How to Optimize Your Benefits Spend
Ready or not, the era of optimization has arrived. Your entire organization is laser-focused on optimizing every aspect of their day-to-day jobs. Your sales team is focusing on optimizing the efficacy of their sales calls. Your marketing team is working on optimizing your site for social media sites and search engines. Your product team is optimizing digital components of your offerings to be accessible on mobile devices. You can’t escape the trend of optimization in your workplace.
This raises the question… What are you doing to optimize your benefits spend?
Surely, this has come up with your CFO at some point, whether or not the word “optimization” was used. When looking at your annual health plan, it can be really tempting to ask the question “do we really need to cover this?” Similarly, if your employees are upset because your benefit plan isn’t good enough, how can you analyze your benefits plan to have the greatest impact on company morale?
This is why optimizing your benefits spend is so essential. If you can combine data, employee engagement, and preventative measures, you can truly optimize your benefits spend and keep your team happier, healthier, and more productive in the year to come. Here are a few steps you can take to optimize your benefits spend within your organization.
Develop an Understanding of Which Benefits Your Population Currently Uses
The first step to optimizing your benefits spend is gaining as much information as possible on your population’s current usage of your benefits package. For the purposes of discussion, let’s focus on your healthcare costs.
There are tons of cost-savings opportunities that you could realize by, as an example, switching from brand name to generic prescription drugs. Unfortunately, without having visibility into what prescriptions your population is currently filling, you may not make much of an impact. Conversely, you may accidentally remove coverage for a prescription that doesn’t have a generic equivalent. If you have a comprehensive view of your population’s prescription drug use, however, you can make targeted adjustments based on your true population.
In order to optimize your current health benefits plan, make sure you have visibility into the following:
- What are your top 10 medical and Rx claims for the past year? Past two years?
- What does the current risk stratification of your population look like? What issues do your “at risk” members have?
- What’s your current average monthly spend by member type? (Employee, Spouse, Dependent)
- What do the biomarkers of your current population look like? Things like total cholesterol, HDL, LDL, tobacco use, and BMI could all be helpful in forecasting savings and intervention opportunities.
Once you have a solid grasp on how your population is currently leveraging your health benefits, you can move on to understanding areas where you can improve in the future.
Engage With Employees (And Data) To Understand What Benefits You Will Need
Now that you understand how your population is using your current benefits, you need to understand what additional benefits can add the most value. Truly optimizing your benefits package will involve a lot of research and analysis, which means this part may take a while. The good news is that, once you’ve gone through this process, you’ll have solid data backing up your decisions.
Here are three steps that we’d recommend to identify the most valuable benefits for your employees next year.
- Analyze your previous exit interviews to see if there were any common grievances among termed employees about your benefits program.
- Leverage a predictive analytics tool like Springbuk that can help you forecast future medical claims based on your population’s current health status.
- Send out a survey to your employees, or leverage an employee engagement tool, to better understand what benefits are most essential to them. Make them choose from a list of options that you gleaned from your analysis in steps one and two.
Now that you understand what benefits your population currently use and what benefits they’d like for you to add to your plan, you can craft a more optimized benefits plan, backed up with data.
How to Make Tough Choices While Optimizing Your Benefits Spend
Unfortunately, the process of optimization isn’t always easy. You may need to cut some benefits if you want to add more. Similarly, you may need to hold off on adding a certain class of benefits for another year. This is why we do the research upfront to understand priorities. If you’re truly committed to building an optimized benefits package with a limited budget, there will be tough choices involved.
The good news is that, when you’re armed with the right data, these choices become much easier. With all of these choices, you should be armed with the knowledge of what your current population is doing, what they need, and what they want. This will allow you to make better decisions for a happier, healthier workforce.
One Final Tip: Truly Optimized Benefits Spending Focuses on Preventative Maintenance
Finally, it’s worth noting that no health benefits package is complete without consideration around preventative care, health, and wellness. You know the adage, a stitch in time saves nine. Getting ahead of problem areas is just as vital to optimizing your healthcare spend as covering today’s ailments.
You don’t need to go out today and build a gym or onsite clinic. In fact, there are several wellness programs that you can start for free. Nevertheless, you do need to consider what aspect of your health benefits will help you prevent disease before it happens. Here are a few ways you can focus on preventative maintenance in your organization:
- Identify and close as many gaps in care in your population as possible.
- Share the same scoreboard with your wellness vendors and onsite clinic, so that they can focus on the same KPIs as your HR Department and CFO.
- Group your population into cohorts based on participation in wellness initiatives. This will allow you to track the effectiveness of all of your wellness efforts.
Want to learn how powerful health insights can help you optimize your benefits spend? Request a demo of Springbuk. Our health intelligence platform could be the perfect fit for your organization.
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