Optimizing Medical Programs: A Comprehensive Guide for Employers

By Scott Conard M.D. and Brian Uhlig

 
Introduction
As corporate executives, you are keenly aware of the significant impact healthcare costs can have on your bottom line. In today’s complex and often opaque healthcare system, many employers struggle to provide high-quality care for their employees while also managing expenses. In this blog, we’ll explore a comprehensive roadmap for optimizing medical programs, controlling costs, and improving employee health outcomes—drawing on insights from industry experts and strategies you can implement immediately.

 
The Current Healthcare Landscape: A Call for Change

The U.S. healthcare system is often characterized by misaligned incentives, a lack of transparency, and soaring costs. Employers sometimes delegate benefits management to HR teams or external consultants without fully understanding the financial layers that drive costs. As a result, many organizations overspend and miss key opportunities for improvement.

Misaligned Incentives
The system frequently rewards volume over value, leading to unnecessary treatments and procedures. Pharmacy Benefit Managers (PBMs), Third Party Administrators (TPAs), and brokers may profit more as healthcare costs rise, creating a perverse incentive to keep costs high.
Lack of Transparency
Employers often lack visibility into the true costs of their health plans. Complex contracts with TPAs, PBMs, and brokers make it difficult to track real expenses—especially around pharmacy benefits, where rebates and discounts are not always passed on to employers.
Financialization of Healthcare
A highly financialized environment has emerged between companies and their healthcare benefits, allowing certain entities to extract undue profits. This can inflate costs without necessarily improving patient outcomes.
Over-treatment and Inappropriate Care
Rewarding quantity over quality leads to overtreatment and unnecessarily high utilization of services. This not only increases costs but often fails to improve health

Taking Control: Actionable Strategies for Employers

A more engaged, strategic approach can help employers optimize medical programs. Below are several key strategies for you to consider:

1. Embrace Fiduciary Responsibility
As a self-insured employer, you have a legal and ethical duty to act in the best interests of your employees when managing their benefits. Put together a team with the expertise and tools—like the Health Rosetta Plan Grader—to analyze your plan’s performance. Consistent auditing and monitoring ensure you’re staying aligned with these responsibilities.

2. Demand Transparency in Contracts
Insist on full transparency in contracts with TPAs, PBMs, and brokers. Request a thorough breakdown of all fees and compensation in actual dollars (rather than percentages). Don’t hesitate to ask hard questions—even if your HR team or benefits consultant says the contract appears sound. The Consolidated Appropriations Act (CAA) requires transparency, and failing to secure it may not only cost you financially but also create legal risks, including class action lawsuits.

3. Prioritize Health Literacy
An informed healthcare consumer is more likely to demand better care and value for money. Equip your employees with the tools and resources to understand their health conditions and make educated decisions. Investing in health literacy can pay dividends in both cost savings and employee satisfaction.

4. Focus on Prevention and Chronic Disease Management
Chronic conditions like diabetes, hypertension, and mental health issues contribute disproportionately to rising healthcare costs. Implement robust prevention and chronic disease management programs—including mental health resources and medication management—so your employees can stay healthier and avoid expensive treatments down the road.

5. Optimize Pharmacy Benefits
Integrate pharmacy benefits with medical benefits to encourage appropriate, cost-effective medication use. Be wary of “maximizer” programs that can benefit PBMs and drug manufacturers at your expense. Consider value-based components when designing or selecting pharmacy benefit plans and keep an eye on how high deductibles affect your employees’ out-of-pocket costs.

6. Utilize Data and Technology
Data analytics can be a powerful tool in identifying areas of waste and steering members toward high-value providers. Use technology solutions to track practice patterns and measure the appropriateness of care. Data can highlight hidden cost drivers, helping you make more informed, evidence-based decisions.

7. Standardize Contracts
Explore opportunities to standardize contracts between payers and providers. Simplifying your contracts lowers administrative costs and streamlines operations. Direct contracting with Centers of Excellence or other innovative arrangements can be especially beneficial if you have a large population with specific healthcare needs.

8. Humanize the Problem
Invite employees to share personal stories about the challenges of high deductibles and out-of-pocket expenses. Real-life narratives can help rally internal support for change and bring a sense of urgency to your organization’s healthcare initiatives.

9. Create an Environment of Open Communication
Support your HR team by offering “air cover” for new and potentially challenging initiatives. HR professionals can’t enact significant reforms if they lack the backing of the C-suite. Open dialogue ensures alignment across the organization on healthcare strategy.

10. Emphasize Transparency and Simplify the Process
Overly complex systems frustrate both employees and providers. Whenever possible, partner with organizations dedicated to transparent pricing and straightforward processes. Simplifying the healthcare experience is a win-win for everyone involved.

 
Moving Towards a Culture of Value and Accountability

As a corporate executive, you have the power to shape a healthcare ecosystem that offers high-quality, cost-effective care for employees. By applying the strategies outlined here—prevention, pharmacy benefit optimization, data-driven decisions, and transparent partnerships—you can foster a healthcare model that genuinely serves your employees.

The journey starts by engaging with experts and vendors who prioritize transparency. A sustainable, fair approach to healthcare benefits is not just possible; it’s profitable for everyone involved when done correctly. By cultivating a culture of value and accountability, you’ll enhance both the health of your workforce and the health of your bottom line.

 
Ready to Optimize Your Medical Programs?

If you’re looking to take the next step, connect with seasoned professionals who have a proven track record of helping employers restructure and improve their healthcare programs. Together, you can create a system that truly prioritizes employee well-being while maintaining fiscal responsibility.

 
Interested in learning more or continuing the conversation? Connect with us today.

Written by Rob Thwaites