. Programs Narrow provider networks, centers of excellence, second-opinion programs, incentive programs, rewards programs Benefit to employees Employees can quickly identify the best providers, and shop for high-value care especially for complex services, such as surgical procedures, where there are many variables to consider. Benefit to employers By motivating employees to make better choices, you ll be able to reduce the staggering costs associated with a poor diagnosis or low quality in-patient care. Variability in both the cost and the quality of care for these complex procedures will decrease, leading to healthier, more productive employees while preserving your bottom line. Phase 4: Direct to the best providers Often times, the best way to encourage a change in behavior is to enforce it. Directing your employees towards the most affordable providers ensures that they re getting the best-value care, while you benefit from maximum savings to your bottom line. Programs Advanced plan designs, custom networks, onsite clinics, pre-authorization programs, reference-based pricing, step therapy, utilization management Benefit to employees Directing employees to specific providers can be tricky, and in many company cultures, a difficult sell. But by designing a program that directs employees to the most cost-efficient providers while still providing choice, employees will benefit from a direct path to the most value-oriented providers saving them money and guaranteeing high quality care. Benefit to employers By insisting that your employees stick to a certain set of pre-designated providers for specific types of services, your company can reap guaranteed cost-savings without risking the health, well-being and choice of your employees. The Benefits Continuum: Best Practices in Designing Your Benefits Portfolio White Paper Castlight 6

7 Conclusion The Benefits Continuum s comprehensive, four-phase approach allows companies to do everything from providing a wealth of actionable health information to developing their own health care delivery systems. Ultimately, if you can involve your employees in taking responsibility for their health care choices, your benefits portfolio will generate results that are greater than the sum of its individual programs. The result: lower health care costs and better health care outcomes for everyone. Footnotes 1. U.S. Ranks Last Among Seven Countries on Health System Performance Based on Measures of Quality, Efficiency, Access, Equity and Healthy Lives, The Commonwealth Fund, Jun/US -Ranks-Last-Among-Seven-Countries.aspx (accessed June 25, 2012). The Benefits Continuum: Best Practices in Designing Your Benefits Portfolio White Paper Castlight 7

8 About Castlight Health Castlight Health enables employers, their employees, and health plans to take control of health care costs and improve care. Named #1 on The Wall Street Journal s list of The Top 50 Venture-Backed Companies for 2011 and one of Dow Jones 50 Most Investment- Worthy Technology Start-Ups, Castlight Health helps the country s self-insured employers and health plans empower consumers to shop for health care. Castlight Health is headquartered in San Francisco and backed by prominent investors including Allen & Company, Cleveland Clinic, Maverick Capital, Morgan Stanley Investment Management, Oak Investment Partners, Redmile Group, T. Rowe Price, U.S. Venture Partners, Venrock, Wellcome Trust, and two unnamed mutual funds. For more information, please visit our web site at or call (415) Castlight Health, Inc. San Francisco, CA (415) info@castlighthealth.com Castlight Health All Rights Reserved. WP-005-A-Continuum