Opioid abuse. You’ve probably read lots of stories about it recently, but have you seen the stats? They’re alarming, to say the least: There has been a fourfold increase in opioid prescriptions from 1999 to 2010 and a fourfold surge in deaths due to overdose.
Opioids are medications that relieve pain, such as hydrocodone (e.g. Vicodin), oxycodone (e.g. OxyContin, Percocet), morphine (e.g. Kadian, Avinza), and codeine, as well as non-prescription drugs such as heroin. As a group they’re the third most commonly abused drugs after alcohol and marijuana, and they’re now responsible for killing more people than automobile accidents, according to the Substance Abuse and Mental Health Services Administration.
They have also been blamed for a decrease in life expectancy among certain groups of middle-aged Americans. Among self-insured employers, some estimates claim that 32% of opioid prescriptions are misused or abused, while Mercer data shows that opioid users 18 and older cost 5.5 times as much in total allowed medical and pharmacy costs compared to non-users.
The National Council on Alcohol and Drug Dependence reports that 70% of people using illicit drugs, including non-medical use of opioids, are employed -- and then there are all the employees whose work may suffer as a result of worrying about a loved one with an addiction. Among 18-25 year olds, 12% use opioids non-medically, as do 5% of those 26 and older. The CDC also reports that there is 6% utilization among those aged 12-17. Employees across the country are struggling with this disease -- diagnosed and undiagnosed, directly and indirectly.
Something needs to be done -- and all of us, including employers, can play a role in addressing this epidemic. You can help support those with addiction by training managers and supervisors to identify problems and referring employees to sources of help such as your EAP or Behavioral Health carrier. In addition, it’s important to develop communication tools for employee awareness efforts. And if your organization has a drug-testing program, check to see if the panel of substances tested for includes opioids.
Just as important is to prevent new cases. Review your medical, dental, and pharmacy benefit design to prevent the over-prescription of opioid medications. For example, the current recommendation is to limit prescriptions after procedures to seven days, which has been shown to decrease the development of new addictions. In addition, employers can ask their carriers or PBMs whether they flag members who are deemed high-risk for addiction, and if they follow up to ensure providers are consulting state Prescription Drug Monitoring Programs (PDMPs).
It’s also important to facilitate a successful return to work, by supporting the ongoing care needs of the employee as well as the families affected by addiction. And through careful monitoring of claims data, employers can look for red flags of addiction such as:
- Members obtaining large quantities of opioids
- Members prescribed narcotics by different doctors
- Members prescribed narcotics for more than 30 days
Prescription drug abuse is a serious medical issue, and should be treated as such. By taking action now, you can do right by your employees who may be suffering from addiction, while also doing your part to address a sensitive and complex issue plaguing our society.
Confronting issues around healthcare costs is a significant challenge facing today’s small- and medium-sized businesses. While you might think your size limits your options, that’s not necessarily the case.
In fact, whether or not any particular small- or medium-sized company can actually reduce its health insurance premiums while maintaining the same level of coverage depends on each entity's specific situation. But there are some general techniques that will apply to all. Here are four actionable approaches to controlling healthcare costs:
- Negotiate better
This may seem obvious. The proposal you receive for next year is not necessarily the carrier’s best and final offer. Sit down with your broker to develop a renewal, marketing and negotiation strategy. A well-planned approach will help you get the lowest possible cost and leverage everything that today’s competitive marketplace has to offer.
- Investigate turn-key health and benefits solutions
Don’t assume you have to manage everything within your company. Investigate offerings that provide a “turn-key solution” that includes more personalized health and benefits support. A benefits solution like Mercer Marketplace 365+ would take the stress out of healthcare for your employees, making them happier and healthier in more ways than one.
- Switch to individual plans
Although it’s not a common strategy, some businesses have considered an individual plan approach that eliminates the employer contribution and positions employees who qualify to take advantage of subsidies that could provide them with coverage at around $100 a month. Options for individuals exist on the public exchange as well as in the private market. Be sure to consider potential penalties under the ACA and any impact this approach may have on other important business objectives, such as the ability to attract and retain employees.
- Promote a “Culture of Health” within the office
Reward employees for taking care of themselves and living a healthy lifestyle by giving them tools to track fitness goals and introducing lifestyle initiatives. These incentives will also motivate employees to take advantage of the benefits they have, such as their annual check-up. Studies show that leaders who live and promote healthy lifestyles are successful at getting employees to do the same.
The key to controlling company healthcare costs lies in having a plan -- and putting it to work.
A new report from the Conference Board signals tough days ahead for employers. In the next 10-15 years, they project the demand for labor in the US will exceed supply. A labor shortage puts added pressure on organizations to retain existing employees – something that is already a top concern of human resources leaders. In a recent Human Resources Executive survey – What’s Keeping HR Up at Night? – respondents reported eroding levels of employee engagement as their #1 concern. Of the 12 strategies to boost employee engagement and retention that the survey asked about, only three showed an increase in usage: enhancing employee benefits, offering/enhancing wellness programs and increasing/improving leadership training. As the war for talent escalates, it will be increasingly important for benefits professionals to understand their organizations’ staffing projections and plans. This will allow them to respond with benefit and wellness offerings that aid in the recruitment and retention of employees in a tight labor market.
As college graduates face ever-mounting piles of student loan debt, innovative employers are looking at loan repayment programs as a way to attract and retain top young talent, according to this New York Times article. The average class of 2015 graduate with debt owes a little more than $35,000. We’re seeing millennials put off major life milestones, such as buying houses, getting married, and having kids, in order to pay back their loans. There are a number of employers considering student loan programs because they are looking at creating more attractive benefit offerings for millennials. We checked in with Mercer's Betsy Dill, who's quoted in the article. She reminded us that debt is not just a problem for young employees: “Employers need to consider the implications of offering support only for people with student debt, when close to half their baby boomers are struggling with debt as well, We think forward-looking employers will be looking for ways to offer financial wellness support across all of their demographics – not just millennials.”
We’ve written before about the role of onsite clinics in improving access to quality care, providing hard-to-beat convenience and increasing worker productivity. According to this Fortune article, it seems that quite a few of the magazine’s “100 Best Companies to Work For” would agree. More than 40 of the companies on this list have onsite clinics at their headquarters, and nine of them offer clinics at multiple locations. We’ve seen steady growth in offerings of primary care clinics over the past few years among employers with 5,000 or more employees – from 24% in 2013 to 31% in 2015, according to our National Survey of Employer-Sponsored Health Plans. An additional 14% of very large employers say they’re considering adding one in the next two years. While clinics have many benefits, employers need to remember that the cost of care received through onsite clinics is currently included in excise tax calculation. Additionally, employers that offer a high deductible plan will need to charge employees for visiting their clinic. While this is an important factor to weigh when considering a clinic, it isn’t an insurmountable problem by any means, and should not discourage employers from exploring whether an onsite clinic would enhance your program, be appreciated by your workforce, and further your business objectives.
Congratulations to Mercer’s Jacques Goulet, President of Retirement, Health, and Benefits, on receiving this year’s Maple Leaf Award of Distinction from the Canadian Association of New York (CANY)! A native of Shawinigan, Quebec, Jacques was recognized as a prominent business leader with strong ties to Canada and New York City, where he is currently based. Over the course of his 28-year career with Mercer, Jacques has shared with us his innovative ideas, his leadership, and his profound commitment to Mercer’s purpose as an organization: to make a positive difference in people’s lives. We are so proud that he has been recognized for his outstanding work – it is well-deserved!
Jacques was honored at CANY’s annual black-tie gala dinner, the Maple Leaf Ball, in New York’s Mandarin Oriental Hotel on Friday, March 11. Proceeds will support the CANY Foundation charities: the Wheelchair Sports Federation Sled Rangers, Ice Hockey in Harlem, the Terry Fox Run for Cancer Research, and Canada’s National Ballet School.
Yesterday may have been International Women’s Day, but employers should view every day as an opportunity to attract, retain, and promote women in the workplace. Mercer has an extensive body of research in this area, highlighted in our 2016 Global When Women Thrive report – the most comprehensive and predictive of its kind. “It has been a momentous year for the global women’s agenda with key voices – legislators, economists, businesses and academics – all calling for more action and more resolve around gender parity,” says Pat Milligan, Global Leader of Mercer’s When Women Thrive initiative, in this HR Dive article. “We continue to elevate our voices and the conversation, yet our research shows the pace at which we’re moving means that gender parity remains a long way off.” Employers need to look closely at what they’re doing to promote gender diversity, particularly in terms of involving men in the conversation and implementing robust pay equity analysis processes. An easy way for benefits professionals to support the cause is to offer retirement and financial education focused on women. Less than 10% of organizations offer this type of education despite proof that such practices drive future representation.
Onsite health clinics may not be a new strategy for providing convenient health care for employees, but a couple of recent articles spotlight employers that are using clinics to work towards medical cost management and productivity goals. St. Joseph Hoag Health in Orange County, CA, has been operating a clinic for only about a year, but they estimate that it has already saved around 2,300 hours of productivity. SAS, a large software analytics company, has had an onsite clinic in place since 1984 and has the historical data needed to quantify the clinic’s impact. They found that over a three-year period health plan claims up to $600 less for SAS clinic users. Key factors in determining whether an onsite clinic might be right for you include the number of employees at a given worksite and physical space and resources available for a clinic build-out. And the treatment of clinic operating costs for the purposes of the excise tax calculation remains unclear.
In a new survey from the International Foundation of Employee Benefit Plans, less than 20% of employers said they believe their employees have a high-level of understanding about their benefits. This is a disheartening statistic for HR professionals who work hard to communicate with employees about their benefits. But it indicates that traditional communication methods are no longer working. It’s time for employers to understand the generational differences of their workforce and meet employees where they are – in life and on communication platforms. If employers can unlock the key to increasing employee understanding, the value of their benefits should rise even higher.
Much of the pressure driving up pharmacy benefit cost comes from specialty drugs. While some new drugs represent important breakthroughs in the treatment of complex diseases, the spike in the specialty drug cost trend rightfully has employers looking for creative strategies to manage cost growth.
There are at least three areas to consider: Sourcing (getting the best price for the drug), site of care (getting the best price for administration, since many of these medications are infused), and clinical management (establishing best-practice rules for the circumstances under which a specific drug is administered).
Here are some of the simpler strategies to discuss with your carrier or PBM:
- Comprehensive site-of-care review. It may make sense to have some specialty drugs purchased through the medical plan rather than through the pharmacy plan; for example, oncology. In some cases, doctors can get these medications more cheaply than PBMs.
- Exclusive specialty. All specialty drugs are handled by one provider as a way to obtain better unit costs. However, this is not always the best option, as it limits flexibility.
- Specialty formulary. This strategy may be considered for drug classes where there is adequate competition, for example, four or more drugs with similar profiles.
- Clinical rules audit. Reviewing current clinical rules (usually from the PBM or carrier, if drug benefits are carved in) compared to best practices.
- Home health care. As part of a site-of-care review, consider the patient’s home as a venue for infused medication. This may require patient education to self-administer the medication, and is currently common in hemophilia and certain other disease states.
Larger employers may want to consider these more complex cost management approaches:
- Specialty carve-out. Investigate these new specialty-only PBMs (Acaria Health, Magellan and Diplomat Specialty Pharmacy). While they aren’t mainstream yet, specialty-only PBMs -- which address sourcing, site-of-care and clinical rules -- will get more attention in next few years as specialty drug costs continue to rise.
- Members with hemophilia may be able to access 340B pricing through Hemophilia Treatment Center. (The 340B Drug Discount Program is a federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices.)
- 340B pricing. While this is far from mainstream, a few employers have established relationships with a local hospital, ACO and/or contract pharmacy to get deeply discounted specialty drug pricing. Note that the 340B program has some complex rules regarding patient requirements to access the better pricing so this fact should be included in any review of this option.
Cost for specialty drugs will continue to rise for the foreseeable future, and none of these strategies is likely to solve the problem once and for all. But with specialty drug costs now squarely in the spotlight, we’re starting to test innovative new approaches to cost management, and learning more about the trade-offs between medical and specialty drug costs. In other words, it’s far too soon to throw in the towel.
We often hear about the gender pay gap, but it’s not every day that organizations devote as much attention to their gender benefits gap. According to Mercer’s provocative 2016 When Women Thrive global report, organizations can, and should, be doing more to offer benefits education programs that specifically cater to women. Currently, only 9% of corporations are monitoring savings behavior by gender, but as Mercer’s Brian Levine points out in this Employee Benefits News article, “Women live longer, are more likely to have breaks in service, save less and make less risky portfolio decisions, so providing guidance to that population on investment decisions” is key. Organizations that focus on educational activities geared toward women’s health and wealth management can boost their female representation at the professional level and above – and with current talent flows in North America bringing us virtually no closer to gender parity by 2025, taking a proactive approach like this is critical.
Now that W-2's are out, individual tax preparation is under way. 2015 was the first year Americans were required to have health insurance or pay a fine. With the delay of the ACA reporting requirements, many will not have the 1095 form – proof that they were insured – at the time they file their taxes. The IRS says everyone should go ahead and file, even if you do not have a form. Depending on your timing to provide the 1095 forms to your employees, now would be a good time to communicate with them about what to expect when they file their taxes – it could cut down on calls and e-mails.