Partners In Care’s experience with Health Benefits Designs is rather extensive.  We have had to become expert in both Fully and Self Insured Benefit Designs across all markets.

In most cases, everyone working on Benefit Designs is well meaning and in most of our experience, the process starts with lofty goals and objectives.

However, this process is many times the victim of conflicting pressures from employee advocates, financial advocates, and the ever present ticking of the clock with a looming renewal date.

With over seven years of experience in this regard, there are principles that we encourage everyone to follow:

• Begin with a Strategic View of a three to five year time horizon.  In many cases, the existing benefit plan is the result of incremental adjustments over the last decade.  Try to resist the temptation to “fix it all at once”.  This tends to lead to frustration.  Instead, begin the process about 30 days after the renewal date for the following year.  Spend two to three months with Employee, Executive, and Key Provider Focus groups.  Distill the results into Short (this year), Medium (2-3 year) and Long Term (3-5 year) changes. 

• Spend the second three month period of the current cycle in intensive data analysis and review.  Gain both a global and highly specific understanding of where each of your health benefit dollars are being spent and why.  This can and should be done at the benefit code level to assist in decision making.  Perform Detailed assessments of Employee/Plan/COB cost sharing relationships at each of the benefit code levels.  Do these patterns match the values and vision of the corporate leadership?  Many times the cost sharing results are fundamentally different from the intended effects.  Assess whether the special rules being put into effect, such as non-covered benefits, fee-schedule limitations, out of pocket maximums, and the like are achieving the desired effect.  Assess whether these rules are creating costs or distractions in other areas of the business. 

• In the third “Quarter” if you will, that third three month period of the year, leadership should contemplate intensive deliberations around the 3-5 key areas of change for the subsequent year.  Through this process, their values and priorities should be made clear to benefit managers and advisors.  Any key Vendor changes should be bid early in the third quarter to allow time for a six to eight week process.  Decisions should be getting finalized with about 3-4 weeks left in the third quarter (for 1/1 renewals, conclusion by August 31^st is a good goal).  This leaves the last month of the third quarter for the accurate preparation of printed and electronic materials.

• The last “Quarter” should be broken into three key segments: Orientation, Enrollment, and Implementation.  The first month should be dedicated to Intensive Orientation of the Employees.  The key to excellent Health Benefit Cost Management is a well oriented employee and enrollee base.  The time for Employees to learn about their benefits should not be after they become sick.  This is not unmitigated altruism.  All too often, appeals and overrides occur because Human Resources professionals must grapple with a crises of misunderstanding.  This spreads through the advisors, the administrators, and the providers of care.  Having everyone well oriented serves as an excellent loss mitigation tool.  The second month (rather than a 24-48 hour period) should be dedicated to the Employee Decision and Enrollment process.  These decisions are emerging as the second or third most important financial decision each family makes every year.  Enrollment processes need to reinforce the importance of these decisions by not rushing employees through them.  This can also have a profound effect on COB and other related enrollment cost savings issues.  The third and last month should be dedicated to an Administrator’s implementation of all collected enrollment material.  While executable within a week, this can lead to mistakes, missed cards, and employee complaints.  Allowing two weeks for implementation, the mailing of cards on or about the middle of the month, and two weeks for addressing the inevitable mistakes of lost cards, incorrect data loads, etc. for the 1% of the employees who have an issue will reduce frustration for all aspects of the system.

With a 30 day shake out period, the annual cycle can begin again.

Done properly, Data Warehousing and Critical to Quality reports are now embedded into the system.  The feedback loops to Advisor, Employer, and Employee are now entrenched into the system monthly.  Rational decision making with significant lead time based upon the facts specific to the individual employer will begin to drive less waste, more trust, and better understanding.  The overall health benefits goal of “attracting and retaining the best employees” is able to be realized by the benefit manager within the context of clear and unambiguous expense reports.

What we have seen when this cycle is properly deployed is that benefits can be tuned in such a way as to reduce overall spending while increasing the most important benefits to the employees.

With the transparency of the Six Sigma approach and well designed and explained cost sharing between Plan and Employees, Employees become more a partner in the spending process.  With the implementation of Shared Risk/Reward programs based upon Plan Expense and Clinical Quality (including incentives for pursuing Preventive testing) at the Plan/Employee and the Plan/Provider level, significant aligned incentives can be achieved.  With proper planning, these aligned incentives can also serve to substantially reduce the “friction” leading to increased costs for health benefit managers, benefit consultants, and benefit administrators alike.

• Keep a Strategic View over three to five years
• Build an Annual Process broken into four quarters
• Make significant investments of time in Orientation and Enrollment
• Focus on Data and Fact Driven Decision Making with the key Six Sigma Philosophies in mind at every step
• Evaluate "Friction" points to ensure they are maintaining an appropriate cost/benefit relationship when viewed comprehensively
• Make sure that the real results of the Employee Cost Sharing reflect the Intentions of the Benefit Plan
• Align Cost and Quality Incentives at the Plan/Employee Level
• Align Cost and Quality Incentives at the Plan/Provider Level
• Align Cost and Quality Incentives at the Plan/Employer Level