Before COVID-19, US-based companies had a fairly repeatable way to forecast healthcare benefit costs. But the pandemic—and the resulting choice of many people to defer medical treatment in 2020—has upturned everything. While claims spending has been down for many organizations since March, experts anticipate a deferred healthcare deluge next year.
The Centers for Disease Control and Prevention estimates that as of June 30, 2020, an estimated 41 percent of U.S. adults delayed or avoided medical care because of concerns related to COVID-19. That includes routine, urgent, and emergency care. No wonder the U.S. medical community is preparing for what will likely be an onslaught of doctor appointments and scheduled surgeries, as well as unanticipated urgent care and emergency room visits, in 2021. But medical professionals aren’t the only ones who should be looking ahead. Your benefits program also needs to plan for an uptick in utilization—and do everything you can to protect both your budget and your employees’ health by guiding them to high-value, low-cost healthcare choices.
Healthcare spending: what to expect in the coming year
When it comes to health benefits usage and expense, 2021 is likely going to look a lot different than 2020. Although COVID-19’s impact on utilization will vary from company to company, The Wall Street Journal reports that health benefits costs for companies that purchase a policy to cover employees’ healthcare claims are expected to rise by 8.1 percent in the 2021 calendar year as people rebook medical appointments they postponed.
This period of economic strain and uncertainty adds another challenging layer to the already complex responsibility of managing employees’ healthcare costs. But knowledge is power. Equipped with the right information, your program can plan for the uptick in claims, strengthen your company’s financial position, and promote and protect your employees’ health even during turbulent times.
How to prepare for 2021 healthcare spending when things are still in flux
An analysis published by Willis Towers Watson in September 2020 encourages employers to pay special attention to the impact of COVID-19 on their healthcare spend so they can respond to the rapidly changing healthcare market landscape and shifting needs of their workforce. But what exactly does this look like?
First, consider what not to do. Harvard Business Review encourages employers to avoid short-term fixes like raising copayments, deductibles, and other out-of-pocket costs for employees. This approach disincentivizes employees to seek preventive care, which in the long run can lead to worse health outcomes for employees and their families and drive much higher costs.
Instead, your organization should proactively explore and embrace the many high-value, low-cost healthcare choices available as part of your benefits package—then educate (or re-educate) employees on how to make the most of them.
Embrace the power of healthcare technology
One of the positive impacts of COVID-19 is that employees have been much more willing to try digital healthcare options they might not have used in the past. From wellness visits to ongoing chronic care management, many physicians and patients have become comfortable with nontraditional healthcare methods that don’t require in-person visits.
Telemedicine is one benefit that’s seen a big uptick in adoption in 2020. The Commonwealth Fund, a private foundation that supports independent research on healthcare issues, reports that telemedicine usage peaked in April 2020 but continues to be well above the prepandemic baseline. With the recent resurgence in COVID-19 cases and the start of cold and flu season, telemedicine will continue to be an important benefit for employees who want to get care without going to a clinic in person.
Additionally, while people continue to defer non-urgent health appointments, tech-based healthcare benefits like chronic condition management apps, virtual mental health programs, and digital physical therapy solutions can help employees stay on track with their health goals, even if they’re not seeing a doctor in person.
Guide employees to cost-effective care settings
As employees start to feel more comfortable returning to in-person care, it’s important to help them use appropriate care settings for their health needs to avoid unnecessary claims costs. Here are a few tips you can share with employees to help them get the right care from the right provider at the right time:
- Encourage your employees to stay in-network, which helps avoid expensive bills that aren’t covered by their health plan. In fact, approximately 10 percent of total costs for a typical employer go to avoidable out-of-network charges, adding up to millions in overspending every year.
- Give employees a way to find high-quality, cost-effective inpatient care options for scheduled procedures.
- Promote cost-effective, in-network imaging facilities. Imaging procedures such as MRIs, X-rays, CT scans, and ultrasounds account for about 8 percent of the average employer’s annual healthcare spend. Shifting care from hospitals to freestanding imaging clinics can add up to big savings for you and your employees.
- Educate employees on when to use urgent care and primary care instead of the emergency room. ER visits come with a much bigger pricetag and often result in a worse experience for employees.
- Help employees identify the right facilities for outpatient care. For example, an ambulatory surgery center may be a more cost-effective option for ACL surgery than a traditional hospital setting.
Note: A digital healthcare guidance solution can make your job much easier by pointing employees in the right direction in the moment they’re searching for care.
Provide educational resources to support employee healthcare decisions
Of course, along with identifying areas to manage your healthcare spend, it’s equally important to educate and encourage employees to take advantage of the best care options available to them. Only about one-third of employees have a solid understanding of their healthcare options, according to the International Foundation of Employee Benefit Plans. Confusion and concerns surrounding COVID-19 can make for an even murkier landscape. That’s why it’s essential to educate employees on your company’s healthcare options and develop a long-term engagement strategy to drive utilization of your benefits. You can do this by:
- Creating an exclusive, well-organized intranet or benefits portal. Post health plan options, necessary forms, links to benefits and resources, enrollment calendars, and any other information that might be helpful.
- Using a multilayer approach to communicating benefits information. Create a year-round educational campaign that includes emails, fliers, instant message reminders, webinars, and workshops where employees can learn about their health benefits and ask questions.
- Generating a healthy feedback loop. Set a clear expectation that employees can (and should) ask questions and share feedback with your team. Encourage them to give constructive critiques on everything from your healthcare offerings to how those offerings are presented.
Preparing your health benefits strategy for 2021 may be more challenging in light of COVID-19, but it’s also an exciting time to drive engagement with your existing healthcare options and explore ways to manage healthcare costs for you and your employees. By investing in the right programs now and guiding employees to make smarter choices, you can ensure everyone gets the care they need next year while keeping your program on track.