Self-Funding Series: Managing School District Consumerism & Wellness

Article 3 of 4: Managing School District Consumerism and Wellness

Self-funding is rapidly moving into school districts of all sizes as a major cost-control strategy. And why not? Districts that self-insure can design their own plans and tailor them to meet their employee’s needs, all while eliminating those features with little utilization. All signs indicate that self-funding your plan can yield significant savings for stable groups from 30 employees and up.

As adoption grows, cost-reduction strategies in self-funded environments are evolving as well. In this article series, Jason Rushton will share 4 top ways that your school district can take advantage of the trend.

Managing School District Consumerism and Wellness

In a self-funded environment, the benefits of consumerism and wellness plans can be fully realized because of the flexibility in plan design. An overall improvement in employee health can lead to an immediate reduction in claims, which feeds back into the organization’s reserve fund.

Consumerism

The goal of a consumer-driven plan is to help empower employees to make daily healthy choices and improve their decision-making skills when making health care decisions. Traditional Health Insurance plans do little to encourage a consumer-focused approach in health care spending – participants have no incentive for choosing low-cost providers or shopping for the lowest price prescription drug. This lack of consumerism can create runaway claims that drive premium increases.

One plan design that encourages consumerism is a High-Deductible Health Plan combined with a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA). Because your employee is motivated to save and accumulate the money in the HSA or HRA, this encourages them to shop around when searching for the best pharmacy price, choosing a low-cost provider, eliminating duplicate tests and considering alternative treatment.

For a plan like this to succeed, employees need to feel empowered, engaged and supported when making these decisions. There is a balance between providing a consumer-directed plan and supporting employees to make these decisions they may not be used to making. The employer’s role in consumerism is to encourage employees to be better consumers by providing employees with the tools, resources and incentives they need to make cost-conscious decisions.

Services such as a medical concierge are cost-efficient ways to help employees be confident in selecting a doctor, communicating with medical providers and managing medications, as well as understanding the importance of preventative exams and assessing treatment options based on cost, risk and benefits.

Wellness

Implementing a wellness plan within the workplace is becoming very popular, but does it work to lower premiums?

A 2013 RAND study showed that most wellness programs are ineffective and suffer from low participation rates of less than 24%. So if wellness programs are so great, why are so many of them not working? The answer is in the planning, strategy and execution. For example, plans that lack strategic planning and communication, as well as those that lack hard metrics and relevant incentives can be ineffective. On the other hand, well thought-out, strategic programs have been proven to work.

1. Reaching Out To High-Risk Employees High-risk employees may be the most reluctant to engage in wellness programs, but need it the most. Their healthcare costs are 100-500 times greater than average. Find ways to slowly reach out to them and make it safe for them to participate.
2. Provide Incentives and Surcharges Using incentives and surcharges - whether large or small – can give employees a concrete, immediate reason to improve their own health. This will help to boost morale and keep employees motivated to participate. Some examples of incentives include a subsidized gym membership; a small gift (water bottle, t-shirt) if an employee participates in a wellness program (exercise class, weight loss program, etc.), recognition for finishing a race, etc. A premium surcharge for tobacco is also designed as an incentive to encourage employees to lead a tobacco-free lifestyle.
3. Focus On Short-Term Benefit Programs Although it’s important to tackle issues such as losing weight and smoking cessation, the financial savings of those programs are realized long-term. Wellness plans can also focus on programs that will have more immediate (6-12 months) benefits like disease management, disability return-to-work programs, increase seat belt usage or improving prenatal care.
4. Appropriate Level of Care Options Unnecessary physician visits and inappropriate level of care (i.e. emergency room visits when urgent care is more appropriate) can wreak havoc on your claims experience, thus driving up premiums. One of the most consistent return-on-investment happens when employers offer alternative options for minor, acute issues. Nurse-on-line programs, medical concierge, over-the-counter tests and self-help guides are just a few of the options. The growing fields of telemedicine (whereby patients can call a physician and get treated without physically being present) or online symptom profiles (patients enter their symptoms and the system diagnoses common ailments, or refers them to a physician) are also promising self-care options.
5. Low-Cost Wellness Options There are many wellness options that don’t cost employers much to implement. For example, offering healthy snacks in the cafeteria or vending machines, implementing a no smoking policy at work, a shower installed to encourage lunch hour exercise, no sweets policies or providing a quiet room to de-stress.
6. Remember Mental Health A mentally healthy workforce is strongly associated with lower overall medical claims, lower absenteeism, increased productivity and decreased disability costs. Depression, alcohol and substance abuse cost calculators can be found online and can help you see how much these problems are costing you. But what can you do? Implementing and promoting your Employee Assistance Program (EAP) program is only one step. Other steps you may take include:

Conducting an employee awareness and education program about depression, anxiety and substance abuse

Educate supervisors to watch for signs of mental illness

Offer mental health screening

Collaborate with local providers and clinics

7. Involve Family What about the employee’s family members that are also covered by your health plan? They may account for up to 70 percent of your claims. By including the rest of the family in health screenings, contests, incentives and acute care options, health care costs can reduce even more. Sending communication materials, self-help guides, etc. to the employee’s home is another way to involve the family.

Because of the flexibility in plan design in a self-funded environment, the savings from both consumerism and wellness plans can be fully realized. Educating employees how to use a health savings plan in combination with a new high deductible plan is a win for both the employee and the employer. And marrying this to a well-designed wellness plan not only optimizes the savings but is also the right thing to do for employees.

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