How Mower County Improved Benefits While Reducing Health Care Costs
Two years ago, Mower County was facing the same frustrating situation confronting employers throughout the country.
Its health insurance costs kept increasing, but county leaders weren’t receiving the claims data they needed to understand why. They wanted to control costs, but they didn’t want to accomplish that by shifting more of the burden to employees.
So they decided to try something different.
In this episode of Take Charge with HELPcare, Dan Hinmon and I welcome back Colton Storla, vice president of employee benefits at North Risk Partners. Colton helped Mower County design a health plan that gave the county greater transparency and control while preserving—and in some respects improving—employee benefits.
From buying insurance to managing health care
Mower County had been part of a pooled plan with a large insurance company. The arrangement operated somewhat like a self-funded plan, but the county wasn’t getting the principal advantages of self-funding.
It had limited access to claims data and limited ability to customize the plan. The county may also have been helping offset the costs of other employers in the pool.
The new plan uses an independent third-party administrator while maintaining access to a broad provider network. It also includes several tools that aren’t typically available—or aren’t used effectively—in a conventional fully insured plan:
- HELPcare Clinic membership as the front door to primary care
- Nurse navigators who help employees find high-quality, lower-cost care
- A pharmacy strategy focused on the lowest net cost of medications
- Direct access to preferred providers for specialty care
- Stop-loss insurance to protect the county from catastrophic claims
- A $0 out-of-pocket tier for HELPcare Clinic and selected specialty services
The goal wasn’t simply to pay claims differently. It was to give employees better access to care while providing the county with tools to manage the cost of that care.
What happened during the first year?
According to Colton, the county’s combined medical and pharmacy spending declined by nearly 7%.
That’s significant because most employers experienced substantial health plan cost increases during the same period. The county was on track to realize approximately $500,000 in expected savings.
The number of high-cost claims also declined. Previous reports had shown more than 30 claims above the applicable high-cost threshold. During the first year of the new plan, that number fell to 10.
More than half of the county’s covered population engaged with HELPcare Clinic during the year. County leaders encouraged that participation by giving employees paid time off to schedule their first appointment.
That’s important because the value of better primary care doesn’t come merely from offering it. Employees need to establish a relationship with their practitioner before a health problem arises.
Despite having one claim exceeding $1 million, the plan worked as designed. Stop-loss insurance covered the costs above the county’s specified responsibility, and the county renewed its plan with a low-single-digit increase.
Making an extremely expensive drug merely “kind of expensive”
One story from the episode illustrates what becomes possible when the employer, direct primary care clinic and nurse navigator work together.
A county employee needed an injectable medication that had been administered through a large health system. The total cost was approximately $60,000, and the employee needed to take time away from work to receive it.
By changing the site of service, we were able to have the medication administered at HELPcare Clinic, just around the corner from her workplace.
The medication was still expensive—more than $20,000—but it became merely “kind of expensive” instead of extraordinarily expensive.
The employee saved time and money. The county’s health plan saved tens of thousands of dollars. And she received the medication for $0 out of pocket from a physician she knew and trusted.
That’s what a win-win health plan looks like.
Direct primary care as the front door
Colton describes direct primary care as a foundational part of the Mower County plan.
In a traditional health plan, employees essentially receive an unlimited credit card without knowing the price or quality of the services they’re purchasing. They may start at an unnecessarily expensive site of care, be referred from one specialist to another or avoid seeking care because they’re worried about the cost.
HELPcare Clinic gives employees a better place to start.
Our practitioners have time to understand their patients’ medical histories, address more issues at the primary care level and help patients decide what should happen next. When specialty care is necessary, the clinic and nurse navigators can help employees find high-quality, lower-cost options.
Employees don’t pay out of pocket for visits to HELPcare Clinic. Lab tests they need are also $0 out of pocket. Any care they can get at HELPcare Clinic is FREE to them.
Removing those financial and logistical barriers makes it easier for employees to get care before a manageable problem becomes a major claim.
Is self-funding guaranteed to save money?
No—and Colton makes that point clearly in our conversation.
Self-funding is a tool for gaining transparency and control. The results depend on what an employer does with those advantages.
There’s a right way and a wrong way to self-fund. Employers need appropriate stop-loss protection, sound contracts and a multiyear strategy. They also need practical ways to reduce the frequency and severity of claims.
That can include direct primary care, nurse navigation, pharmacy management and direct relationships with high-value providers.
Employers also shouldn’t evaluate the strategy only 12 months at a time. It makes more sense to develop a two-, three- or five-year business plan for improving employee health and gradually flattening the health care cost curve.
There’s no guarantee that changing your plan will save money in any particular year. But continuing to do the same thing virtually guarantees that you’ll keep getting the same annual increases.
Take charge of your health plan
If you’re a CEO, CFO, HR leader, business owner or public-sector official, this episode offers a real-world example of what can happen when an employer stops passively buying health insurance and starts actively managing health care.
Watch our conversation with Colton above, or listen through your favorite podcast app:
You can also watch our previous conversations with Colton here and here to learn more about the development of the Mower County plan.
Dive Deeper
If you’d like to explore these ideas in greater depth, join us from 1–5 p.m. on Wednesday, Aug. 5, at the Haley Center in Rochester for Building a Better Employer Health Plan.
The program is designed for CEOs, CFOs, HR leaders, business owners, public-sector employers and health care professionals who want practical alternatives to the traditional health insurance cycle.
Learn more and register for Building a Better Employer Health Plan.
Or check out our corporate membership options for employers and request a free review with our team.
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