Warren Buffet likely wasn’t talking about health care benefits when he said, “Price is what you pay. Value is what you get.”
However, employers would be well advised to consider this adage, as many health care purchasers have put far too much focus on costs and not nearly enough on value.
Health care costs continue to rise and are the greatest expense for most employers outside of payroll—and employees and their dependents are no healthier from the effort. This is where value-based benefit design comes into play, and when done correctly cannot only save employers money, but also result in a healthier and more productive workforce.
Tailored care
While there is no “one-size-fits-all” approach for employers, value-based benefit design involves employee incentives that encourage:
- Participation of the appropriate use of high value services such as compliance with prescription drugs and preventive services to preempt or manage chronic conditions.
- Use of doctors and providers that follow evidence-based treatment guidelines.
- Adoption of healthy lifestyles, such as increasing physical activity or stopping smoking.
To be successful, these efforts must extend beyond an employer’s insurance program and offer incentive-based programming such as wellness services.
Building a repertoire
Once an employer has programs underway, they then need to avail themselves of tools that will allow them to assess the true value they are getting from their health plan and wellness vendors offering these programs.
Evaluation and measurement are important steps to assessing value that many benefits professionals often skip, given time and resource constraints. In doing so, they are doing a disservice to both their management and employees, as you can’t improve what you don’t measure.
Value-based benefit design strategies can have a positive and profound effect on improving the quality and efficiency of health care services. As more employers recognize the importance of assessment and measurement, negotiating with their vendors, offering incentives for their employees and taking advantage of their collective buying power, they can have a significant effect on not only their employee populations, but the overall health care market—and ultimately the health of the nation.