Brokers

Taking Action: Using data to fight high costs and low quality in healthcare

By Scott Bennett, Vice President of Access Innovation

Featured in BenefitsPRO’s Broker Innovation Lab

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When it comes to helping clients get more out of their health benefits, the richest insights come from robust data sets. While most brokers & consultants know the power of robust data, they don’t always know where to seek it out, or what to do once they have data sets in hand. Here’s a couple of frequently asked questions innovative brokers & consultants can reference when helping clients drive down costs and improve health outcomes for their clients’ employees:

How can I pull cost and quality data on providers in order to help clients make informed decisions about where to direct care?

A number of data sources are downloadable from Medicare’s official website and tutorials on how to analyze datasets on the Medicare Research Data Assistance Center Website (RESDAC). However, there are a few healthcare companies that take this public data and organize it into decision support tools for cost, quality and market analysis.

Let’s say you want to gather more information for your clients on a cost-intensive procedure like an MRI. A third party administrator (TPA) can help identify any costly referral patterns. With the proper data from a TPA, you can help clients reduce costs by finding if there are cheaper referral options available. With the right cost transparency tools, you can draw direct connections for employers to these beneficial partners.

Maestro Health™ makes its own proprietary insights dashboard—the RBP Insights Tool—available to premier industry partners. This tool helps foster innovation and continue conversations that can inform and benefit a self-funded employer.

Is there a resource I can use to compare commercial cost data by region?

A recent RAND study released commercial payment data on hospitals all over the nation, which now allows for a complete comparison across many regions at one time. This RAND data combined with federal quality data, hospital cost data and Medicare-average payment data can equip a self-funded employer with the same benchmarks previously only available to large employers and major carriers.  These benchmarks allow employers to review their present network arrangements and work with receptive providers to negotiate from a position of knowledge with objective criteria. Further, when providers choose not to enter into a reasonable agreement with an employer, this data could support out-of-network negotiations. 

How can employees take a more active role in their healthcare so they can avoid low quality, low-cost hospitals?

To strengthen their high-quality care networks, self-funded companies can use aggregated data to help identify providers that stand out for cost and quality in their geographic area.

A self-funded plan that utilizes a TPA can incorporate cost/quality transparency tools with built-in plan incentives so employees can take a more active role in care navigation. If your client is using a network, there may be more of an opportunity to provide steerage and incentives within that network due to recent case law and settlements between the Department of Justice and large hospital systems. In these settlements, anti-competitive steering restrictions have been removed from many hospital contracts with carriers. Without these restrictions, employers could allow their employees to learn about and seek care from more cost-efficient healthcare providers inside of a network.

Securing access to quality data is easier said than done for many brokers and consultants who work with traditional health plans. But by understanding the benefits of rich data, brokers and consultants can make a major impact on clients’ bottom lines.

 

The top 7 self-funded data points you shouldn’t ignore

By Scott Bennett, Vice President of Access Innovation

Featured in BenefitsPRO’s Broker Innovation Lab

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For brokers, one of the most commonly identified perks for self-funded clients is better access to data for analytics. However, knowing where to begin when digging into the data can be an overwhelming task.

If you’re looking to paint a clearer picture for your clients around achieved and potential cost-savings, you should start by securing access to past hospital claims data (inpatient and outpatient) in a machine-readable format. This can typically be acquired from your client’s Third-Party Administrator (TPA) or Administrative Services Organization (ASO). From there, you can craft a data-driven strategy around medical costs and how they impact your clients’ bottom line.

Here are seven data points to look for within those claims and the assumptions you can make once you have access.

1. The hospital National Provider Identifier (NPI). The hospital NPI allows you to uniquely identify hospitals. There are also data tables with equivalent elements, also known as crosswalks, available to identify the hospital’s “provider number” or Medicare number related to public reports. 

2. The hospital name, address, city and state.* These fields provide good circumstantial evidence to help narrow down a provider. 

3. The hospital revenue code. This field identifies the department related to the billing on the claim line. 

4. An identifier as to whether the claim is inpatient or outpatient. This field is typically on the claim (in the form of a number) and helps if the analysis is filtered for just outpatient or inpatient. 

5. The hospital Current Procedural Terminology (CPT) Code (if outpatient) and the hospital related diagnosis-related group (DRG) (if inpatient). These fields help identify the procedure or services related to the billing on the claim line, and the modifier identifies how the services relate to other services in the same claim. 

6. The hospital billed charge. This field is typically on the claim (in the form of a number) and acts as a starting point when comparing external public hospital financial data or external public claim pricing data (like Medicare). 

7. The hospital allowed amount. If this is provided, it is an excellent way to look at what was actually paid. Using the billed charge and other data, you can compare the payment to external public hospital financial data or external public claim pricing data (like Medicare) to see how the payment/discount matches costs and/or Medicare benchmarks. 

*Note: This field is not always reliable and can vary greatly from claim to claim.

Once you have access to these data points, use a charting software to visualize the findings and identify outliers or trends across provider utilization, payment amounts compared to public market data or procedure trends that may lead to future issues for the plan. In doing so, you can begin to craft a data-driven benefits strategy for your clients that focuses on cost-containment and easily paint yourself as the expert they need on their side. Not sure where to start? Give us a shout.

To take a deeper dive into cost-containment strategies that may be a valuable solution for your clients, register for our upcoming webinar, “Build the dream: Constructing a cost-containment ecosystem for your organization.”

Why Brokers Need to Manage Their Clients’ Healthcare Supply Chain

By Cory Friedman, Vice President, Benefits Consulting, GCG Financial

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As business leaders, our clients know that procurement of goods and services is at the heart of good business practice, and most manage their supply chain with diligence to ensure suppliers meet standards for quality and affordability. Yet, most employers don’t view healthcare services in the same light, and with healthcare as one of their highest costs, they really should be.

In fact, most employers have outsourced the design and management of healthcare services to a broker, consultant or health insurers that have little incentive to improve quality or affordability. In doing so, employers lose control and expose themselves (and their employees) to the wasteful business practices embedded in healthcare and provider contracts. Why are so many employers disconnected from managing one of the most important and costly expenditures for their organizations?

Employers have delegated accountability for healthcare services to human resources, seeing it as a “benefit” rather than a service to be procured in an effort to maintain the health, well-being and satisfaction of their workforce. The end result is predictable: immense and costly variations in access, quality and safety.

The response to the rising cost of healthcare is often reactive (and misguided), passing a portion of costs to employees or shifting the burden of purchasing healthcare services to them through high deductible heatlh plans or health savings accounts.

Employers are in the healthcare business, whether they like it or not.
According to the National Business Group on Health (NBGH), which represents 420 large employers on health policy issues, employers project the total cost of providing medical and pharmacy benefits to rise by 5% for the fifth consecutive year in 2018, bringing the total cost to $14,156 per employee. If an employer has 100 employees, that means they’re managing a $1.4 million healthcare business. At 1,000 employees, their healthcare business is valued at over $14,000,000.

So, what are you doing to manage your clients’ multi-million dollar healthcare businesses?
In today’s ever-evolving employee benefits landscape, we, as brokers and consultants, have an opportunity (maybe even an obligation), to change the game and see ourselves as healthcare supply chain managers willing to challenge our clients to think differently. We have to change our mindset and work to disrupt the status quo.

Successful brokers are not helping employers hold down cost increases by raising employee costs, deductibles, copayments and coinsurance. Instead, they’re applying supply chain methods to healthcare purchasing.

Starting with a self-funded health plan, which gives employers the advantage of examining their data, the best performing companies are building plan designs that work best for their company, identifying targets of opportunity and creating incentives for employees.

When you examine the data, you’ll find wide variations in charges by hospitals. Reimbursements by private insurers can be as much as ten times higher than Medicare reimbursements for hospitals within the same geographic area. To address this, employers are designing health plans and creating incentives designed to encourage employees to use more cost-effective providers. For example, start with high-cost elective surgeries that have a wide variation in price and quality among providers: total joint replacement, spine surgery, cardiac surgery and bariatric surgery, to name a few.

You can put the brakes on rising healthcare costs, without compromising access to quality healthcare for your clients’ employees, with help from the right partners. Partnering with a solution provider that offers an innovative and personalized health plan management approach is key to helping your clients fight skyrocketing premiums.  Ask yourself, “Are you skilled in defending the status quo, or leading performance improvement to give your clients the ability to compete and win?”

Recently I spoke on a webinar, where we took a deeper dive on how some brokers are advising their clients to drive down costs. Click here to download, “Change the game: How employers are winning against skyrocketing premiums.”

Cory provides guidance and objective analysis of group insurance benefits and is currently responsible for the health insurance and employee benefit programs of more than 200 privately held organizations across the country. In 2016, he was selected as a Young Gun Award recipient by Insurance Business America, which recognizes young professionals making a significant impact in the insurance industry. Cory was also named a “Rising Star” in 2017 and 2018 by Employee Benefit Adviser, earning recognition as one of 20 advisers nationally age 35 and younger who exhibit quick thinking, openness to change, and the ability to navigate the ever-changing employee benefit landscape.

A CHRO's Perspective on #BrokerMinds: Part 1

By Sheryl Simmons, Chief Human Resources Officer

As a CHRO, it’s evident that the shift towards healthcare consumerism has led to a major reshaping of employee health and benefits – and brokers are more valuable than ever. Being on the employer-side of things, I’ve always really valued the role of brokers, but sometimes approach things differently. So I teamed up with our marketing team to commission a third-party study of benefits brokers, consultants and advisors to help all of us step into the mind of today’s brokers to learn about technology adoption preferences. The data uncovered three distinct broker personalities based on their technological mindset – Analog Consultants, Receptive Next Gen Brokers and Automation Leaders.

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Chances are you’ve done all the hard work to ensure you have the right broker for your organization and value all they have to offer. In this three-part blog series, I’ll be diving into the data and sharing my perspective on how HR professionals can get the most out of their broker relationship – no matter what type of broker you have. First up, Analog Consultants.

Step into the mind of Analog Consultants.
Analog Consultants tend to take more of a traditional approach to consulting when compared to the other two broker personalities. They have a wealth of experience and pride themselves on the service they provide to their clients. This service-minded approach is likely the reason they tend to have such long-standing relationships with their clients.

While they may be more traditional, they do have an interest in exploring new benefits technology on behalf of their clients – 25 percent stating an interest in learning more about online enrollment tools and 20 percent expressing the same interest in benefits administration tools.

A significant reason for this interest is their concern about staying relevant to their robust book of clients. In fact, 45 percent of Analog Consultants agreed that one of their concerns was staying relevant to the changing needs of technology.

Yet over a third of these consultants aren’t considering Ben Admin tools – meaning some of these same consultants are not adapting to the current industry trends and could be missing key solutions to solve their clients’ needs. The key to all Analog Consultants—no matter where they fall within this data—is identifying their tendencies and communicating your organizations’ needs to them clearly. 

Getting the most out of your relationship.
In my experience, HR professionals who work with an Analog Consultant have a long-vested relationship and rely heavily on them for their legal and compliance knowledge. In fact, 69 percent of Analog Consultants view remaining compliant as one of their clients’ top priorities. However, 69 percent of them also view maximizing benefits offerings as one of their clients’ top challenges.

If this rings true for your organization, then it’s essential to continue engaging in these discussions to ensure your strategy aligns. For instance, if maximizing benefit offerings is a true challenge for your organization, then be sure you are leveraging your broker’s service-minded attitude for assistance. Invite them into the office to host meetings with employees to discuss the benefit offerings available to them and provide the consultation they need. This will help your employees to have the same level of comfort with the benefits your broker is advising as you do.

However, if compliance and benefit offerings are not a top concern for your company, then perhaps it’s time to initiate discussions with your broker to ensure your strategy and goals are aligned. For instance, if HR technology like Ben Admin solutions is of interest to you, be sure you communicate that with your broker. While blue-chip service is a great asset for any broker to have, ensuring you have access to the technology you need to ease administrative burdens and ultimately lower employee health and benefit costs is essential. After all, your broker only knows what is communicated with them.

Take a deeper look into your broker’s mind.
Get the full data on Analog Consultants and other broker personalities by downloading the “2018 Broker Tech Trend Report.”

Stay tuned. Next I’ll be sharing my perspective on the minds of the Receptive Next Gen Brokers.