Health savings accounts are hot, with nearly two-thirds of respondents to a Plan Sponsor Council of America survey saying they believe that even those without a high deductible health plan should qualify. A benefit often cited by employers and employees alike is that HSAs can be a valuable part of one’s retirement strategy, since healthcare expenses are viewed as one of the largest people face in retirement.
All the talk about repeal and replace seems to have lulled many plan sponsors into a false sense of security, thinking that ACA regulations weren’t going to be enforced. Unfortunately, the IRS is preparing to begin penalizing non-compliant plans, which is why we continue to encourage our clients to keep their eye on the ball even though it is easier to follow the media frenzy coming from Capitol Hill.
To help control rising specialty drug costs, the National Business Group on Health has issued a lengthy report including 5 public policy recommendations they hope will educate the marketplace and encourage effective, strategic partnerships.
According to NBGH officials, plan design is the key to managing the use of specialty prescriptions as well as the costs. The report details progress resulting from the aggressive use of utilization review, case management and prior authorization for specialty drugs. Other measures yielding positive results are the design of a specialty tier into the benefits plan and taking measures to administer specialty prescriptions in a facility separate from the hospital. Prescriptions authorized by a hospital or billed under the medical benefit are harder to track and often more costly.
The Altarum Center for Sustainable Health Spending reports a significant drop in health hiring, pricing and spending during the first five months of this year. On average, 22,000 jobs per month were added by hospitals and ambulatory care facilities, compared to 32,000 per month during the same period in 2016. While the healthcare sector continues to be the biggest contributor to overall U.S. job growth, Founding Director Dr. Charles Roehrig expects the 3-year run of greater than 5% growth in overall health spending to end, mostly due to uncertainty over efforts to repeal and replace ACA and a smaller increase in overall spending by consumers.
A recent article in The Self-Insurer magazine described a very simple, straightforward approach to combating the rising cost of healthcare. It featured an approach a law firm is using to encourage and incentivize employees to utilize more cost-efficient healthcare providers.
The firm provides its members with the data needed to compare costs for various procedures, then shares the savings that accrue to their self-funded health plan when a more cost-efficient provider is selected. In some cases, members have received checks for hundreds and even thousands of dollars. Everyone wins according to the CEO and in the process, members learn that shopping for healthcare can be the responsible and rewarding thing to do.
In a previous newsletter, we discussed bundling introduced by Medicare which focuses on orthopedic and cardiac procedures. Through the mandatory initiative for comprehensive care for joint replacements (CJR), which became policy in 2016, some 800 hospitals are participating in the program.
While some sources report the results of bundling as mixed, Medicare reports that joint replacement payments increased by approximately 5% nationally, but decreased 8% for BPCI participants. One large health system achieved a 20.8% episode decrease and another reported a significantly shorter prolonged length of stay – a sign of fewer complications resulting from surgery.
Providers, both acute and post-acute, shared in the savings and indications are that post-acute savings were achieved because their care was bundled, placing these providers at risk. Even though efforts to repeal and replace or modify the Affordable Care Act are on hold, more healthcare providers and payers can be expected to embrace bundling going forward.
The State of Benefits report from BenefitFocus shows that workers under the age of 26 are investing 20% more of their salary in HSAs than other generations. This is certainly due to the fact that nearly half have elected to enroll in high deductible health plans in 2017. While PPO plans remain very popular, especially among older adults, employee contributions to HSAs and FSAs are rising. A growing interest in savings among young people is another factor contributing to the increased popularity of HSAs.
The IRS and Department of Health and Human Services recently released new limits for contributions to HSAs and Health FSAs for 2017. Contributions by individuals to HSAs cannot exceed $3,400 in 2017, with the maximum family contribution remaining at $6,750, the same as 2016. Once again, a $1,000 catch-up contribution also applies.
Health FSA limits for 2017 have been increased by $50 from $2,550 per employee to $2,600. Health FSA transportation fringe benefits for parking, transit passes or vanpooling are remaining the same this year, with a limit of $255 for each.
The IRS began indexing affordability safe harbors to inflation last year. This year, minimum annual deductibles for High Deductible Health Plans (HDHPs) remain unchanged at $1,300 for individuals and $2,600 for families, with required out-of-pocket maximums remaining at a minimum of $6,550 for individuals and $13,100 for families.
The U.S. healthcare system is changing as many consumers are trying to be proactive, make financially smart and healthy choices and find more ways to get a better handle on costs. Taking charge of your health and saving money on medical expenses can truly begin with knowing how to talk to your doctors and medical providers. Here are tips to maximize communication:
- Write down the top problems you are experiencing to help your doctor focus on what to treat first.
- Bring a list of all current prescription medications as well as over-the-counter medications, vitamins or supplements and include dosage and how often you take them.
- Keep a handy record of recent test results, lab reports, surgeries and other relevant health information.
Costs should also be a part of every conversation and patients should be not be afraid to bring up the subject. While doctors are typically not afraid to discuss costs, they simply may not know exact costs or projected out-of-pocket expenses.
Another area of concern is the rising cost of prescription medications. If your doctor does not bring up a generic alternative, then you should. Here are ways to save on prescriptions:
- Skip chain drugstores and consider shopping at a warehouse store for lower prices.
- Go local to your neighborhood pharmacist and ask them to beat a competitor’s price.
- Know that some chain and big-box stores offer common generics at low prices for people who pay out-of-pocket and not with their insurance.
- Ask your pharmacist if any discounts, programs, cards or coupons could make your price lower.
- For long-term drugs, consider buying a three-month supply so you pay one co-pay rather than three.
Remember that walk-in clinics are suitable for common procedures like flu shots, sports physicals and minor injuries and they are always more cost efficient than emergency rooms. Staying healthy is still the optimal way to save money on healthcare, so take time for your own health. Know your blood pressure, pulse, cholesterol and family medical history and always make efforts to control weight.
Whether it comes as a shock or not, it’s a simple truth that the majority of employees don’t fully understand their health benefits. And, even if the benefit managers fully understand, sometimes they don’t have the tools to administer the kind of change needed to actually reduce healthcare costs.
Alithias is a platform that allows EBSO to give providers, employers and patients everything they need to take control of and better understand healthcare benefits. Sure, there are plenty of “transparency tools” out there that promise to make healthcare easier to understand and more affordable while also helping to engage employees. But, the people behind Alithias know that transparency tools have a utilization rate of less than 5%. That’s why Alithias is different – it offers features that truly help people “get it” and get the benefits assistance they need.
Compare Actual Prices
Something the average patient does not realize is that more than 30% of healthcare costs are “shoppable”. Alithias’ technology lets patients begin a search by first choosing a common medical procedure within a certain radius of their zip code. The search results then list options of available physicians or groups along with their location, average price for that chosen procedure and quality ratings. And, as if that weren’t simple enough, the patient will also see a detailed description of the procedure and the option to start a live chat with someone who’s ready to give them online support if they need it.
We believe that offering a personal relationship or live help might just be the only approach to ensure plan members seek appropriate care. Because, let’s face it, when people don’t understand their healthcare sometimes their only solution is to avoid it all together, especially when the fear of the unknown cost kicks in. Alithias uses assigned individuals, called Care Navigators, that are there to answer questions that patients don’t know the answers to and teach them what they need to know about healthcare, while also helping them find the best costs or the best doctors. With this kind of help, employees become more educated and involved in their own healthcare, ultimately making smarter decisions and saving on costs. In fact, the average savings for plan members using a Care Navigator is greater than $1,000 per procedure!
These are just two of the beneficial features Alithias can offer. If you’re struggling to give your employer groups and employees the benefits help they need, it’s time you talked to EBSO about Alithias.