Go beyond cost, access in choice of health plan

by Mark B. Whiting

for the Business Journal

Until recently, most employers have used two key factors when evaluating managed health care plans cost and access. The big questions asked were, "How much will it cost?" and "Are my doctor and hospital in the plan?" Quality issues, all too often, were ignored or were deemed too difficult to measure.

Fortunately, that's changing. Better quality data is now available, and employers today are taking a far more comprehensive look at their health care options. They're asking a new question, a question that goes straight to the company's overall business strategy: Does this plan add value to our organization?

Before that question can be answered, a company must set objectives for the plan in terms of both business and work-force needs. These needs vary dramatically among employers today. Without developing a formal set of objectives, an employer may be limiting the value that can be gained through its benefit plan.

For example, a retail operation with relatively young employees and a high turnover rate may be most interested in providing coverage at the lowest possible cost. Wellness programs for this work force may not be as valuable to the organization or to the employees the company recruits.

On the other hand, a heavy manufacturing company with a stable work force could have employees on its health care plan for decades, even into retirement. For this company, preventive programs aimed at keeping employees and their dependents healthy could be far more important.

No two companies will have the same priorities. So, there's no blanket answer to the question, "What's the best health care plan?" The true value of any plan depends on how well it meets your company's specific goals and objectives.

Once those objectives are established, you can effectively evaluate the many available options. To simplify the process, William M. Mercer Incorporated has developed a value model based on six key elements. This approach blends the traditional two criteria cost and access with other relevant quality measures to create an overall sense of the value the plan provides.

?Access. The availability of providers and services remains an important issue. Consider access to adult medicine, pediatricians, OB/GYNs and hospitals. What percentage of physician offices are closed to new patients? What's the ratio of plan members to primary care physicians?

?Care management. How well does the plan deal with employees and dependents who are sick? What's the rate of hospital days per 1,000 employees? What's the C-section rate? What is the percentage of admissions with unplanned readmission within 30 days?

?Cost. This includes more than the premium cost. What is the average hospital cost per day? What is the total per-member, per-month charge for hospitals, physicians and administration?

?Health management. The best way to contain health care costs is to avoid getting sick. What does the plan do to help keep members healthy? What percentage of children are immunized? What percentage of women enrolled get regular mammograms and Pap tests?

?Plan management. How well is the plan run? Industry standards such as the plan's NCQA and HEDIS ratings can serve as a guideline. What new programs are being added to ensure that the plan remains contemporary?

?Satisfaction. Employers and employees are satisfied by different things. An employer needs necessary reports in a timely manner, along with updates on network changes and renewal information. Employees want their calls answered and their referral requests handled promptly. What's the overall patient satisfaction rate? Is patient satisfaction feedback given to physicians?

As you review these elements, weigh the overall importance of each criteria against your company's objectives. Remember the key question: Does this plan deliver value to our organization? Don't be swayed in the final moments by a plan that comes in $5 less expensive. You can always find a less expensive plan, but cost is only one of the value elements; rarely is it the most important.

While the process of evaluating health care plans can be time-consuming and intense, the benefits are clear.

Employers gain the confidence of knowing they have selected the right plan, based on meeting objectives established with the corporate strategy in mind. The evaluation process also provides a baseline for later comparisons as the selected plan is monitored.

For employees, the evaluation process helps ensure them a high-quality health care plan, chosen by the company for reasons beyond the bottom line. This is no longer a benefit decision based solely on cost and access; this is a strategic decision, based on meeting the needs of both the work force and the business.

(Mark B. Whiting is a principal in the health care and group benefits consulting practice of the Kansas City office of William M. Mercer Incorporated.)

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