By Chris Ceplenski, Senior Editor
Beaumont Hospitals, an employer of about 12,000 full-time employees in the Detroit area had an aging workforce with a declining health status, and needed a redesign of its health care offerings in order to contain costs. They estimated that at the current rate at which costs were escalating, every dollar the hospital generated in revenue over the coming 6 years was going to be spent on healthcare.
Maureen Cotter, a consultant with MCA Inc., explained to her audience yesterday at the 19 th Annual Benefits Management Forum & Expo in Chicago, Illinois, that she worked with the hospital to formulate and implement a plan that would contain costs while avoid cutting value to employees.
They drew up objectives that included 1) investing in employee health to control rising costs and improve productivity and 2) increasing a sense of shared responsibility between the hospital and employees (to make it less paternalistic) as well as increase shared opportunities for improving employee health and well-being.
Beaumont created a multi-year strategy for redesigning their plan, which included a paradigm shift from "choice-based paternalism" to "shared responsibility with shared opportunity", Cotter explained. One element of significance is that the design and communication of the strategy for the changes was shaped by employee input, she said.
Specifically, employees reported that they struggled to manage health issues and desired support from an objective trusted resource. Employees also communicated the sentiment that people who "do the right thing" (read: live a healthy lifestyle) should pay less for health care. Finally, they wanted a lower cost healthcare option--since the pay ranges of employees at the hospital varied widely, employees felt there should be more customized, affordable options.
The ins and outs of what Beaumont ultimately unveiled are extensive--but major components included the introduction of a consumer-driven health plan (CDHP)/health retirement account (HRA) option as well as the introduction of personal health risk assessments. The CDHP, Cotter noted, was projected to save an estimated $500 per year in healthcare costs for nearly half of Beaumont 's employee population. Meanwhile, employees were given the incentive of $100 to complete the health risk assessments, the results of which were used to help Beaumont fine-tune their plan towards cost containment (more on this below). Meanwhile, new hires are now required to fill out health risk assessments at Beaumont .
Two other significant components Beaumont also now offers are a personal health coaching program as well as customized employee portal with content supplied by WebMD (remember, employees said they wanted access to information/support from a reliable source).
In the end, Beaumont , which has been named a " Great Place to Work" by both Fortune and AARP, has been able to successfully contain costs. Cotter ended her session by offering her "Top 10 Tips for Success" in strategic cost containment. They are:
- Articulate a vision. Get it in writing, whatever it is, i.e., "We're trying to create a healthier world."
- Define roles, responsibilities, and accountabilities (for all participants who are involved in implementation as well as employees themselves).
- Use data to identify opportunities and priorities. Beaumont did this not only when forecasting costs and estimated savings but made use of data from health risk assessments. The risk assessments revealed high degrees of both need and readiness for help. This information allowed Beaumont to "laser focus" the type of wellness-focused programs it wanted to implement.
- Develop a multi-year strategy. This is more preferable than revisiting your annual budget and "tweaking" your benefits offerings every year (something Beaumont used to do prior to the redesign).
- Obtain senior management buy-in early. They need to understand what is going on from the beginning in case employees have questions, especially "why" changes are being made.
- Establish a partnership between HR and finance.
- Develop a communications strategy before finalizing the plan's design.
- Get input from employees.
- Measure results
- Communicate, communicate, communicate