Self-insured employers are motivated to reduce medical costs to achieve costs savings.
A growing percentage of small employers are self-insured, increasing by 65% between 2008 and 2010 according to a PricewaterhouseCoopers report. (80% of employers with 1,000 or more employees are already self-insured). Why the trend? To cut healthcare costs, of course. Rather than pay a monthly premium to an insurance company, employers are increasingly taking the risk and paying employees’ medical claims. The employer still uses deductibles or co-pays to share costs with employees and may purchase stop-loss insurance, but they avoid paying the insurance companies profit margin and other costs like state taxes that insurance companies pass on to the employer.
In 2010, I, along with colleagues from the University of Washington, published results from a study based on national survey data from 160,000 individuals showing that insured workers are not meeting recommendations for health behaviors. We reported that over three-quarters of the employed and insured population are not consuming adequate amounts of fruits and vegetables and almost that same proportion are not receiving recommended flu vaccinations.
Self-insured employers are very motivated to change such health behaviors for their employees in an effort to both lower healthcare costs and improve productivity. On their side, self-insured employers have access to a plethora of employee data—healthcare utilization, pharmaceutical, biometric, worker’s compensation, HRA—they can use to identify cost drivers and design insurance benefits and wellness programs tailored to their employee population.
Some technology opportunities that stand out include:
• Analytics. Assisting self-insured employers in organizing the various data sets and relating the data in the context of risks, cost drivers and utilization is valuable.
• Behavior change. Low cost, evidence-based solutions targeting high leverage behaviors like tobacco cessation and flu vaccination can improve employee health and deliver cost savings to employers. Newer behavior change technologies can be offered alongside or paired with traditional corporate wellness services offered by companies like Chicago-based LifeStart.
• Incentives. Solutions to engage and motivate employees can help. Self-insured employers can provide monetary incentives because they are the fiduciaries of their health plans.
• Communication devices and applications. Innovative wireless-based solutions and social networking tools are emerging that can help self-insured employers and their employees take better control of their healthcare and improve adherence. An example is Chicago-based Medic8 Manager’s Personal Caregiver iPhone and iPad App that helps remind people when to take their medications.
Self-insured employers desire health and wellness solutions to help them curb rising healthcare costs. Innovative technologies that assist employers in understanding and managing these costs can help move the needle.
(Post first appeared at chicagohealthtech.org)