Question

cost control strategies for self funded health plans for provider networks

Answer 1

Large increases in health-care costs can make it difficult to balance a budget, but at the same time, health-care benefits are pivotal in attracting and retaining qualified staff. This best practice provides an overview of some of the best strategies for budgeting, managing, and containing these costs while still promoting a healthy and skilled workforce.Governments need to closely monitor health-care costs and choose approaches that make use of the jurisdictions purchasing power, share costs appropriately, encourage good consumer behavior, promote health, and support governmental jurisdictions ability to hire and retain a highly qualified and motivated workforce. The GFOA recommends that governments examine the following primary strategies for managing employee health-care benefit costs more effectively:

Monitor Medical Plan Provider Network and Prescription Drug Discounts. Groups of physicians, hospitals, and other health-care providers agree, through the jurisdiction’s insurance carrier or third-party administrator, to provide medical services to the organization’s employees at discounted costs. Employers need to verify that these providers produce the best outcomes at the lowest price and to challenge their insurance carrier or third-party administrator to demonstrate that they have contracted with providers that produce quality outcomes. Periodically reviewing the provider network discounts that have been negotiated on the jurisdiction’s behalf will allow the jurisdiction to find the deepest discounts. Also, because there are many types of discounts for prescription drugs, plan sponsors need to make sure they understand what is available (e.g., discounts for generic drugs, brand-name drugs, and for retail and mail order transactions). The organization may also benefit from rebates provided by drug manufacturers.

Set an Appropriate Level of Cost Sharing with Employees. The plan needs to be designed in ways that help employees better understand the trade-off between increasing health-care costs and other forms of compensation. Employers can also share a larger percentage of the cost for lower-cost plans as a way of making them more attractive. Copayments, deductibles, and co-insurance should be set at levels that encourage employees to use the services and prescription drugs that are most likely to produce the best long-term outcomes. It is also possible to set cost-sharing targets for the employer and employee share of medical services and prescription drugs.