June 9, 2016

Why We Decided One Plan Is Better Than Four

By KnovaSolutions, Clinical Prevention Service

For this year, Alliance Benefits participants saw a new approach to healthcare plans: One choice instead of four. Why did we do that?

Well, the research data from our partner HCMS Group was just overwhelming. HCMS is a unique company that combines advanced data analytics on healthcare and other benefits with a clinical prevention service (KnovaSolutions) to help patients and their families make smart decisions about treatments and medications.

On the data research side, HCMS studied health plan design and human behavior for more than a decade. The results showed that employers offering a single healthcare plan that’s designed to encourage prevention and discourage waste wind up saving money for everyone while providing the opportunity for improved health. The more money spent on healthcare, the less money is available for ministry. We all need to be good financial stewards.

Here’s what HCMS found in one before-and-after study.

The graph shows two years of health plan costs per member when an employer provided a choice of three benefit programs. In the third year, the employer offered a single healthcare plan that was designed to cut down on healthcare waste (overtreatment and over-testing by providers, as well as risky overconsumption by patients, with narcotic pain medications at the top of the list). The reformed health plan also put more emphasis on primary care, which has been shown to improve health.

Bottom line: Total healthcare costs (for the employer as well as the employees) fell by 20 percent, instead of rising for a third year. Meanwhile, there were fewer ER visits, less time in the hospital, and less spent on drugs, and an increase in use of primary care and other prevention services.

For Alliance Benefits, these findings and the HCMS approach to benefits design were a lifesaver. Our old approach with four plan options was financially unsustainable.  We’re hopeful that the new approach will continue to provide quality care for the Alliance family while decreasing plan costs.

(For more on what HCMS research shows about the problems associated with multiple health plan offerings, click here.)


Posted in: Health Plan Tools