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Healthcare and Workforce Experts: Reduce Costs With Consumerism

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"You have to bridge the communication gap and make this as easy as possible.”

Benefits brokerage Bernard Health hosted its 7th Annual Health Reform Luncheon Wednesday, bringing together a panel of local healthcare and workforce experts to discuss group plan sustainability, healthcare consumerism, and political uncertainty.

The panel, which comprised Nashville Health Care Council president Hayley Hovious, Healthcare Bluebook co-founder and SVP Bill K

ampine, BernieHR leader Rebekah Michel, and Farm Bureau Health Plans chief marketing officer Randy Wilmore, agreed that the state of health reform was likely to remain uncertain for the foreseeable future.

“I don’t know that you’re going to see a lot of movement,” Hovious said. “When I talk to employers, I’m not getting a sense that they think this is going to get worked out. In terms of planning, it’s likely that there will be more people off of the exchanges, which means more people back on your plan.”

Wilmore added that until a solution is developed to address high risk patients in the individual market, premium prices are likely to rise.

“I think we will see a new class of uninsured due to people who can’t afford it,” he said. “I don’t want to call it a death spiral, but as the prices rise, healthier consumers will stop buying, leaving insurers with sicker populations.

The higher premium prices and lack of competition in the individual market is also pushing smaller employers, who initially embraced the exchanges, to return to small group plans, Wilmore said.

But employers of all sizes have to address the increasingly unsustainable cost of healthcare and insurance. Adjustments to plan design, including narrow networks and HSA-eligible plans, are popular options for reducing costs. But these strategies do carry some risk.

“We’re seeing a lot of interest in narrow networks, but it’s brought [to employers] from the healthcare delivery system. Employers need to look carefully. If you’re getting a 10 percent discount on a $4,000 procedure, but it should cost much less, the math doesn’t work out,” Kampine told the audience. “So be careful of what you’re encouraging people to do. The narrow network is a very popular item, but it has real implications for employers.”

Adopting and optimizing HSA-eligible, or high deductible, health plans is a cost-saver for employers. But Michel pointed out that effective communication is key.

“There’s a lot of education that has to go on, but employees embrace it when they see the cost-savings that they are getting,” Michel said. “We’re seeing employers take the defined contribution approach and contribute toward HSAs and ancillary options. Employees really like this approach, because it gives them choices, and everyone wants choices.”

The panel agreed that employee education was key to achieving cost reductions. “The single biggest challenge in helping employees be better healthcare consumers is awareness,” Kampine said.

Employees don’t always know that healthcare prices vary or that they can shop around to find cost-effective care.

“People have been trained not to be cost-sensitive,” Hovious said. “You have to educate your population, and it’s really important as you see more people move to high deductible plans. For the first time, they’re being asked to pay for their care. Nobody knows what anything costs, so you’re teaching them how to shop. You can’t over-communicate this stuff.”

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However, this trend may improve as Millennials make up a larger portion of the workforce.

“The younger generation wants to shop, and that’s the good news,” Kampine said. “But they aren’t big healthcare consumers yet. You have to bridge the communication gap and make this as easy as possible.”

Focusing on consumerism and plan design can be an effective way to address rising costs in spite of federal ambiguity. Though the employer mandate, Cadillac tax and other regulatory items remain uncertain, employers can benefit in the short term by helping employees become better healthcare consumers.

About Bernard Health

Bernard Health provides expert advice about health insurance to individuals and employers and is a recognized leader in helping groups implement and support an HSA-based health plan option. Since its founding in 2006, Bernard Health has grown its value proposition to include proprietary HR software and industry-leading benefits and HR advisory services. Bernard Health has regional offices in Nashville, TN, Indianapolis, IN, Austin, TX, and Atlanta, GA, and broker, provider, and financial advisor partners around the country. The company’s mission is to be the world's most trusted advisor in helping people plan for their healthcare.

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