Keeping the costs of a group insurance plan under control is a core concern for sponsors. To cut costs, it may be tempting to make changes to your existing plan. But how can you maintain acceptable costs without reducing the coverage?
Your first instinct will often be to seek a premium reduction, for instance through a call for tenders. But, in many cases, this will only be a temporary solution.
As premiums reflect claims and administration expenses, a sustainable premium reduction will rather require finding ways to keep claim costs in check.
A Unique Approach
Health care generally represents 50%-75% of group insurance plan costs, and drug claims make up 70%-90% of health care costs. Therefore, it makes sense to target the biggest expense item in a group insurance plan, i.e. prescription drugs.
At AGA, we developed a unique approach to enhance claims cost control. This approach involves an employee awareness communication strategy.
Targeting Consumer Habits
Several strategies can generate savings and help control the cost of prescription drugs. At AGA, we identified 4 levers that can be effectively applied by plan members:
- Ask for generic drugs
- Ask for a 90-day supply of maintenance drugs
- Shop around for a pharmacy
- Consider using a mail order pharmacy
If all plan members applied the best cost management practices, recurring savings of 10%-30% could be achieved. This is huge!
How to Get the Message Across?
As each person is different, several types of communications must be used in order to achieve maximum outreach!
Our communication strategy revolves around the following:
- Large-size posters for common areas
- Video to be shared by email or on intranet
- Employee presentations
- Fact sheet included with each certificate
- Cost comparison on the Member's portal
- Identification of chronic claimants and targeted awareness raising
Of course, an awareness campaign targeting chronic claimants must comply with the most stringent privacy rules. But it has the added advantage of reaching dependents, who generate almost 50% of claims!
Measurable Targets and Results
Prior to launching the campaign, we precisely determine the savings potential of the strategy. For example, we calculate:
- How much would be saved if all employees took generic drugs
- How much would be saved if all employees who take maintenance drugs received a 90-day supply
- How much would be saved on pharmacist fees if all employees purchased their medication in pharmacies offering competitive pricing
Once the campaign is underway, we review the data on a regular basis to ensure the strategy is really working. We compare the average prescription filling period before and after the campaign, and thus measure how fast the plan members are adopting good consumer habits.
That’s also part of doing more for each client!
Are You Concerned About the Cost of Group Insurance?