How would you like your company to make headlines for saving one million dollars in medical costs while improving employee benefits? It happened to Dynamic Dies, Inc., as explained Monday at the 20th Annual Benefits Management Forum & Expo (in Dallas, Texas) by Jill Kopanis, the company's Corporate Human Resource Director. And if you're a small or medium-sized employer, don't dismiss your chances of duplicating the success of Dynamic Dies. As Kopanis pointed out to her audience, her employer is no Fortune 500 company: Dynamic Dies employs 170 workers in its 4 production locations (in Ohio, Indiana and Pennsylvania), 132 of whom participate in medical benefits.
After, Dynamic Dies, which became self-insured in 1998, saw renewal increases of 15 percent in 2000-01 and 23 percent in 2001-02, a benefit consultant recommended a number of moves to save the company money. These suggestions included increasing monthly premiums for employees, removing their spouses from health care coverage and moving to a high-deductible plan. But Kopanis, determined there had to be a better way to cut costs, resisted these suggestions.
Four years later, Dynamic Dies was spending less on medical claims than it had in 2002. It hadn't increased monthly premiums for 4 years running and had actually given back one month of medical premium back to employees 2 years in a row, all while improving medical coverage?and saving $1 million in the process.
So what did Kopanis and her employer do to achieve such success? They "created 170 benefits specialists" by educating and partnering with the Dynamic Dies workforce--and their spouses. Kopanis explained that the winning plan for controlling medical costs involved four "Ates"--evaluate, educate, communicate and motivate.
The first step for Kopanis and Dynamic Dies was to evaluate--to gain an understanding of what drove up medical costs by studying the health care plan's history and data as well as conducting a monthly review of claims. For example, Kopanis analyzed things such as network utilization and usage trends and learned that spouse/children claims were above the national average. An evaluation of script usage revealed that prescriptions were being written for things like aspirin and cough medicine. Kopanis also discovered that many employees did not understand their EOBs or Explanation of Benefits statements.
Once the company felt it was armed with enough information, meetings were then held with all employees in order to educate them on insurance basics, including what the company's yearly insurance costs were, how this year's health care costs impacted the following year's premium, and what future program changes would be if the company didn't' improve its medical costs (namely, the company would have to pass costs onto employees and slash benefits). It also trained employees to read and understand their EOBs at that time.
The message Dynamic Dies tried to communicate to its employees in these initial meetings was "partner with us." This was just the beginning in terms of communication, as Dynamic Dies followed up by providing quarterly updates regarding where the company stood in terms of medical costs and incorporating wellness in the partnership by providing wellness articles and information.
Dynamic Dies then set out to motivate its employees by telling them that if the company succeeded in driving costs down, there would be no spouse removal from the plans or implementation of a high deductible plan. Their strategy began to pay off the following year--in 2002-03 the insurance increase was only 6.6 percent. In addition to providing ongoing training and education the next year, Dynamic Dies then sought out to further motivate its' workforce by pledging not to increase their premiums the following year if the numbers stayed on track--and it worked. In 2003-04, the insurance increase was only 3.2 percent.
Then, the company made a strategic move which Kopanis told the audience was one she could not recommend highly enough. The Dynamic Dies workforce was primarily male, but the primary caregivers of employees' children were their spouses, who were incurring much of the medical costs, and most of the employees weren't passing the information Dynamic Dies was providing along to their spouses. So Dynamic Dies contacted employee's spouses directly by sending information/letters to their homes. The company also upped the ante in terms of motivation by letting employees know it would offer a 1 month free premium if there was a zero percent insurance increase the following year.
In 2004-05, Dynamic Dies had a 15.8 percent decrease-- premium increases were passed along to employees for the second year in a row and employees were rewarded with the 1 month free premium, paid back to employees at the end of the year (November--just in time for holiday shopping Kopanis notes) which created even more buy-in from spouses for the coming years.
Dynamic Dies also offers free risk assessments for employees and its spouses, has continued to conduct informational/training meetings, has implemented the education process into new employee orientation, and more. Kopanis stresses that the attention you devote to communicating with and motivating employees--and their spouses--regarding health care costs and the impact that their actions have on these costs must be unrelenting and ongoing. "I partnered with them and they partnered right back," she explains.