human resources

Employers Are Using an Innovative Way to Soften the Financial Burden of High Deductible Health Plans

As a healthcare data technology company, the most common question we hear from employers is, “how can we lower our healthcare spending?”  The high cost of healthcare has a significant impact on employer expenses.  The Milliman Medical Index projects that in 2018 the average premium for a family of four is $28,166.  While the magnitude of health costs is a reality for our employer clients, finding an effective way to manage these high costs is often their first priority.

When we drill down into cost-drivers, we consistently see a startling theme across employers—that only 5% of people are driving 51% of healthcare spending.  A very small group of people with chronic conditions (such as diabetes, rheumatoid arthritis, or cancer) are contributing to half of the total health spending.  While this disproportionate spending is a reality within employer populations, according to the Kaiser Family Foundation Medical Expenditure Panel Survey, this also holds true for Americans as a whole.

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As a way to manage the rising cost of healthcare, nearly 40% of adults are covered by what is known as a high-deductible health plan.  Under this model, employees share in a greater share of their health expenses, responsible for on average $5,248 of out of pocket medical costs each year.  The thinking behind this way of cost-sharing with employees is that when employees are responsible for paying a greater share of their health expenses, that they will become better healthcare consumers by shopping for the best prices and avoiding unnecessary procedures. 

Unfortunately, in many of these cases the high out-of-pocket medical costs cause financial hardship on many people.  A survey from the Kaiser Family Health Foundation found that 1/3 of adults have trouble paying their medical bills, and 73% have cut back on spending on food, clothing or basic household items to pay their medical bills. The Report on the Economic Well-Being of U.S. Households, an annual survey conducted by the Federal Reserve Board, found that 44 percent of adult Americans claim they would not have $400 in case of an emergency without turning to credit cards, family and friends, or selling their own possessions. When those who are financially strapped have mounting healthcare bills, the consequences can be personally devastating.  A 2015 poll by the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health found that 26 percent of those who took part in the survey claimed medical bills caused severe damage to their household’s financial wellbeing.

Because the impact of high healthcare deductibles causes such a financial hardship for individuals and their families, many recent studies have shown that this type of health plan causes individuals to delay necessary healthcare.  Researchers from UC Berkeley and Harvard studied the results of a large employer’s choice to offer a high deductible plan over 2 years. Instead of finding evidence to support the theory that high-deductible plans make people take more charge of their health spending, they found no evidence to show that employees were comparing costs or cutting unnecessary services once they had a high healthcare deductible.  They cut low-value health services at the same rate as they were cutting important medical services, causing the employer to question whether members were making the right choices for their long term health.  Additional studies have found that the danger of high deductible health plans is that their members with the highest health risks have shown that they avoid necessary care and medications due to cost. 

On the other side of the phenomenon that 5% of people drive 51% of health costs, we see another theme that is equally surprising—half of plan members contribute to only 3% of total health spending.  That’s right—a large proportion of costs come from a small number of people, yet a large number of people contribute very little to overall costs.  Why is this? 

At BetaXAnalytics, when we look at employer utilization of health services we consistently find that between 10%-20% of members never see their doctor.  These are the employees who either feel they simply “don’t have time” to see the doctor or “don’t have the money” to spend into their annual deductible.  But it’s within this group of people who are not driving costs today where an employer’s greatest healthcare risks can lie. 

The answer for employers?  Make it as easy as possible for members to get the care they need.  One effective way to ensure that people aren’t avoiding necessary care is to remove the traditional financial and convenience barriers that prevent employees from seeing the doctor.  Hooray Health provides a template for employers to solve this problem. They afford first dollar coverage for preventative, basic and urgent care visits with $0 deductibles, and $25 copays for all in-network visits.  Their innovative network consists of over 2,400 retail clinics and urgent care centers across the country with extended hours and no appointments necessary.  They also provide access to telemedicine visits via phone 24-hours a day, 7 days a week at no cost which makes getting necessary care quick and easy, even when work and family schedules make it difficult to go into a doctor’s office.  Their app-based tools and live medical concierge are available 24/7 make finding care easy and convenient.  As an added benefit to address employee concerns about prescription costs, Hooray Health offers a prescription discount card to ensure employees that they are receiving competitive prices for their medications.

Hooray Health removes financial and convenience barriers that prevent people from getting the care they need by making access to necessary care easy, convenient, and free for employees.  This type of solution is particularly useful for employers with high deductible health plans where high out of pocket costs may deter employees and their families from seeking the necessary care that they need.  While solutions like these remove barriers to care, they also save employers money by providing an affordable alternative to many of the care services needed by their members. Providing easy-to-use concierge-based access to a network of retail clinics, urgent care centers and telemedicine doctors ensures that employee health won’t neglect their health due to lack of money or lack of time.  You can learn more by contacting them at info@hoorayhealthcare.com

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About BetaXAnalytics:

If you're an employer who feels there's got to be a better way to control health care costs, you're on to something. And we can help. BetaXAnalytics partners with employers to use the power of their health data "for good” to improve the cost and quality of their health care. By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, to save health dollars and to better target health interventions to keep employees well. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

About Hooray Health:

Since its founding in 2017, Hooray Health has been committed to disrupting the health insurance industry by providing employers, individuals and their families with the assurance that their basic healthcare needs are covered. Here at Hooray Health, we believe that healthcare should be simple, honest, and affordable, that’s why whether you apply online or over the phone, the process is always simple, and acceptance is guaranteed. Partnered with over 2,300 urgent care and retail clinics, and a 24/7 medical concierge team, Hooray Health members know that no matter where they are or what time it is, their healthcare is there for them. Starting plans have a low monthly cost with no annual deductible, an affordable copay, and no surprise balance bills. Every day, Hooray Health is smashing the industry norms and bringing healthcare to all.

Forget Flashy Technology: Here Are 3 Data and Analytics Best Practices Any Company Can Use Right Now

Image credit: iStockPhoto, Ryan J. Lane

Image credit: iStockPhoto, Ryan J. Lane

The ability to take data—to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it—that’s going to be a hugely important skill in the next decades.
— Dr. Hal R. Varian, Chief Economist at Google

Practically everyone is talking about using data and analytics to succeed today in business, but surprisingly companies are only deriving a fraction of the value that’s available to them in their data when they’re making decisions. The reasons for this vary across organizations, but often times it comes down to budget constraints, talent constraints, or lack of recognition from leadership that analytics will help their business to run better. During an interview in 2009, Google’s Chief Economist Dr. Hal R.Varian predicted, "The ability to take data—to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it—that’s going to be a hugely important skill in the next decades." 

Let’s take a look at some of the highest-performing companies out there today.  Over the past 5 years, there have been 13 companies that have managed to outperform the S&P 500 each year.  And when you take a look at this elite group—which includes companies such as Facebook, Amazon, and Google—you find that the majority of these businesses are algorithmically-driven.  These companies take in data constantly, and use this data in real time to update the user-experience.  In their 2012 feature on big data, Andrew McAfee and Erik Brynjolfsson shared findings from their research that “companies in the top third of their industry in the use of data-driven decision making were, on average, 5% more productive and 6% more profitable than their competitors.”  It is hard to deny that success in our respective businesses is not a function of how well we make use of the data available to us. 

So how does Human Resources (HR) fit in to this picture?  HR may not be the first group that you think of when considering who should have a strategy around using data.  However, HR has the weighty responsibility of managing the top expenses of a company—salaries, healthcare, and benefits.  The 2018 Milliman Medical Index estimates that the cost of healthcare for a family of 4 this year will be upwards of $28,166. Yet approximately 20% of employer-sponsored health care spending is wasted each year due to unnecessary or preventable costs across the continuum of care.  The rise of high deductible health plans mean that decisions made within HR on health plans and benefits are decisions that weigh heavily on their employees pocketbooks as well.   When we look at HR through the expense-management lens, we see that HR carries the company’s fiduciary responsibility to manage these expenses not just for the bottom line of the employer, but also for the sake of their employees’ wallets.

We often see companies who make the decision to start using data and analytics immediately start shopping for a tool to make use of their data.  While this step may be right for some companies, there are a few foundational analytics best-practices that we recommend companies have in place before making any analytic technology investments.

1.       Understand the quality of your data.  One of the biggest mistakes we see companies make is that they assume that just because a report comes from I.T. or from a vendor, that the data is correct.  However, very rarely is the data captured by a company in “ready-to-use” form.  IBM estimates that poor data quality cost American companies $3.1 trillion  in 2016 alone.  A recent study of 75 executives who assessed their own organizations data quality found that only 3% of their companies’ data met basic quality standards.  Furthermore, understanding data quality is a fundamental issue within organizations, executives are more informed to understand how data quality affects their vendor partners as well.  Every bit of data that we review is a piece of a much larger picture, and understanding the limitations of the quality of your company’s data helps to make a more accurate assessment of its insights.

2.       Develop your data strategy.  Take a step back from day to day operations to decide how to data can help to inform your decisions.  This affects what metrics you’re looking at, and how often you’re receiving it.  Many companies are surprised to find that the process of developing a data strategy often means reducing the amount of reports people are looking at.  A common assumption is that the more data we’re looking at, the better off we are.  In reality, when decision-makers are inundated with extraneous reports, they may miss valuable messages that they need to see.  What goals is your division working towards?  Which pieces of data most closely track progress to these goals?  The best way to guide a strategic process for looking at data aligns your business goals with a limited number of key metrics to indicate when changes are needed to reset course. 

3.       Identify a data “expert” on your team.  Given the issues that exist in every organization with data quality, it is valuable to identify someone who is intimately aware of the source and limitations of the data your company assesses.  This person can answer questions on why particular data might be wrong, if duplicate records are skewing the data, or how outliers are affecting results.  Your data expert can help to tell the story of your organization’s data to better frame what actions are needed to meet your operating goals.

Using data to make better business decisions does not need to be cost-prohibitive for your company.  Before investing in any data and analytics tools, implementing these foundational best practices lays the groundwork for a sound approach to using data.  They can be used by any company, regardless of size or budget.  And the best part is, you can start to use these best practices today.

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Bob Selle has led culture change and organizational design for America’s most recognized retailers.  He is currently the Chief Human Resource Officer for the northeast's premier close-out store Ocean State Job Lot, leading a transformation that has named them a Forbes Best Midsize Employer two years in a row.

Shannon Shallcross is a data expert who believes that data interpretation holds the key to solving healthcare’s toughest challenges. As the co-founder and CEO of BetaXAnalytics, her company uses the power of data “for good” to improve the cost, transparency and quality of healthcare for employers.

See Bob and Shannon at the Strategic HR Mt. Washington Conference on October 29th, 2018 during their plenary session, Metrics That Matter: Let Numbers Tell a Story.

5 Questions with HR Leader Bob Selle on Why Decisions and Data Go Hand-in-Hand

Photo: Getty Images

Photo: Getty Images

Wellbeing goes far beyond what many think of when they hear the word “wellness.”  And employers realize that employee wellbeing is a key building block to creating an engaged and productive workforce. 

Bob Selle, Chief Human Resource Officer of Ocean State Job Lot (OSJL) talks with our team at BetaXAnalytics (BXA) about the challenges employers face with respect to maintaining a “well” workplace, and how data allows them to achieve this. 

BXA: What challenges make it difficult to have a healthy workplace?

Selle: Keeping a heathy workplace is hard, and retail poses some unique challenges. Associates are so spread out geographically and being able to communicate and get the right message can be difficult. Helping the associates understand the "why" to living a healthy lifestyle is also a challenge. We strive to translate what it means to their quality of life when they make healthy lifestyle changes.  Lastly and most importantly, we need to tie pieces together so they understand all the individual links that fit in a wellbeing chain.  Wellbeing goes beyond physical activity and nutrition; mental health, sleep, finance, and stress are all individual parts that tie the chain together.

BXA: How does Ocean State Job Lot support a healthy workplace?

Selle: OSJL supports a healthy workplace through a number of activities.  First, we have best in class benefits offerings at a very low premium to our associates. We are all one family and we believe in sharing our profits and low cost, and offering quality healthcare is one way to do this. We also listen to our associates.  For example, our associates want to be active and also give back to their communities. So we will pay for their entry fee in local walks/runs. We work with partners who share our values and find ways to have fun challenges between the locations we serve. Eating right is a big deal so we partner with Chop Chop, a non-profit who helped us create recipe cards and menus we share on our communications portal. Understanding that caring for associates and their families means caring for their pets, we now offer pet insurance.  In addition to this, we provide life insurance for every associate who works 20 hours or more.  Supporting a healthy workplace means so much more to us than the obvious.  We want to prioritize providing the education and resources that can ensure our associates have the tools they need to be healthy.

BXA: Why is data-driven decision making important at Ocean State Job Lot?

Selle: Data is valuable because it takes the emotion out of the equation. I like to ask my team, “What is the story?”  Data can provide this in many ways. The story can be told in pictures or graphs, but the bottom line is that it's factual and actionable.  The traditional barriers to using data to drive decisions are access (people do not know how to obtain the data they need) and understanding (people do not understand how using data can help them to form better decisions.) Every company has limited resources, so it is important to be targeted in your approach to wellbeing in order for your efforts to succeed.  At OSJL, we want to be smart stewards of our finances to be able to provide the best benefits possible for our associates, while providing low prices for our customers; making data-driven decisions helps that to happen.

BXA: How does OSJL use data to support their spending decisions?

Selle: We use the data to ensure that we work with the right providers for our associates. For example, if we did not know that not having life insurance coverage was a stress for our people, we would never have invested in this. Data showed that our associates are more at ease if their pets had insurance, so we made a business case to offer this benefit. Lastly, we have learned from our data that those who work part time for a number of businesses may not have the resources if an emergency came up.  So OSJL provides a full service employee assistance program to ease the burden.

BXA: What does the future of wellbeing look like at Ocean State Job Lot?

Selle: The future of wellbeing for OSJL is two-fold. First, we are becoming “surgical” in our approach to using data.  We want to make sure the resources we are providing to keep employees healthy are aligned with our true cost drivers and needs.  Second, wellbeing is at OSJL will continue to be fun and rewarding. Seeing and hearing the stories of associates who have transformed themselves using the tools we provide is priceless. This is why I do what I do.

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Founded in 1977, Ocean State Job Lot is the Northeast's largest, privately held, closeout retail chain with 126 stores in New England, New York, and New Jersey; approximately 4,800 employees; and annual sales exceeding $650 million. Our company mission is to provide exceptional value to our customers through opportunistic buying and selling of quality brand name merchandise, and to share the resulting profits with stockholders, associates, and the communities in which we live and work. The Ocean State Job Lot Charitable Foundation has a long history of philanthropic leadership, placing emphasis on local food banks in communities where we operate stores. Ocean State Job Lot is headquartered in North Kingstown, RI. oceanstatejoblot.com

BetaXAnalytics partners with employers like Ocean State Job Lot to use “data for good” to improve the cost and quality of health care.  By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, saving health dollars and better targeting health interventions to keep employees well.  For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow Follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.