Key steps to control company healthcare costs
Any company with an employee healthcare plan knows that healthcare is expensive, and many are looking for ways to reduce their healthcare costs while still caring for employees and their families. These three key steps can help your company better understand and control healthcare costs.
Know your data
The most important step to controlling costs is to know what you’re paying for. Are their hidden fees in your current plan? Is your plan paying for multiple higher-cost medications when a generic option should work? To what extent are your employees utilizing their healthcare benefits?
Regardless of what healthcare model your company uses, be sure to ask about fees, rebates, formularies, surgery costs, and other expenses. While healthcare costs continue to rise, there’s also an increasing demand for more transparent pricing. Some doctors, surgery centers, and pharmacy benefits managers now offer upfront transparent pricing so you can better understand and manage your healthcare costs.
Explore self-insured or direct primary care options
The self-insured (also called self-funded) model is a great option for employers who want better cost control. In this model, the employer assumes financial risk for providing healthcare benefits to employees. Instead of paying a fixed premium to a health insurance company, the employer controls the decision on provider contracts. They pay directly for employee health claims and can better customize the plan to meet employee needs.
Typically, self-funded plans are best for larger employers, while smaller employers might want to explore direct primary care options. In direct primary care, employers pay a fixed monthly fee for a defined range of primary care services from a specific physician or small network of physicians. This approach helps control a portion of healthcare costs, though a supplemental plan for major medical expenses and prescriptions may still be needed.
Evaluate prescription benefit coverage
Pharmacy costs are a significant portion of any company’s healthcare expenses. A plan’s formulary specifies the member co-pay for different tiers of medications, with generic drugs in the lower tier and more expensive drugs in higher tiers. As the benefit provider, you should have options on what drugs are covered under your plan and at what tier. Your pharmacy benefits manager (PBM) can work with you to customize the formulary to better meet your needs.
Step therapy programs are another way to save by ensuring patients start with clinically proven, cost-effective drugs. If a lower-cost medication isn’t effective, their doctor can submit a request for approval of a higher-cost drug. Using a step therapy program saves both the company and the employee money. For high-cost specialty drugs, you may be able to utilize manufacturer assistance programs to further reduce costs.
Healthcare is an investment in your employees and the future of your company, but it’s also a significant expense. As a transparent pharmacy benefits manager, MaxCare helps companies in Oklahoma and more than 30 states better understand their healthcare data and create a prescription benefits plan that works for them.