Here’s an employee advocating for her own health: Before a medical appointment, she checks her health insurance to make sure the visit is covered. During the visit, she takes notes. Before the doctor writes the prescription, she asks, “Are there any generics?”
If more people had taken just that last step to use generic medications, consumers and employers could have possibly saved $25 billion -- yes, that’s billion with a B -- in out-of-pocket expenses between 2010 and 2012, the Journal of Internal Medicine reported in June 2016.
Persuading employees to be their own health advocates is a win-win-win for the employees’ health, their productivity, and the employer’s health care costs. Here are three steps to turn your employees into advocates for their own health:
- Tell employees they’re protecting themselves.
The physician may take the lead in providing medical services, but healthcare is ultimately a team sport. Because of the high potential for medical errors, patients are best positioned to play offense by asking a lot of questions and clarifying communications by all parties involved.
Medical errors may lead to serious or fatal events in 80,000 to 160,000 people per year, according to an April 2013 review of 25 years of medical malpractice claims by researchers at Johns Hopkins University. The most common errors are missed, incorrect, or delayed diagnoses.
The study underscores the importance of patients speaking up. Furthermore, seeking a second opinion results in revised diagnoses in 39% of cases, according to Advance Medical, a firm that helps patients obtain expert medical opinions.
- Point your employees to technology.
The palette of digital tools to empower employees to be their own health advocates is growing. Here are two:
About 30% of employers are encouraging the use of mobile health apps to help employees become more proactive about their health, according to Mercer’s 2015 National Survey of Employer Sponsored Health Plans. For those with chronic conditions, some apps could save up to $3,000 per patient each year, reported Health IT Outcomes in September 2014.
These tools pull back the curtain on healthcare pricing by comparing the price of specific procedures across providers in a given market. Given the wide range of prices charged for even common diagnostic services like xrays and MRIs, finding a lower-cost provider can save employees substantial out-of-pocket cost.
- Offer a “script.”
Many patients are murky about what to ask their doctors. However, questions like “What are all of my options?” can trigger alternatives that save money and have better outcomes.
The Agency for Healthcare Research and Quality lists 10 questions that can spark discussions between employees and their physicians. Consumer Reports even offers videos and brochures to help patients speak up about unnecessary tests and treatments.
Resources like these can teach your employees that self-advocacy is not only encouraged, but it’s also the key to value in healthcare -- managing cost while getting the best care.
Proposed IRS regulations address several Affordable Care Act (ACA) reporting issues for group health plan sponsors and other providers of minimum essential coverage (MEC). The proposals give more detail on MEC providers' obligations to request covered individuals' taxpayer identification numbers (TINs), explain when supplemental MEC doesn't need to be reported, and address the use of truncated TINs, among other things. Employers that sponsor self-funded health coverage and have MEC reporting responsibilities will want to review the proposed rules, particularly the provisions on TIN solicitations.
New Health and Human Services (HHS) FAQs offer guidance on the non-English taglines required under final rules implementing Section 1557 of the ACA. Employers and employer-sponsored group health plans covered by the rules -- which appear to include most hospitals and health systems, as well as entities receiving retiree drug subsidy payments from HHS -- must comply with notice and tagline requirements by Oct. 16, 2016.
A federal court in Wisconsin has ruled that an employer may not rely on the Americans with Disabilities Act (ADA) safe harbor for bona fide benefit plans to justify incentives under its wellness program. But the court still decided the wellness program met the ADA exception for voluntary medical exams, even though employees who declined to participate in a health risk assessment had to pay the full cost of their health coverage. This is the first ruling to find the ADA safe harbor for bona fide benefit plans does not apply to wellness programs under the final Equal Employment Opportunity Commission rules. The court did not apply the 30% limit on incentives in the EEOC rules as it concluded that component of the rule does not apply retroactively (the case involved incentives offered in 2009).
Moving from an employer-sponsored plan to a Medicare plan does not have to be complicated. Money magazine talked with Mercer’s Kristin Parker and came up with five tips for retirees. A few of them raise interesting considerations for those about to retire that could result in waiting for Medicare coverage to get treatment.
- There is no family plan in Medicare. So if you and your spouse have different medical and prescription drug needs, you can each enroll in the plan that is best for you.
- Cap on out-of-pocket costs isn’t automatic. Original Medicare pays 80% of covered expenses, with no cap on what you might have to pay. Medigap and Medicare Advantage policies have out-of-pocket safeguards. It is important to understand that component of the Medicare supplement policy.
- Be strategic in scheduling some procedures. Those about to retire should compare out-of-pocket costs for a needed procedure under employer coverage versus Medicare. You may fare better with Medicare’s hospitalization coverage, for example, than with your current commercial plan.
- Wellness features may be different. Medicare’s programs tend to offer more in-person care from health professionals, while commercial programs often depend on telephone advice services.
- Research may help limit drug costs under Medicare. Most people can use a Medicare tool to compare the plans offered where they live to find the best fit for individual needs. Doing your Part D homework might provide better and cheaper coverage than through your employer plan.
Changing medical insurance upon retirement is a big deal to retirees. Employers who are looking to ease the transition for retirees can direct retirees to a resource to help them consider their options. Fifteen percent of employers contract with a retiree exchange to provide personalized support to Medicare eligible retirees. In addition, the States have established Senior Health Insurance Information Programs (SHIIP) to help seniors. Educational tips and personalized support can go a long way to helping a new retiree feel confident about their healthcare choices and decisions.
Early results from a Mercer survey made headlines this week with the news that employers are projecting that per-employee health benefit cost will rise by an average of 4% next year after they make planned changes. That’s in line with the moderate cost increases we’ve been seeing over the past few years. What was more eye-opening was finding that underlying cost growth -- the change in cost employers would see if they made no changes -- has slowed to just 5.5%. That’s a gap of just 1.5 percentage points -- the smallest we’ve seen yet.
What does that mean? For one thing, it suggests that plan members might not see major increases in deductibles and out-of-pocket maximums. Employers have been pretty aggressive with cost shifting since the ACA was passed six years ago, and many feel they have gone as far as they want to go for now. The initial plan design changes required by the ACA added cost, driving up deductibles and out-of-pocket maximums as employers sought to absorb the increases. Since then, employers have been working to ensure their future costs stay below the threshold that would trigger the 40% excise tax.
The new survey results suggest these efforts are working to hold down underlying cost growth. That, along with the delay in the excise tax implementation date (and the potential for repeal), has given employers some breathing room. In 2017 we can expect to see them continue to nudge workers to move to lower-cost plan options. That nudge will likely take the form of a bigger difference in the employee contribution or maybe a little more funding in a health savings account. Most employers remain reluctant to offer a high-deductible plan as their only plan, but they have made progress in getting people to move to them.
You can find the press release with the preliminary survey findings here. Full survey results will be released later this year.
First, let’s put public exchange enrollment in perspective. It’s a relatively small piece of the pie, although you wouldn’t know it from the amount of attention it gets. In a Wall Street Journal article, Drew Altman reminds us “about 11 million people are enrolled in the marketplaces. More than 13 times that many, around 150 million, have coverage through employers, and there are 66 million people in Medicaid and 55 million in Medicare. The marketplaces are an important part of Obamacare. However, more uninsured people have been covered by Medicaid expansions than in the marketplaces, even though 19 states have not expanded Medicaid. Millions of young adults have been covered on their parents’ employer plans.” Another important point: 24 million Americans still do not have coverage, a number that would be smaller if all states had expanded Medicaid.
Here’s my take on what’s going on in the public exchanges -- and how it may affect employers.
- The Risk Pool is still risky. It was expected that the first people to enroll in the public plans would be those previously uninsured and in need of care -- and hence, more costly. Analysis done by CMS documents very little change in the per member per month medical cost from 2014 to 2015. While it may appear the risk pool is stable, the bad news is that it is not getting better. The expectation was that the risk pool would improve over the years as healthier people sign up. So far, that hasn’t been the case. The “young invincibles” are still not signing up, likely because the individual mandate penalty is still considerably lower than the cost of coverage
- Big-name carriers are losing money and leaving the market. To be sure, some regional players are entering the market, but overall it appears that fewer insurers will participate in the marketplaces in 2017. That means less competition among those that remain and thus less downward pressure on costs. As the WSJ article points out, affordability is very important in the individual market. Those not relying on a government subsidy may find more choices on the “off exchange” individual market. There are also implications for employers: cost shifting to group plans. When carriers lose money in one market segment, they try to make it up where they can.
- Estimates for premium cost increases for 2017 now range from 11% to 23%. A person enrolled in the exchange this year who is looking to minimize their cost increase in 2017 would need to switch to a lower cost plan -- and then would still likely see an 11% premium increase, according to a McKinsey analysis of 18 state exchanges and the District of Columbia. The situation could be even worse in the other states that have not yet filed their premiums for next year. Blue Cross Blue Shield has requested a 62 percent increase for next year in Tennessee and an average 65 percent increase in Arizona. See #1 above for why insurers are raising rates so sharply.
- Plans with limited provider networks have been popular. The reward for agreeing to a limited network of providers is a lower price tag for the plan. The downside is that members may have to change doctors, which is also the case when employers implement a narrow network plan. But if most plans on the exchange are narrow network plans, it becomes a less attractive option for early retirees, because the longer you have had a physician relationship -- and/or the greater your health care needs -- the more important those relationships are.
- Satisfaction is high among those previously uninsured; not so for those coming to the exchange from employer plans. Over time, exchange plans have begun to look very much like Medicaid plans, but with higher cost sharing. The impact of higher cost-sharing is mitigated by federal subsidies for much of the population with exchange coverage, which may be why they are generally satisfied with their coverage despite limited plan options and limited provider choices. But in most states, a relatively small number of individuals are willing to pay the full cost of the coverage that’s available on the exchange.
This last item -- on satisfaction -- is important. The exchanges are new and have real problems that need to be addressed through some policy changes and greater enrollment. (Policymakers might want to study how employers, through a lot of hard work, have stabilized cost increases at about 4% over the past five years.) As the satisfaction data shows, the exchanges are clearly filling a critical unmet need for Americans who previously lacked access to decent coverage. But so far, they are not delivering an acceptable alternative to employer-sponsored coverage. Unless that changes, they will always play a limited role in the U.S. healthcare system.
Annual cost-sharing limits for nongrandfathered group health plans would increase to $7,350 for individuals and $14,700 for families in 2018, under a recent CMS proposal. This marks a 2.8% increase from the 2017 limits, which cap out-of-pocket costs for in-network covered essential health benefits under nongrandfathered group health plans at $7,150 for self-only coverage and $14,300 for broader coverage.
Applying the same premium adjustment percentage to employer shared-responsibility assessments, the play-or-pay assessment for not offering coverage would increase to $2,320, while the assessment for offering coverage that is unaffordable or lacks minimum value would increase to $3,480 for 2018.
The Department of Health and Human Services' Office for Civil Rights (OCR) has launched an initiative to more widely investigate HIPAA breaches affecting fewer than 500 individuals. Historically, investigations have focused on breaches involving protected health information (PHI) of 500 or more individuals, but OCR now intends to shift more attention to the root causes of smaller breaches. OCR believes breach investigations allow it to better understand industry-wide compliance problems as well as compel corrections for entity-specific deficiencies.
Employers are grappling with the escalating cost of healthcare benefits. HR and finance leaders are adapting -- as are employees across the nation -- to a ‘new normal’ of narrow networks and high deductible plans. Basic coverage is increasingly augmented by voluntary benefits to meet the varied needs of employees and their families. During this ongoing transition, employees are being asked to more actively participate in the enrollment process.
This new employee empowerment shifts more responsibility of choice to the employee, who is trying to make vital health care decisions, but who, surveys confirm, feels ill equipped, alone, and confused about what the best decisions may be. So what is the way forward?
First, some surprising numbers: According to a 2015 survey by the Kaiser Foundation, nearly two-thirds of American adults say it’s difficult to find out what medical care will cost. Despite that, a mere 3% actually shopped for price among doctors and just 2% for hospitals. In fact, 57% of insured Americans are unaware that physicians charge different prices for the same care, according to Public Agenda.org.
The picture improves when we look at individuals who have easy access to information. A recent study published in the Journal of the American Medical Association (JAMA; June, 2016) found that use of a price transparency tool reached 10% of the 149,000 employees who were offered one.
Interestingly, a majority of Americans do not equate price with the quality of care. The Public Agenda results showed 71% of insured Americans say higher prices don’t necessarily deliver better quality care, while 63% conclude that lower prices are not an indicator of lower quality care. “Many may be ready to choose less expensive care. Together, these findings suggest that Americans are open to looking for better-value care,” summarized the non-profit, public issues think tank.
That’s good news as the focus for employers continues to shift toward providing employees with the tools they need to make informed decisions about their healthcare. So here are two questions to ask as organizations gear up for 2017 and beyond: Do your employees have access to good information about the cost and quality of healthcare services in their markets? And is your health and benefits platform an inviting place for them to go to find this and other future-ready benefits solutions?
Open enrollment season is just around the corner, and HR professionals at companies of all sizes should be preparing to share benefit details with their employees as part of their 2017 enrollment process. Questions and some confusion are inevitable, but there are ways to make sure open enrollment goes smoothly:
- Put together a cohesive package
Work with your provider or vendor partner to create a package detailing the benefits available to eligible employees, so they have just one place to look for all the information they need. It should include summary sheets, pricing, how to use the benefits, and enrollment instructions and deadlines.
- Be clear
Communication is essential to engage employees and ensure they understand the benefits and their options. Even if plans have not changed from the previous year, new employees will be accessing benefits for the first time and other employees’ family situations may have changed. Avoid the temptation to provide communication that is too technical and granular. Provide short, bite-sized pieces of information and offer ways to find more detail if an employee needs it.
- Test systems
Make sure your online enrollment system works. Testing it ahead of time prevents problems later. It’s better to get input on whether the system is easy to use and navigate before open enrollment than during it.
- Set up meetings and align resources
Regardless of all of the preparation and communication, employees are going to have questions. Set up times with your provider or vendor partner for employees to ask questions about the coverage and learn what options may work best for them. Provide your partners with resources and guidance they need to help you get your messages across in a clear and consistent manner.
- Highlight the value
Since benefits packages are part of employees’ total compensation, it is important that they understand the value they get from it. The open enrollment process is a good opportunity to convey the organization's total benefit value -- especially the hidden dollars being contributed towards benefits like life insurance and retirement plans.
Follow those five steps and you’re likely to have a solid open enrollment. To take it to the next level, consider these:
Go mobile: Introduce mobile or add more mobile options into your enrollment communications. These can be simple text messages to communicate enrollment dates or more involved interactive, mobile-friendly videos to educate employees.
Be concise: Provide clear, simple descriptions along with links to get more detailed information. Charts and infographics are a visually appealing way to convey information without making it appear overwhelming. Provide FAQs and have other resources available to respond to employees’ questions.
Be compliant, but not boring: The Affordable Care Act (ACA) is complicated and there are compliant-based communications like Medicare Part D enrollment information that must be distributed in a timely fashion. While these are important to share, they can be overwhelming so be sure they are not the focus of your communications.
As discussed in an earlier post, the EpiPen controversy has put issues surrounding drug pricing very much in the public view. But while ensuring the affordability of life-saving pharmaceutical products deserves attention, it’s a complicated issue with many stakeholders. There is little government guidance for employers and their vendors on benefit design, such as which drugs to include on high-deductible health plan preventive drug lists so that they bypass the deductible. While adding the EpiPen might seem like an obvious step, there are many drugs that fall into the gray area between prevention and treatment, and for any individual employer to try to draw that line could put them at risk. More guidance from the government would help in the short-term, but ultimately the affordability problem will only be solved by addressing underlying drug prices.
Over the past few years, there have been some short-lived alternatives to the EpiPen, but the only one currently available is an authorized generic for Adrenaclick, which may not be significantly cheaper than EpiPen and is in limited supply. While we’re already seeing activity among other drug manufacturers looking to get a competing product on the market, it will take some time. Mylan’s generic version of the EpiPen, however, will likely be available within a few weeks.
Here are some questions to discuss with your PBM or health plan now, to ensure your members have the access they need to this product and you’re controlling spending to the extent possible.
- What is the status of EpiPen and the authorized generic of Adrenaclick on the formulary? This is important because formulary status can determine drug coverage, the amount of patient contribution, and what manufacturer rebates might be obtained.
- How are any earned drug rebates being accounted? Rebates from the drug manufacturer may be one critical aspect of how to recoup some of the plan sponsor’s expenditures, so the primary payers should ensure those rebates are completely flowing back to them.
- Is EpiPen on an inflation protection program? Such protection strategies are a growing trend in managing drug expenditures and they look to ensure that the pharmaceutical manufacturer have some type of price protection or cap on how much they can increase their pricing. Unfortunately, this type of pricing protection may only be associated with increasing the rebates to keep pace with the ingredient price increases; however, it may offer some relief to plan sponsors.
- Is a generic interchange available for EpiPen? For now, the answer is mostly no, but this will be an option to consider once Mylan’s generic version is actually available.
- Will the generic price points be better for employees than the negotiated brand price? Though generics traditionally are the lowest-cost option, if the generic does not offer a significantly lower price, the plan sponsor should explore whether the branded version, net of the rebate, is actually a lower-cost option.
- Are there programs to manage the quantities being dispensed? Such strategies are often applied to ensure patients are not stockpiling large quantities of a medications.
- Are there ways to better account for the drug manufacturer couponing efforts? As the drug manufacturers have been providing more coupons to cover the cost of their products, plan sponsors continue to struggle with how to account for copays patients actually do not pay because, for example, they are applied to the deductible. Although these coupon programs traditionally only benefit the patient, plan sponsors have begun to consider how they might benefit from this type of manufacturer funding, as they still pick up most of the cost for most drug therapies.
Finally, as you monitor availability and price, you may want to review employee communications as well. You may want to consider providing educational materials that provide resources for employees that need help with the cost of EpiPen. And, if plan members can save money by asking a physician to prescribe a generic as availability grows, that’s a message worth reinforcing.
Every time a big company makes the leap to a private exchange, the industry pays close attention – especially Mercer’s own Sharon Cunninghis, North American Health & Benefits Leader. In this Human Resource Executive article, Sharon shares her thoughts on private exchange trends and opportunities, including best practices for employers who are making the switch. Her advice: “Help people understand the new benefits program, how it differs from what was in place previously, the added advantages of the new program and available support services,” she says. “Secondly, make sure that there’s a good, solid project plan from an implementation perspective – technology, new administrative processes and tools.” Sharon goes on to explain why, ultimately, health and benefits solutions of the future, Mercer Marketplace 365 in particular, will be seen as a “true healthcare destination” – a comprehensive platform that goes above and beyond today’s typical private exchange, serving as a resource not just at open enrollment, but throughout the year. With 6% of large employers either already using a private exchange or planning on it for 2017 – and an additional 27% considering adoption within 5 years – this is a trend to watch.
Unless you’ve spent the last few weeks vacationing on an internet-free tropical island or remote mountain-top (if so, lucky you!), you’ve read something about the controversy surrounding the EpiPen, the severe-allergy drug injector sold by the pharmaceutical company Mylan. Since 2007, when Mylan acquired the EpiPen, the list price has risen from about $100 for a two-pack to about $600. There are virtually no alternatives on the market, and the medication is potentially life-saving – in other words, not optional. A grassroots social-media campaign, driven largely by parents of children with food allergies, pushed Mylan to offer a $300 “savings card” to commercially insured patients to reduce their out-of-pocket costs and to broaden the eligibility for uninsured patients to receive free EpiPens. What they didn’t do was reduce the list price for the drug, and the barrage of negative press continued, affecting Mylan’s stock price. The company responded by announcing they would introduce their own generic version of the product in a few weeks, at half the price. It will be the exact same product as brand-name version – which the company will continue to sell for the full price. Although drug companies have introduced generic versions alongside their own brand-name drugs to compete with other generics, it doesn’t appear that another generic epinephrine auto injector will be available in the short-term.
Although this move may take heat off the company, the reason Mylan didn’t just reduce the price of the brand-name drug is because they hope and expect that sales of the brand-name version will continue – because (as this New York Times article suggests) some doctors will keep writing prescriptions for it by name, out of habit; because pharmacists will have a financial incentive to sell the more expensive, brand-name version; and because consumers with the $300 savings card might get the brand-name version for free but have a small co-payment for the generic version. On the other hand, some PBMs and carriers may have negotiated prices for the brand-name that are lower than the generic price! Employers will need to talk to their PBM or health plans to understand the current pricing structure and how, now that the target has moved and moved again, to get the best deal for their employees and their organization.
This story shines a spotlight on the urgent need for regulation to address pharmaceutical price-gouging and the extreme variation in prices paid by different purchasers for the same drug. On the defensive, Mylan’s CEO called out high-deductible plans as the real culprit; in fact, they exposed unfair price increases that might otherwise have gone unnoticed, as they do in so many cases. But the EpiPen story also highlights a problem with consumerism: you can’t be a smart shopper if there is no alternative to a product that your life, or your child’s life, may depend on.
When employers are working on strategies to manage health benefit cost, behavioral health benefits aren’t often top of mind. After all, only about 4% of claims are related to treatment for behavioral health problems. But what’s missing from that picture are claims for comorbid conditions – other health problems that go along with the mental illness or behavioral health issues. According to one analysis, together these account for 22% of total medical spend. 
In other words, behavioral and medical health problems very often go hand in hand. One study found that patients with depression visited their primary care doctor nearly twice as often as patients without depression in given year (5.3 visits compared to 2.9 visits, respectively).  That’s why prevention, early diagnosis and effective treatment of behavioral health issues could have a big impact on total medical spending. It’s also estimated that 24% of patients with chronic medical conditions have undiagnosed depression. Diagnosing and treating the depression might result in improved medical health.
There is also the indirect cost of productivity losses to consider. One study estimates that productivity loss related to behavioral health issues amounts to $2,025 per employee per year.  The growing problem of opioid addiction is a contributor. It’s definitely a workplace problem: 70% of people using illicit drugs, including non-medical uses of opioids, are employed. And it’s not just employees, but their dependent children that factor into the equation. With 12% of 18–25 year olds reporting that they use opioids for non-medical reasons, adult dependent substance abuse is driving medical costs for employers. And substance abuse is impacting your youngest members as well; 6% of 12–17 year olds report using opioids non-medically.  Between the direct (medical) and indirect (lost productivity) cost, opioid abuse could be costing employers as much as $8 billion per year. 
The purpose of this post was to get your attention! If it worked, now check out Sandra Kuhn’s post about what you can go to support better behavioral health in your organization.
 Castlight book of business and clinical review and indirect costs = $2,025 PEPY. 20% of $10,128 PEPY, based on Edington DW, Burton WN. Health and productivity due to behavioral health based on analysis from Castlight Clinical Team.
 Luber MP, Hollenberg JP, Williams-Russo P, DiDomenico TN, Meyers BS, Alexopoulos GS, Charlson ME. Diagnosis, treatment, comorbidity, and resource utilization of depressed patients in a general medical practice. Int J Psychiatry Med. 2000;30(1):1-13.
 Melek S, Norris D. Chronic Conditions and Comorbid Psychological Disorders. Seattle: Milliman, 2008. The National Council on Alcohol and Drug Dependence.