November 20, 2015
In a recent article in Employee Benefit News (EBN) on the topic of health care transparency tools, writer Bruch Shutan cautions that “whittling down cost and quality measures for a more consumer-friendly presentation may improve employee uptake of such tools, but one industry expert with a medical background cautions that it could come at the expense of other important issues.“
Jeff Levin-Scherz, an M.D. and the national leader of Towers Watson’s health management practice, noted that a balance must be struck between simplifying the tools and keeping the valuable metrics and data they provide. Levin-Scherz favors including many meaningful metrics “because it probably drives quality improvement over a wider array of services.”
As a physician, Levin-Scherz is optimistic about efforts to increase transparency generally while reserving a “key role” for physicians in communicating valuable information to patients. One area that could benefit from better transparency tools and that has been prone to lack of transparency in the past is specialty pharmacy.
“If it’s for a specialty drug where there’s only one of that drug and there’s really no choice, it’s purely about contracts,” Levin-Scherz said. “But in instances like for hepatitis C, where there are multiple very highly efficacious medications, having a product design that steers people toward one or toward another can actually lead to substantially lower prices.”
As health care transparency tools and employee education increase, so do opportunities to control the high cost of health care for both employers and employees.
To read the complete article in EBN, click here.
November 20, 2015
One of the more controversial provisions of the Affordable Care Act (ACA), the excise tax on high-value health plans, goes into effect in 2018, and many employers are already making changes to the health plans they offer to avoid it. Among the changes are implementing narrow networks, transitioning to high-deductible health plans, and incentivizing participation in wellness programs that improve health and could reduce the incidence of chronic illness down the line.
With the open enrollment period for the 2016 plan year well underway, Sandy Ageloff, West Division leader of Towers Watson’s health and group benefits practice, underscored the importance of employers informing their employees of current and planned changes and what they mean.
In an article by Shelby Livingston of Business Insurance, Ageloff counseled employers to be sure that “employees are paying attention and understand the magnitude of change that might be happening in their employer’s benefit plan this year.”
To read the complete article in Business Insurance, click here.
November 5, 2015
Crossover Health and Towers Watson recently announced a collaboration to open near-site health centers to help employers provide improved access to health services for their employees. Crossover Health designs and delivers a unique employee care experience for employers through a comprehensive primary health offering. As part of this collaboration, Towers Watson provides implementation support, quality oversight and performance measurement services.
The first clinic opened on October 5th in Mountain View, California and is already fully subscribed by five leading employers, including tech leaders Intuit and Microsoft.
According to a recent study by Towers Watson, more than half (56%) of large employers have had onsite or near-site health centers for more than five years; an additional 66% plan to expand their onsite services. In addition, employers that already provide these types of facilities expressed confidence that health centers improve their employees’ health and productivity. Four in 10 (38%) of employers with existing onsite health centers plan to add new ones over the next two years.
“Employers welcome cost-effective and innovative solutions that keep employees healthy and productive, and the near-site option opens the opportunity for more employers to access this attractive offering,” said Andrew Halpert, M.D., a senior health care management consultant at Towers Watson. “Through a wide array of convenient and personalized services, the near-site health center provides a scalable alternative that can match the needs and programs of employers of all sizes. Working together with Crossover Health, we are looking forward to bringing this novel approach to our clients and delivering outstanding clinical and engagement results.”
To read the press release, click here.
A common misperception among employers about private exchange solutions for their active employees is that they moving to an exchange means giving up control over their health care strategies and plans. According to Sherri Bockhorst, managing director of Towers Watson Exchange Solutions, this is not always the case.
While adopting an exchange does relieve employers of the day-to-day burden of managing their health benefits programs, some exchanges provide employers with the flexibility to configure their exchanges to meet their own business and organizational goals, says Bockhorst.
In a recent podcast interview with Brian Kalish, online managing editor of Employee Benefit Advisor, Bockhorst talked about the four pillars of a private exchange — choice, price transparency, decision support, and employee involvement — and explained the options that employers that have adopted OneExchange for their active employees have in each of these areas.
For example, when it comes to employee choice, employers can decide which carriers, how many plans, and what kind of plans to offer on their exchanges. In terms of price transparency, employers have the flexibility to adopt either a defined contribution model or a more more traditional payment model.
Bockhorst also pointed out that the assistance of an experienced advisor can help employers realize the full value of an exchange by asking the right questions to determine what kind of incentives, wellness programs, or other offerings they want to provide their employees.
To listen to the entire interview, click here.
U.S. Employers Expect Rate of Increase in Health Care Costs in 2015 to Remain Low, but Well Above Inflation
October 22, 2015
Employers expect a 4.1% rate of increase in the cost of employer-sponsored health care benefits in 2015 – the lowest in 15 years but well above inflation — according to an annual survey by global professional services company Towers Watson (NASDAQ: TW) and the National Business Group on Health (NBGH), an association of large employers.
Nervertheless, the survey found that employers are more committed to providing some form of health care coverage to employees over the next 10 years than they have been in recent years. Employer confidence in offering health care coverage 10 years from now has nearly doubled to 44% today from 25% in 2014.
“Against the backdrop of sluggish economic growth and low inflation – which limits the degree to which companies can raise prices on goods and services – employers continue to aggressively manage their health benefit plans to rein in costs,” said Randall K. Abbott, a North American leader and senior strategist in Towers Watson’s Health and Group Benefits practice. “By and large, employers have done a good job managing costs in recent years. Despite this success, the ACA’s excise tax looms ahead in 2018, and 4 out of 5 employers now identify changes to health and pharmacy plan designs as their most important strategic priority.”
For more information about what additional actions employers are considering to manage costs, and additional survey findings, read the entire press release here.
September 29, 2015
It might seem counterintuitive, but there are ways employers can cut costs that result in better quality. This is according to Randy Abbott, a leader and senior strategist in Towers Watson’s North American Health and Group Benefits practice.
Abbott notes that most employers want to achieve better patient outcomes at a lower cost per patient. He points to two value-based strategies as examples of especially effective pathways for getting there:
- Employers can build and “curate” medical service provider networks that leverage all available delivery channels to ensure that care is being provided appropriately and affordably.
- Employers can add value-based contracting to traditional fee-for-service reimbursement arrangements, which requires providers to focus on outcomes and not just cost.
Three trends make pursuing these strategies appealing:
Consolidation among health care providers. Consolidation typically results in higher prices because it eliminates competition. However, consolidation among health care providers creates the potential of upside economic advantage for all parties. That’s because larger providers can leverage capital expenses over a larger community while patients and their sponsoring employers benefit from care being delivered in optimal venues.
Physician shortage opens up new channels for delivery. A shortage of primary care physicians is being mitigated in several ways. These include telemedicine, smartphone-based health applications – which can enable remote monitoring of chronic conditions, among other activities – and empowering other health care professionals to assume some of the activities that have been reserved for physicians.
Health reform shifting focus to outcomes. By challenging providers to deliver more than a good price, the Patient Protection and Affordable Care Act has changed the way reimbursement works — forcing providers to manage quality, efficiency and outcomes in addition to cost.
In a recent article on this topic in IndustryWeek, Abbott wrote, “Consolidation of health care providers, the emergence of new channels for accessing health care, and the addition of payment systems that reward outcomes create the ability for employers to develop curated networks and integrate numerous payment models to achieve optimal value. These are strategies that all employers seeking quality at a lower cost should consider.”
To read the entire article, which goes into more detail on these opportunities for employer, visit IndustryWeek.com.
September 24, 2015
Cobb County in Georgia and the Alameda County Employees’ Retirement Association (ACERA) in California are public retirement systems that sought new ways to provide affordable, comprehensive health plans for their retirees in the face of high costs and growing concerns over the long-term liability of offering the benefit. Both turned to Towers Watson’s OneExchange for a Medicare solution.
OneExchange helped in several ways, including by offering a wide variety of plan options, providing one-on-one enrollment support to retirees, and delivering a suite of communication tools to educate retirees.
In fact, well-thought-out plans for communicating to retirees were a common theme in the success of both organizations. Communications are a key success factor for all employers transitioning retirees to a private Medicare exchange, regardless of whether they are public sector organizations or private companies.
Among the best practices for communications cited by the two counties include:
- Educate staff. Medicare exchanges offer individual Medicare supplemental and Medicare Advantage plans, and most retirees are used to traditional group health plans. Staff must be equipped to help retirees understand the differences and what it means to them.
- Prepare retirees. In addition to getting information on how the Medicare plans offered will change, retirees need specifics on how to enroll, where they can get help with decision-making and the timeline for the transition.
- Allow plenty of time. Retirees might be geographically dispersed and some might not use email. Because most communication will go through regular mail, employers need to leave enough time in their transition plan to ensure that everyone is ready by the start of the enrollment period.
- Leverage existing tools. Existing communications formats such as company newsletters or customized mailers have the added benefit of being familiar to retirees.
Although these suggestions are broadly applicable, it also is important to develop communication strategies that take into account the specific attributes of the region, industry, and organization.
To learn more about Cobb County and ACERA’s private Medicare exchange transitions, see the case study in Governing magazine.
September 10, 2015
According to the latest numbers from the Social Security Administration, 10,000 people in America are enrolling in Medicare every day. With more than 76 million baby boomers, this surge in enrollment likely will continue for the next 15 years.
Called the silver tsunami by some analysts, the aging of America is a cause of potential concern for Medicare, as it must be ready to accommodate the increased numbers in the program. But for employers who sponsor health insurance for their employees and retirees, it’s a reminder of an opportunity. Transitioning Medicare-eligible retirees to individual Medigap or Medicare Advantage plans is a strategy for keeping growth in the cost of providing health benefits down.
Employers have several options for making this transition. After their employees or retirees sign up for basic Medicare, employers can facilitate access to Medicare supplemental plans either through a private exchange or directly to health insurers that offer these plans. Either way, purchases of supplemental plans can be subsidized by employers through tax-advantaged health savings accounts.
September 7, 2015
On July 30, 2015, Medicare turned 50. In 1965, before Medicare was passed, nearly half of the elderly in the United States lacked health insurance. Today, just 2% of people over the age of 65 are uninsured.
In fact, approximately 55 million Americans were covered by Medicare in fiscal year 2014 at a cost of $505 billion. That’s a lot of money — and there are those who worry that the high cost of Medicare cannot be sustained.
However, the 2015 report of Medicare’s trustees shows that Medicare costs have levelled off, attributable at least in part to the passage of health care reform, suggesting those fears are unfounded.
One sign of Medicare’s sustainability is that spending has seen slower growth than other forms of insurance. According to Kaiser Family Foundation data, the annual growth rate for total Medicare spending dropped from 9 percent (2000-2010) to 4.1 percent (2010-2014).
This growth has been lower than what was projected primarily because of changes in the health system brought about by health care reform. The changes include payment and delivery system reforms that emphasize coordinated care, especially for people with multiple chronic conditions, incentives that reduce the rate of hospital readmissions, and a slowdown in payments to hospitals and private Medicare plans.
In addition to slower growth in spending, the trustees’ report also indicated that Medicare’s solvency has greatly improved since passage of health care reform. Medicare’s Hospital Insurance trust fund, which is one of the two trust funds specifically allocated by the U.S. Treasury to fund Medicare, will have a surplus of about $2 billion in 2015. Trust fund surpluses are expected to continue for another 8 years, or until the year 2023 — and the fund will remain solvent (that is, able to pay 100 percent of the costs of the hospital insurance coverage that Medicare provides) through 2030.
That’s good news for Medicare-eligible retirees — and for their former employers who have sponsored their health care coverage.
For the full 2015 Medicare trustees’ report, click here.
September 3, 2015
Time Inc.’s Executive Vice President and Chief Human Resources Officer Greg Giangrande is the recipient of the 2015 Benefits Leadership in Health Care Award by Employee Benefit News (EBN). The annual award recognizes excellence in the employee benefits/human resources field.EBA noted that, following its June 2014 spinoff from the Time Warner media conglomerate and under his leadership Time Inc. implemented “bold new health and wellness programs” for about 5,000 U.S. employees and their eligible dependents.
In particular, Giangrande oversaw a six-month transition to Towers Watson’s OneExchange, which gave employees more choice of plans and carriers as well as new choices in voluntary benefits such as dental, legal services and identity theft protection. Moving to a defined contribution model, Time Inc. also offered employees new options in tax-advantaged health savings accounts
Said Giangrande, “The more you take an interest in helping employees, the more engaged they become with your company. And the higher the engagement level with the employer, the better productivity you get, the better discretionary effort you get, the better loyalty you get.”
According to Jim Foreman, managing director of Exchange Solutions, throughout the transition Giangrande had “a clear vision and passion for what he wanted to deliver, and it was well executed.”
For more information on the details of the transition and Time Inc.’s commitment to empowering its employees, read the entire article in EBA.