Three ways companies can make healthcare more affordable

Businesses struggle with high health care benefits for their employees. As companies prioritize employees’ well-being, health care benefits are often their biggest expense, second only to the cost of goods and services they provide. Employer-sponsored health care costs are expected to rise by 9% in 2025.

Large employers can use data-driven strategies to help reduce health care costs. Employers can address three areas to make healthcare affordable for themselves and their employees without sacrificing quality.

1) Measure the results of GLP-1

GLP-1 is a hot topic. These drugs have been around for nearly 20 years to treat diabetes, but in the past few years, utilization has increased exponentially to address obesity.

A recent KFF health tracking poll found that about one in eight American adults said they took GLP-1. The drug class continues to expand with the expansion of labels to reduce the risk of cardiovascular death, heart attacks and strokes, as well as dozens of ongoing clinical trials to bring GLP-1 drugs to market.

GLP-1 will be an important part of the drug landscape for the foreseeable future. Employers must understand the economic costs and clinical outcomes they are achieving. However, the success of measuring GLP-1 requires data complexity.

Employers must combine drug, medicine, biometrics, laboratory and other data to monitor utilization and results. They also have to understand how weight management and diabetes programs affect outcomes and know if they have achieved a good return on investment (ROI). In addition to healthcare utilization, disability and absence data can also help employers understand ROI from a productivity perspective.

Understanding the cost of GLP-1 and its health impact can help companies determine how to manage these prescriptions over time.

2) Target mental health and well-being

One in five adults in the United States suffer from mental illness every year, less than half of them receive treatment. Employers are increasingly concerned about mental health to support the well-being of their employees. Many companies now offer tools and services, such as private meetings with mental health professionals or introducing outside speakers to talk about mental health topics.

To be truly different, companies have to connect people with the services they need. Several obstacles can prevent people from getting the help they need – financial problems, pessimism about treatment, lack of support from loved ones, stigma or simply perceptions they can handle themselves.

Data can help improve well-being, especially when companies combine data with socio-demographic data to make their population more comprehensive. Learning more about their community, education level or ethnic background can help employers tailor their approach to engage them in mental health services.

These assessments are particularly important for companies using suppliers for health and mental health services. With data, companies can let suppliers take responsibility for the results. For example, data can show how vendors arrive at members and whether they reach the people who need help the most.

3) Negotiate pricing with better information

Reimbursement strategies are crucial. Negotiating better pre-pricing will have a significant impact on member affordability, population health, growth and profitability.

There are four aspects of pricing analysis that every employer should consider before negotiating a health plan benefit contract:

• Medicare Reintroduction It is the gold standard discount baseline. This is an important data point because it is the common language used by payers, providers and consultants.

• Machine Readable Files (MRFS) – Transparency overlaying the final rule requires these documents to make healthcare pricing information easier to access. Note that the size of these files can be difficult to use, and health plans and providers can use different formats, which makes it difficult to compare them. However, they offer great hope and should be essential in any pricing analysis.

• Compensation benchmark – Using a market-level benchmark for paid claims is the best resource to tell employers what’s going on. This real-world data is a good choice for evaluating MRF accuracy.

• Advanced Analytics Report – Employers must be able to attract all information into an environment where they can be modeled. Here, they can compare utilization and current spending with competitive data points, or evaluate how their contracts are established.

If employers know which diagnostic-related groups (DRGs) are driving costs, that is strong information when negotiating pricing. These facts and the ability to monitor change over time.

Complex data is essential to reduce costs

In these three areas, one or two data sources are not sufficient to meet the challenges of health benefits costs. Companies should use a powerful set of curated, aggregated data sources to discover trends that affect their members. Data-driven strategies will require a higher level of data complexity than ever before, but cost savings and protection of high-quality care are worth the effort and investment.

Photo: Lerbank, Getty Images

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