Controlling the cost of a group insurance plan is often a core concern for sponsors. To cut costs, it may be tempting to make changes to the plan you provide to employees. But how can you ensure your costs remain at an acceptable level 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.
Since premiums will eventually reflect claims and administration expenses, a sustainable premium reduction will require finding ways to keep claim costs in check.
A unique approach
Health care can often represent between 50% and 75% of the cost of a group insurance plan, and drug claims make up from 70% to 90% of health care costs. Therefore, it makes sense to target the biggest expenditure 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 help control prescription drug use and generate savings. 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% to 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 thus includes 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 members portal
- Identification of chronic claimants and targeted awareness raising
Of course, an awareness campaign targeting chronic claimants must be done in compliance with the most stringent privacy rules. But its greatest advantage is that it also targets dependents, who are often responsible for 50% of claims!
Measurable targets and results
Prior to launching the campaign, we are able to determine exactly the potential savings our strategy can generate. 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 are able to compare the average length of the drug supply cycle before and after the campaign, and thus measure the pace at which good consumer habits are adopted by group members.
That’s also part of doing more for each client!