Saturday, September 23, 2023

With benefits Costs in a tight labor market

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Shreya Christina
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Joy Powell is the CEO of springbuk. Contact her about health information, data analytics and leadership topics.

In this precarious economic climate, most organizations are looking for ways to cut costs. The trick is to think of ways to save money without sacrificing productivity and quality of work. At the same time, the labor market stays tight— there are not enough qualified workers to fill the available vacancies. As competition for talent is fierce, business leaders must strike a balance between cutting costs and continuing to offer competitive advantages.

Educate employees to help them get the most out of their benefits.

Perhaps the most effective strategy organizations can use to control costs is to educate their employees about their benefits. During the Covid-19 pandemic, organizations have expanded their benefits offerings, creating a situation where some workers may have access to services they are not even aware of, while others may not use the benefits efficiently. Companies can take steps to reduce costs by regularly training employees, not just during onboarding. Here are a few areas where employee training efforts can be focused.

1. Ensure employees have access to the care they need.

If employees know where, when and how to receive care, the costs are lower. That’s because most ad hoc care solutions are expensive and inefficient. For example, imagine if someone went to the emergency room every time they got sick instead of visiting their GP. By educating people about the best strategies for accessing care, they are more likely to visit the most cost-effective facilities for the specific care they need.

In addition to knowing where to go for different types of care, organizations can control costs by educating employees about other services available to them through their benefits. For example, the benefits of Expert Medical Opinion allow people to ask questions and get advice from clinicians without having to book a doctor’s appointment. Likewise, telehealth options are expanding and offering an additional cost-effective solution, although it’s important to remember that some employees may not be able to use this service if they don’t have high-speed internet access.

As leaders prepare their benefits offerings for 2023, it’s important to remember the people who will use those benefits and ensure they have the information they need to make informed decisions. This will help to optimize benefits.

2. Identify waste and restructure the offer accordingly.

A benefits package may look great on paper, but without careful assessment, organizations can end up putting resources into services that won’t be used.

The first step in assessing the benefits is to learn about the impact of each supplier’s offerings, especially what kind of health outcomes you can expect and at what cost. This allows leaders to evaluate every factor that affects people’s health outcomes. If a particular option is not used or does not produce positive results, it is a clear sign that change is needed.

Leaders also need to point solutions, which often help people address a single medical need. The problem is that the more point solutions organizations use, the greater the risk of overlapping and ultimately wasting resources.

Finally, leaders should evaluate their wellness programs. Do people use them? Are there trends among the participants? Do they deliver positive health outcomes for participants? By answering these questions, leaders can measure the effectiveness of their programs and make informed decisions.

3. Assess the expenditure on medicines.

People in the United States spend more on prescription drugs than their peers around the world—$1,126 per capita compared to $552 per capita in the rest of the world. Insurance companies pay approx. 82% of the cost of drugs in the US, and those costs play a major role in determining the price of employee benefits. To help control costs, leaders can ensure their benefits package is designed to help people get the drugs they need as efficiently as possible.

The first step leaders can take is to review their benefit plans, paying particular attention to their Pharmacy Benefit Managers (PPE). You may not have heard of PPE, but they play a huge role in determining how much organizations spend on drugs.

Then find out how the benefits programs cover special medicines (paywall) – which are considered particularly expensive or very complex – as well as biosimilars, as they can have an excessive impact on spending.

After identifying these factors, leaders can begin to use the knowledge they have gained from reviewing their benefit plans and act on tactics and strategies. For example, here are a few common strategies that you decide should be implemented.

• If a therapeutic equivalent is available, encourage members to switch from the branded drug.

• Evaluate your biosimilar policies and, where possible, provide incentives to encourage members to use them instead of biologics.

• Provide resources and assistance to help members communicate and educate about the efficacy of biosimilar drugs.

Take a holistic approach to benefits.

Our view of benefits has changed in recent years. During the pandemic, people needed more benefits and employers had to offer better packages to compete for talent.

Today we find ourselves in a challenging environment: money is tight, healthcare is complex and employers must continue to compete in a tight talent market. But considering all of these points together can help organizations achieve better health outcomes while reducing costs and providing competitive advantages. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

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