Health Plan Tools: Assess Your Investment

September 20, 2022

Widely provided as features of an employee benefits program, tools for finding healthcare providers and managing costs promise value to employers as well as employees. That’s why they’re so common – offered by 80% of all businesses that participated in the 2022 Alera Group Benchmarking Survey, in the case of find-a-doctor tools, and by 52% of participants when it comes to health-cost estimators. 

These tools are intended to benefit employees by helping them manage the quality, convenience and cost of care. They can benefit employers by keeping their workforce healthy, containing company healthcare spend, and providing incentives that help attract and retain a talented workforce. 

But how effective are they? While many of these products are of excellent quality, they also tend to be expensive. Moreover, health plan tools are of value only if employees actually use them and experience positive outcomes.  

In today’s highly competitive labor market — and amid the never-ending challenge to curb costs — employers need to ask themselves whether they’re investing in health plan tools wisely or whether they’d be better offering benefits employees are more likely to utilize and appreciate. 

Cost Estimators Vs. Price Transparency Tools 

Since January 1, 2021, hospitals operating in the United States have been, in the words of the federal Centers for Medicare & Medicaid Services (CMS), “required to provide clear, accessible pricing information online about the items and services they provide in two ways: 

  1. As a comprehensive machine-readable file with all items and services. 

  2. In a display of shoppable services in a consumer-friendly format.” 

For an example of how hospitals comply with this requirement, here’s the cost-estimator webpage for one healthcare provider, the Pennsylvania integrated system WellSpan Health. 

While cost estimators can be helpful, price transparency tools — offered by 45% of employers who responded to the Alera Group Benchmarking Survey — do a more comparative assessment, providing the price for services at multiple facilities. Some of these tools look only at price, while others incorporate quality metrics to rank the cost and performance of the hospital and/or service provider, with the ability to drill down to Current Procedural Terminology (CPT) codes, diagnosis codes and service bundles.  

Since July, Health Insurance carriers also have been required to comply with federal price transparency rules, and some have built tools into their member portals. But carrier versions often provide a broad range of costs without factoring in quality of care, and some are cumbersome and confusing, as National Public Radio (NPR) recently noted in its July 27 report “Health insurance prices for care are now out there, but finding them is an ordeal.” A price transparency tool from a standalone vendor is likely to provide a more complete and user-friendly report, potentially making such a benefit attractive — and effective — as an employee benefits point solution.  

In the case of a South Carolina woman recently billed $18,000 for a breast biopsy, a quality price transparency tool might have helped her save thousands of dollars and avoid a lot of time and frustration. 

Widespread use of a price-transparency tool can save employers, as well as employees, money not only by reducing the cost of care but also by encouraging employees to get care that prevents more urgent – and more expensive – treatment down the road. In other words, if you lower cost, employees are less likely to avoid care, including care that can result in early detection of heart disease, diabetes, cancer and other serious illness. 

Cost-Effective Alternatives 

What employers need to determine is whether investing in a product such as a price transparency tool from a vendor is cost-effective. If the tool is introduced properly, use is widespread and demonstrable, positive results are achieved, then, yes, such a product may be a good investment. 

But employers too often pay for tools that go unused, and it may be that money spent on them would be better spent on a benefit that would directly impact physical or mental health. Paying for an employee’s Peloton bike or Headspace subscription, for example, could be a more cost-effective point solution than providing a cost estimator that is not highly utilized.  

According to the Centers for Disease Control and Prevention (CDC), “Using worksite wellness programs that promote physical activity can help you create a healthier workforce, which can mean lower health care costs for both you and your employees.” 

The CDC goes on to say, “Worksite wellness programs can also: 

  • Increase employee productivity; 

  • Reduce absenteeism; 

  • Increase employee morale;  

  • Help you attract and keep high-quality employees.” 

Research supports those assertions. In its article “The Five Benefits of Workplace Fitness Culture,” Corporate Wellness Magazine cites a University of Michigan studies that determined, “Employers who emphasize fitness can save an average of: $1,100 a year for every employee who stops smoking, $1,200 a year on employees who lower their cholesterol levels from 240 mg to 190 mg and $177 a year for each worker who sheds enough pounds to move from obesity (more than 30 pounds overweight) to a healthy weight.”  

Analysis by Vital Incite has shown that offering gym membership or a personalized training program is more effective at improving diabetes management than programs designed specifically for that purpose. And even people who rarely exercise are likely to value a high-performance stationary bike funded by their employer, especially if the benefit is complemented by a workplace program incorporating a fitness-related social platform, such as Strava. 

At a time when unhealthy lifestyles are a primary reason why Americans between the ages of 18 and 34 are experiencing chronic health conditions, according to the CDC, incentivizing employees to take better care of themselves may be an advanced healthcare strategy that ultimately reduces your company’s healthcare spend while increasing employee health and productivity. 

What Your Peers and Competitors Are Doing 

Key findings from Alera Group’s benchmarking survey include: 

  • Retention and recruitment are the top human capital management challenges; 

  • Cost containment is a key motivator for plan design changes; 

  • Employee health and productivity benefits are critical. 

As we approach open enrollment season, how your company designs its benefit program depends on multiple factors, including the size of your organization, the industry it’s in, where you’re located and more. Benchmarking can help, especially when combined with expert data analytics to determine how cost-effective — or wasteful — individual offerings are. To gain a better understanding of what your peers and competitors are offering their employees and compare their benefit programs to yours, read the Alera Group 2022 Benchmarking Survey Report. 


About the Author  

Mary Delaney, MS PT, CWP  

Managing Partner  

Vital Incite, an Alera Group company  

Since founding Vital Incite in 2013, Mary Delaney has served not only as the company’s chief executive but as an industry though leader, bringing fresh perspectives to the world of employee benefits. Having spent 23 years on the provider side of the healthcare industry as a physical therapist provides her with the unique ability to see the big picture in healthcare and develop outside-the-box strategies and solutions, with particular expertise in wellness solutions, disease management, utilization management and clinic integration. Armed with better understanding of the health and financial challenges that a specific employer is facing, she develops integrated strategies that include wellness program design, healthcare benefit utilization and employee communication. These strategies are designed to help employers and employees better manage medical expense by improving employee health outcomes.  

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The information contained herein should be understood to be general insurance and employee benefits brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such. Statements concerning financial, regulatory or legal matters are based on general observations as an insurance and employee benefits broker and may not be relied upon as financial, regulatory or legal advice. This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.