BY KERI DIXON
HOSPITALS AND HEALTH SYSTEMS provide care for the sick and injured, but they’re also employers—some of which are quite large, operating with thousands of employees. As such, they also need health coverage for their own staff.
For brokers, this represents a significant opportunity. In California, there are approximately 400 hospital and health systems bringing in well over $500 billion in revenue. Across the nation, there are more than 6,000 hospitals and health systems with revenues exceeding $3 trillion.
Similar to other types of employers, hospitals and health systems want to provide their employees with a competitive health benefits package, while at the same time controlling their health spend, fostering satisfaction among members, and improving future plan performance.
Due to the nature of these organizations—that they’re directly involved in the provision of care—they have unique needs around their plan design. Brokers should become acquainted with these requirements in order to better serve this market with appropriate programs and solutions.
1. DOMESTIC NETWORK: PART OF A MULTI-TIERED APPROACH
Unlike other types of employers, hospitals and health systems have their own physicians, clinical staff and facilities. As such, they often want to form their own domestic network. By promoting utilization of these domestic providers, hospitals and health systems can save significant costs and can better manage the health of their own employees. In addition, payments made on employee health services then go to supporting their own organization rather than a competitor.
However, because hospitals and health systems want to offer their employees a broad selection and choice of providers, they will usually offer their own domestic network as part of a multi-tiered approach. This allows employees the option to seek care outside the domestic network, as long as they’re willing to pay a higher tier-2 rate. This type of plan design—along with a strategically structured network, financial incentives, and member education—can steer a majority of members, as much as 80%, into the domestic network.
2. CUSTOMIZED REIMBURSEMENT
Hospitals and health systems also want the flexibility to establish their own domestic reimbursement model. This allows them to have more control over the costs of their plan and the amount they pay their internal providers. The plan administrator should be able to coordinate a variety of payment methods, with the most common being a percentage of billed charges.
In addition, hospitals and health systems typically want payments to its providers and facilities to be withheld to maintain their cash on hand. In other words, their funds aren’t tied up in claims processing, but the transactions are still captured for data analysis.
3. THE IMPORTANCE OF MEMBER EXPERIENCE
As brokers know, it’s important to get members to play an active role in their own health. Engaged members are more likely to understand and use their benefits, especially preventive services. This is particularly important for healthcare workers, who know a great deal about health and wellness, but since they’re often busy caring for others, they may not prioritize their own health. A plan administrator—with seasoned care coordinators—can help by putting an emphasis on fully taking advantage of the health benefits provided to them by their employer.
In addition, member engagement must be personalized through a combination of high touch and high tech. In regard to “high touch,” care coordinators must have a deep understanding of the organization’s health plan and domestic network so they can accurately answer members’ questions. On the high-tech end, using data and analytics, plan administrators can target specific members, such as those diagnosed with a particular condition like diabetes, to receive reminders to schedule important services, such as regular HbA1c testing.
If a new plan is being implemented, the plan administrator should provide a member communications playbook with a timeline of touchpoints to engage members from the start. For some hospitals and health systems, a majority of touchpoints will be digital (e.g. customized landing pages and online plan comparison tools). For others, employees might be better served with print resources, in-person health fairs or teleseminars. No matter what the medium, resources should break down coverage options into easy-to-understand language and consolidate information, so members can find everything they need through a single source, rather than sifting through various documents.
4. COMPREHENSIVE CARE MANAGEMENT TO HELP CONTROL COSTS
Hospitals and health systems also want comprehensive care management to help control costs and improve health outcomes. Care management includes utilization review, case management, disease management, prenatal and other targeted programs. Hospitals and health systems that have leveraged these types of programs have seen a relatively low healthcare cost trend of 1.9% over a three-year period. By comparison, the industry average increased by 5.8% over the same span of time.
In some cases, hospitals and health systems may prefer to facilitate a ‘hybrid’ care management model, where the health plan must collaborate with their own staff. For instance, a hospital may want their health plan to work hand in hand with their medical director to oversee the utilization review and pre-certification process.
5. SOPHISTICATED DATA ANALYTICS
If data tells a story, then analytics is the mechanism to tell it. In the past, hospitals sorted through piles of static reports. Today, they can tap into real-time data and visualize how their health plan is performing. For example, dynamic dashboards can display key performance indicators (KPIs)—such as total claims spend and out-of-network utilization—all in one convenient snapshot.
In addition to cost drivers, dashboards help hospitals and health systems understand utilization trends, domestic steerage and gaps in care. As such, brokers must ensure that their hospital and health system customers have access to a comprehensive analytics solution. This will enable them to see what’s going on within their health plans, and they can take steps to achieve additional savings and value from their programs.
An innovative mindset
Hospitals and health systems need creative, out-of-the-box solutions to address today’s most complex health challenges. Brokers can bring knowledge of the five factors above to optimize their customer’s plan design, facilitate a white-glove member experience and develop effective cost containment measures.
As discussed, analytics is a vital tool in monitoring performance, addressing gaps in care and targeting high cost areas. In addition, the technology supporting these health plans must be flexible enough to accommodate customizations and “plug and play” integration with other vendors, such as a pharmacy benefits managers or other care management programs. Hospitals and health systems want their members to also have access to high-tech tools, such as online portals and mobile apps, to engage with their benefits. Together, these capabilities foster a recipe for success at every level.