By Tim Charles / Health Care CEO
Employers are challenged to implement strategies and look for opportunities to play a significant role in reducing the rising costs of health care. National health expenditures per capita have been in a steep incline since 1960. Companies now pay 20 percent more toward employee health insurance benefits than they did just five years ago.
But employers, like Mercy Medical Center, are not the only ones feeling the pinch. U.S. workers paid 47 percent more in 2010 than they did in 2005 for the family health coverage they got through their jobs, while their wages increased only 18 percent.
Mercy Medical Center and MercyCare Community Clinics have made significant headway in controlling costs per employee by regularly updating benefit designs and initiating a wellness program in 2005. The program has been refined over the years with remarkable results: risk factors among employees are declining, with the average risk factor per person in down to 1.78 in 2011, from 2.09 in 2005. For 2013, the incentive was raised to a 30 percent reduction in employees’ medical premiums.
This strategy is beginning to be successfully replicated at various levels at other area businesses. In the past fiscal year, Mercy’s Business Health Solutions provided wellness services in 30 local companies performing nearly 6,000 health risk assessments and biometric screenings.
Business reasons for wellness programs include: higher employee retention due to increased job satisfaction; increased productivity and fewer sick days; and they are a good recruiting tool.
In 2007, Mercy introduced incentives for employees to purchase generic drugs. At that time, 58 percent of our drugs were generic; today that number is 88.5 percent. We continue to encourage employees to utilize the convenience of our Employee Pharmacy and have transitioned from a fixed co-pay to a percentage co-pay.
Another strategy was to adjust co-pays for Emergency Room visits, from $100 to $150, to encourage employees to seek more cost-effective services through primary care providers or urgent care facilities. A primary care quality network partners primary care physicians who focus on and measure quality, value and patient satisfaction.
Another successful part of the solution is to offer employees the option to put money into health saving accounts (HSA), which offer the advantage of higher deductibles with lower premiums than more traditional plans.
Hiring a human resources consulting firm to audit Mercy’s medical and dental plans resulted in the removal of 206 ineligible dependents from our medical and 303 from our dental plans, with a savings of $800,000 per year.
The Mercy Employee Health Center opened in October 2011 as the area’s first onsite employee health center to serve Mercy employees and their families. Employees may utilize the center for work injuries that do not require emergency care, preventative wellness, health coaching and other healthcare needs. This model of employee healthcare may be integrated into any business seeking ways to improvement employee health and wellness.
Realizing that 15 of our employees and covered dependents represented almost $600,000 per year in medical claims, we instituted a voluntary program designed to improve their quality of life while reducing costs both for them and Mercy. Potential participants are employees and covered dependents with chronic disease and/or high medical claims – those most in need of our support. Specially trained care coordinators help identify and remove barriers (driving to appointments, covering co-pays, etc.) and help them learn how to manage their care.
Reducing health care costs is dependent upon an on-going commitment, willingness to try new things and continued development of current programs by layering in initiatives and benefit plan design strategies. Also, programs and benefits should be deployed to address the various health needs.
This is a culture change for many employers, but engaging and educating all employees leads to long-term dramatic results, albeit with a slower ROI. Focusing on employees with chronic disease and/or high medical claims offers greater opportunity to improve quality of life for the employee and reduce the employer’s medical expenses.
Health Care Contributions Chart pg14 Health Care ReductionChart pg15
Tim Charles is president and CEO of Mercy Medical Center