Rising health care costs have facilitated more involvement by the C-suite with health care benefits decision-making, prompting a need for benefit advisers and brokers to tailor their selling tactics to the executive level.
According to a recent Towers Watson survey, two-thirds of CEOs and CFOs are more directly involved in developing their companys health benefit strategies. Benefit advisers must adapt to this audience or risk losing business to those brokers who have.
We look at long-term strategies [with executives] as well as tactical decisions, explains Chris Tamney, vice president, account executive with Lockton Companies, a national brokerage firm. We try to break down trends and simplify the drivers of the industry, such as health care reform, and we try to present all this from a benchmarking standpoint among their peers and competitors in order to position [employer clients] so that they make the right decisions going forward.
Part of the brokers job is to provide context, yet for the executive audience, benefit advisers shouldnt delve into the nitty-gritty details as they would with the HR or benefits team. Brokers should focus on showing CEOs and CFOs the larger benefits picture for their organization and how that fits within the industry.
For them its higher level material, adds Tamney. Especially for financial people, when having discussions around cost-sharing increases or making major plan designs, benchmarking becomes really key to make sure theyre taking the pulse of where they stack up in the marketplace.
The Towers Watson survey showed that more and more companies are looking to consumer-driven health plans as a long-term strategy. Only 17% of employers offer an account-based health plan (which couples a CDHP with a tax-advantaged medical spending account, such as an HSA, HRA or FSA) as their only health plan option today. However, the survey found that full-replacement ABHPs could be in place at 50% of companies by 2017, with 4% intending to make this transition for 2015 and another 28% are considering it for 2016 or 2017.
The emphasis is on achieving or maintaining a high-performance health plan, says Randall Abbott, senior consultant at Towers Watson. And CFOs are now focused on a new gold standard: managing health cost increases to the Consumer Price Index. This requires acute attention to improving program performance.
Lockton, which offers a full-replacement ABHP to their own clients, doesnt always advocate this strategy to their clients. It depends on their benefit goal. If an employers goal is to maintain employee choice or provide a traditional benefits framework, then this is not likely the best route to take. Tamney recommends taking a multi-year approach and easing into a sole-CDHP plan design so that workers arent caught off guard. He points out that with the birth of health plan exchanges, many employers may choose to follow the opposite direction and look for plans with more options available to their workers.
De-mystifying wellness
Benefit advisers are particularly important when it comes to providing executives with enough context to portray the benefits of a wellness program. Wellness programs have become very popular with employers in recent years, yet they dont usually generate a return on investment until three-years into the program. In fact, employers might find claims increase during that initial year when people who previously didnt use the benefit begin taking advantage of the plan and taking ownership over their health. Thus, convincing financial executives about the worth of a wellness program during those early stages can be tricky.
"ROI can be the elephant in the room," acknowledges Tamney. Therefore, in the first few years of implementing a wellness program, Tamney suggests, brokers and employers measure additional metrics besides client savings, such as participation levels, preventive care screenings and biometrics.
As the program evolves into a two- or three-year track record, then we can stratify participants in that and look at it from a claim level basis. But at the end of the day, the key metrics that were looking at are adherence to standards of care. We know that as people become more engaged in their personal health, ultimately claims will follow that, Tamney explains.
Three out of four employers (76%) are exploring the use of personalized digital technologies, including mobile health applications and fitness wearables, as well as social media to encourage greater activity among their employees, the Towers Watson survey finds.
We see fitness trackers as a good tool towards health risk solutions, says Tamney. Its another step employers can take to empower employees to be more active in their health.
However, personalized digital technologies are not the panacea, he says: Its a small piece of the puzzle.
Data and metrics in general have flooded the health benefits market and increasingly become essential to evaluating health care benefit program performance. Towers Watson found that 60% of respondents plan to emphasize data as a gauge of performance.
The role of brokers with data analysis is to function as an interpreter or guide, says Tamney, and to help employers sift through all the data.
Sometimes data will have missing elements, so its our role to help connect the dots, he adds.
In all, its the brokers job to synthesize the 10 key drivers of whats happening in an employers population, he explains. Specifically looking at chronic disease management, large claim activity, overall eligibility and population metrics help to tie the picture together. Often not one single area is driving costs and its the brokers task to help the employer make sense of the benefits data and population landscape.
