One employer’s solution for managing
increasing health care costs.
want to save
Throw in external variables such as health care costs,
and it’s easy to understand why your juggling act has
become more challenging in the last decade.
It’s no surprise to you that health care costs are
increasing—but do you know how much? Employer
and employee health care costs have more than
doubled in the last 10 years.1
Because of this, many human resources professionals
are looking for creative solutions to continue to
meet the needs of their two audiences. It turns
out that it is possible to make both sides happy.
Cambia Health Solutions found the
answers with HealthSparq.
: : : : : : : : : About Cambia Health Solutions
Cambia Health Solutions comprises more than 20 companies (including HealthSparq), which are all dedicated to transforming health care by creating a person-focused and economically sustainable system. Based in Portland, Oregon, Cambia has six health plans in four states, providing insurance to more than 2 million people; they are proud to offer best-in-class member satisfaction as measured by Forrester CXi.
You’re probably a pretty good juggler. As a human resources professional,
you’re likely used to juggling the needs of two totally different audiences.
You have to be a good steward of the company’s budget while also
Provided tools that engaged employees
Demonstrated company-wide support
Since 2007, Cambia has offered high-deductible health plan options to its more than 5,000 employees. The company’s leadership team decided that if they wanted to be a driving force behind health care consumerism and market sustainability, it was time to walk the walk. That is, if they were going to ask their employer groups to switch to high-deductible plans, they needed to ask their own employees to make the move first. After seven years, growth in high-deductible plan enrollment was progressing at a satisfactory pace, but the team thought there was room for more improvement.
Cambia knew that with the ongoing changes in health care, the emphasis on accountability within their own corporate culture, and the increasing costs associated with traditional plans, they could have a significant impact on open enrollment for 2013.
You’re probably wondering what made it a good time for Cambia. What gave them the confidence it was time to move the majority of their employees to high-deductible plans? Seven years ago, it was difficult to find information to help employees change their behaviors. By 2013, there were tools to empower employees.
Plus, employee psychology had changed. People were shopping on the web for everything from paperback novels to new cars, expecting online resources for just about everything. So why not health care?
Finally, Cambia’s motivation was different than when high-deductible plans were introduced to the industry 10 years ago. Cambia wasn’t trying to save money by passing the costs to employees; they were looking for behavior changes that would net savings and lower costs over the long term for the company, their employees and the health
Cambia’s team knew they had to build a strong case for employees. They had to teach them not only how high-deductible plans worked but also how they and their families could benefit from them. They had to dispel the myths associated with high-deductible health plans and create a movement that made employees feel empowered without compromising their coverage.
Communicated benefits to dispel myths
So how did they do it?
—AHIP, July 2014.
As of 2014, nearly 17.4 million Americans were
covered by health savings account-eligible
insurance plans. This is an increase of nearly
12 percent since 2013 and speaks to their
usefulness and popularity when paired with
One of the biggest problems with high-deductible plans is the perception people have about them. Employees think they’re the employer’s way of shifting costs to them. Typically, because employees don’t understand how the plans work, they fear them.
To dispel the myths and replace them with truths about high-deductible plans, Cambia launched a comprehensive communications campaign that focused on how the high-deductible plans would benefit employees. They distributed information through their intranet, email blasts, home mailers and events, such as town halls, where they took questions from employees and distributed written responses.
Human resource advisors had one-on-one meetings with employees to answer specific questions and walk employees through the transition and how it would affect them and their wallets.
They also produced video testimonials with employees and company leaders explaining their experiences with high-deductible plans.
To really make the message resonate with employees, Cambia leadership made the effort front and center in their employee communications. Everyone involved in the high-deductible plan campaign knew it couldn’t be a human resources initiative; it had to come from the top down. Leadership talked about it in meetings, endorsed it and made it a high-priority focus.
Education was essential to making the health savings account option appealing.
Cambia found that the biggest hesitation employees had when it came to high-deductible plans was the deductible itself. That’s because they didn’t understand how it worked. Most people thought that if they had a $3,000 deductible, they needed $3,000 in the bank to cover all of their medical expenses. As a result, employees were fearful that if they or their family members were hurt or ill, they wouldn’t be able to afford health care.
In addition to dispelling myths, one option to gaining employees’ interest in the plans was to fund health savings accounts to offset the high deductibles.
Several years ago, Cambia decided to partially fund their employees’ health savings accounts. They did this because their goal was not to shift costs, but to change behavior. Deductible savings are a short-term realization. Bigger savings come as employees become consumers of health care, shopping around for the highest quality, best-priced health care options.
And although it’s not necessary to fund employees’ health savings accounts, contributions are a nice incentive.
Cambia has found through its own analysis that it doesn’t matter what level earner an employee is; everyone on the high-deductible health plan is a good steward of their own and the company’s money. Access to HealthSparq’s transparency tools ensures employees have resources that help them save. And this price-driven conscientiousness continues even after the employee’s deductible has been met.
Part of Cambia’s mission is to slow the increase in health care costs system-wide. A key component of this objective is to actively engage employees in their health care decision-making. Employees have to move from being passive recipients of care to becoming active consumers of care.
But how? By providing employees with interactive tools and transparent information that they can use to choose providers and treatment options in a more informed, convenient and value-driven way. It’s about letting them choose options and services based on their own values. Throughout the campaign, Cambia used HealthSparq’s provider search and cost estimator tools to show employees how their deductibles and other benefit accumulators were likely to impact them personally, and how to minimize the impact by shopping for lower cost services, while not sacrificing quality.
So, was it worth it? Did Cambia achieve their goals? In just one year, Cambia grew their enrollment in high-deductible plans by more than one-third. Today they have 75 percent of their employees, from the top down, in high-deductible plans.
And although more time is needed to track realized savings, a study from Kaiser Family Foundation found that the average annual premium in 2013 for an individual under a high-deductible plan was $887, compared with $1,081 through an HMO. The company’s share of the premium was $4,419 for the high-deductible plan, compared with $4,948 for the HMO. Depending on how much an employer decides to contribute to an HSA, this can be a decent savings just
INDIVIDUALS COVERED BY
CONSUMER-DIRECTED HEALTH PLANS, SUCH AS A
HIGH-DEDUCTIBLE HEALTH PLAN WITH
A HEALTH SAVINGS ACCOUNT, HAD:
—Eighth Annual Cigna Choice Fund Experience Study 4
CLAIMS IN THE FIRST YEAR
EMERGENCY ROOM SERVICES
Bringing It Back to You
For employers who are new to high-deductible plans,
Cambia’s Vice President of Human Resources, Mark Stimpson, emphasizes that you have to start somewhere.
While they currently have 75 percent of employees enrolled in a high-deductible plan, Cambia only transitioned 11 percent of its employees in 2007, the first year high-deductible plans were introduced. Since then the growth of these plans has increased by leaps and bounds. A key component to success is to have the right tools that allow employees to become better consumers.
Stimpson also advises employers to be ready for and willing to take criticism. People fear the unknown and change is hard. Have clear reasoning for why a high-deductible plan is a good fit for your company and especially how it benefits employees.
Employees will be worried about the greater financial risk and spending more of their own money. They have to see the financial benefit and their transition from passive recipient to active consumer with the right tools.
Cambia acknowledges that without the HealthSparq transparency tools they used to engage consumers in the process of choosing health care services, the transition would not have been as successful. It’s not enough to just transition employees to the high-deductible plans. The real savings is from the behavior change, which requires transparency tools.
Consider it from the employee’s perspective. Can you imagine what it would be like to buy a pair of shoes without first knowing what they cost, or taking a vacation without maps, or buying a house without having an inspection? Well, that’s exactly what people do when they purchase health care services without having the resources and tools to make informed decisions.
Today’s employees are professional consumers. They are ready to become active participants in the health care decision-making process. Give them tools to make it possible and you can successfully transition them to high-deductible health plans and realize long-term cost savings as you support the development of a more informed, engaged and responsible health care consumer.
—Brodie Dychinco, Vice President of Strategy, HealthSparq, Inc.
It’s not enough to just transition employees to
the high-deductible plans. The real savings
is from the behavior change, which requires
When looking for transparency tools
that support your high-deductible
health plans, HealthSparq
offers the following tips:
• Look for a solution that comes directly from your health insurance company or can be connected to your health insurance company. The data that is available through your health plan is essential. There is no better source for pricing and coverage information than your health insurer.
• Ask for benchmarks to compare your employee base to other employee bases of similar size and make-up. Those benchmarks provide opportunities to drive savings to you and your employees.
• Personalize the tools. When things are more personal, usage goes up. Your culture is unique, your goals are unique and you deserve a solution that takes that into consideration. Solutions should take into account the employees’ benefit plans and offer real-time information. They also should allow you to promote them to your employees in ways that align with how you communicate to them. • Look for a positive, user-friendly
design that is a one-stop solution where all the information is presented in a way that people understand and relate to.
• Ask for added tools such as telehealth, a concierge line and other convenience capabilities to increase usage and promote health care consumerism.
1. Tatum, A. (2013, November 7). How are Rising Health Costs Impacting Family Budgets? Retrieved August 28, 2014, from California Common Sense:http://cacs.org/research/ how-are-rising-health-costs-impacting-family-budgets/
2. America’s Health Insurance Plans. (2014, July 09). New Census Survey Shows Continued Growth in HSA Enrollment. Retrieved August 28, 2014, from AHIP:
http://ahip.org/Press-Room/2014/HSA-Census-Survey/?utm_ medium=email&utm_source=Act-On+Software&utm_ content=email&utm_campaign=The%20Weekly%20
3. Austin, M. (2013, October 18). Rise of high-deductible health plans tied to savings accounts alarms some. Retrieved August 28, 2013, from Dallas News:http://www.dallasnews.com/business/
4. CIGNA. (2014, April). The Cigna Choice Fund Experience Study. Retrieved August 28, 2014, from CIGNA: http://newsroom.cigna. com/images/9022/874630_ExecutiveSummary_FINAL.pdf