health care costs – Workforce

March 25, 2020April 11, 2023

The impact of COVID-19 on hourly and low-wage workers

shift scheduling for hourly restaurant workers, shift swap

One thing COVID-19 has done in the United States is put a spotlight on how a pandemic impacts lower wage hourly workers versus salaried, higher-earning employees.

With a limited number of coronavirus tests currently available, many wealthy Americans, celebrities and politicians have been able to get tested for COVID-19 and get results quickly while cutting less affluent people in line. While insurers have waived the copay to get tested for the virus, patients still have to pay for treatment, which could result in thousands of dollars of medical bills. As Time noted, one uninsured patient owed $34,927.43 for her treatment.

“While most people infected with COVID-19 will not need to be hospitalized and can recover at home, according to the World Health Organization, those who do need to go to the ICU can likely expect big bills, regardless of what insurance they have,” the article stated. “As the U.S. government works on another stimulus package, future relief is likely to help ease some economic problems caused by the coronavirus pandemic, but gaps remain.”

Amid the COVID-19 outbreak, workers who need paid sick days the most have the least, wrote Elise Gould, senior economist at the Economic Policy Institute, in an EPI article. Only 30 percent of the lowest-paid workers — many of whom are hourly workers in the service industry — have the ability to earn paid sick days, and these are the workers who typically have contact with the public.

These workers also typically are the ones who can’t work from home. According to the U.S. Bureau of Labor Statistics, among 25 percent of full-time workers who earn the least, only 9.2 percent have the option to work from home compared to the 61.5 percent of employees who earn the most.

Also read: The role of businesses in addressing public health outbreaks

Some companies have been positive in their response to COVID-19. Microsoft decided to continue to pay all its hourly service providers their regular pay while the company has reduced service needs. Walmart also announced that workers would receive up to two weeks pay should they be quarantined or test positive for the virus.

According to a Willis Towers Watson survey of 805 companies polled the week of March 16, 72 percent of employers will continue to pay hourly workers who test positive for coronavirus. Similarly, 54 percent will also pay hourly employees who have cold or flu-like symptoms and choose to stay home. Less promising, only 36 percent will continue paying hourly workers when they stay home because they don’t have child care.

Meanwhile, other companies have decided that mass layoffs are necessary so its out-of-work employees can collect unemployment benefits and return to their old job “when this extraordinary episode ends.”

Unemployment benefits may be helpful. But while a common occurrence in the face of the COVID-19 pandemic is more people getting laid off, more than 50 percent of employees get health coverage through work. Former employees have to worry about regular finances like rent and food while also figuring out what to do once they’ve lost their employer-provided health insurance.

Laid-off employees can sign up for Affordable Care Act coverage, but they need to avoid common, easy mistakes, according to the USC-Brookings Schaeffer Initiative for Health Policy, which provides laid-off employees guidance to find a new insurance plan. For example, short-term insurance coverage can be misleading for consumers, the report noted. This type of health plan may not cover costly services like hospital visits and often doesn’t protect people with pre-existing conditions.

In light of the unique issues facing low-wage and hourly workers, there are certain best practices companies can consider. According to Gallup, these best practices include:

Approving additional budget for supplies or additional paid time off.
Granting paid time off for symptomatic employees, employees who must care for family members who are diagnosed with COVID-19, and/or employees with diagnosed cases of COVID-19.
Permitting unlimited unpaid time off without penalty.
Paying for time spent under quarantine.
Communicating employer-sponsored insurance and other relevant benefits.
Making revisions to employee compensation and benefits policies.

COVID-19 is rapidly changing how businesses operate. We recognize that organizations need an extra helping hand right now. So we’re offering our platform for free to new sign-ups over the coming months. Sign up today and our Workforce Success team will gladly provide a personal, online walkthrough of our platform to help you get started.

January 9, 2020January 9, 2020

Employers Struggle to Reduce Wasteful Health Care Spending

Employers have found ways to manage health care costs, but need to step up their efforts to tackle a more vexing problem — eliminating wasteful medical care spending.

A recent Journal of the American Medical Association study found that 20 to 25 percent of medical spending is unnecessary.

“As long as we are in a fee-for-service world we will get services whether we need them or not,” said Mike Thompson, president and CEO of the National Alliance of Healthcare Purchaser Coalitions. “We need to shift from paying for volume to paying for value, and employers need to put pressure on providers to get this right. They should be asking for spending reports from vendors, like Blue Cross Blue Shield, and they should be analyzing claims and identifying waste. The problem is not new and neither is value-based medicine, but there are new efforts to address wasteful spending.”

The estimated waste hovers between $760 billion and $935 billion, with administrative costs such as claims processing, billing and transferring medical records making up the largest share at $266 billion annually, according to the JAMA study.

Yet, more than half of employers aren’t actively doing anything about it, according to a 2018 report by the NAHPC. While the first step for employers should be identifying the problem, nearly two-thirds of businesses surveyed don’t collect or analyze data to track waste.

“Employers should be asking for reports from the vendors and analyzing claims data to identify waste,” he said. “Part of the reason why vendors don’t offer this information is because they’re responsible of getting rid of it.”

Employers need to take a more proactive role in tackling wasteful spending, according to Daniel Wolfson, executive vice president and chief operating officer for the American Board of Internal Medicine. He urges them to speak not only to health plans but also to health care providers about what they are doing to minimize the problem. Wolfson leads Choosing Wisely, an ABIM initiative designed to encourage patient-doctor dialogue around the overuse and misuse of medical services. The program, which was launched in 2012, publishes a list of more than 400 recommendations on treatments that patients and physicians should question.

The Washington Health Alliance looked at 48 common medical treatments, tests and procedures and found that an estimated $341 million was spent on unnecessary health care in the course of a year.

“I think employers are absent from the conversation,” he said. “They have not used their leverage to impact this problem. Employers have had a tremendous influence on quality issues but they are not using their leverage, their power, their influence and their thinking when it comes to wasteful health care spending. They should be saying ‘If we’re going to be purchasing health care services from you we want to hold you accountable.’”

Also read: The 4 Myths of Health Care Cost Reduction

Some employers are using the Choosing Wisely recommendations, which were created by 17 national medical specialty societies. Each list offers information on when tests and procedures, such as imaging for lower back pain or breast cancer treatments, are appropriate.

In Washington state, the Washington Health Alliance looked at 48 common medical treatments, tests and procedures and found that an estimated $341 million was spent on unnecessary health care in the course of a year. Of the 2.9 million services examined, nearly half were found to be unnecessary.

The prescription of opioids for lower back pain was the most wasteful treatment, followed by the use of antibiotics for upper respiratory and ear infections, annual EKGs for low-risk patients and imaging tests for eye disease.

In Missouri, the St. Louis Business Health Coalition partnered with the Midwest Health Initiative in 2016 to identify unnecessary care. It found $303 million in wasteful spending to vision screenings, imaging tests, EKG services and pre-op lab studies in 2016.

In 2017, the coalition examined emergency room use for upper respiratory infections and found that $2 million a year could be saved if patients went to an urgent care clinic instead of a hospital emergency department.

Louise Probst, executive director of the employer coalition, said that benefit plan design can help through increased copays for ED visits.

“We all have a problem with low-value care,” she said. “It’s important to ask employees to think about that as an individual and then as a company. Look at incentives in your plan design, look at contracts, look for partners. Get the best data that you can and keep track of it. Employers, hospitals, physician organizations, labor unions, and other community partners need to come to together with a single focus of improving value in health care.”

October 24, 2019February 14, 2022

Health Care Surveys Show Employers What to Expect in 2020

Recent surveys show that employers are increasingly addressing outside financial and environmental factors in their benefits offerings.

While the Kaiser Family Foundation’s annual survey gives insight into cost trends in employer-sponsored health care, the National Business Group on Health’s new study focuses on what large employers are doing to address these trends.

One noteworthy trend is rethinking impact of cost-shifting and consumer-driven health plans, also referred to as high-deductible health plans.

Employers are bringing back choice, according to the National Business Group on Health’s “2020 Large Employers’ Health Care Strategy and Plan Design Survey,” which was conducted in May and June 2019 among 147 large employers. Collectively, respondents represent a wide range of industry sectors and offer coverage to more than 15.6 million employees and their dependents.

According to the NBGH survey, 11 percent of employers offering an optional HDHP for 2020 previously offered HDHP-only. Employers cited several reasons for this shift, including the desire to be more sensitive to employees with chronic health care conditions and their health care expenses.

The Kaiser Family Foundation also stressed the adverse impact of HDHPs on many employees in its 2019 “Employer Health Benefits” report released in September. Forty percent of non-elderly adults who have employer-based coverage said that either they or a dependent have had difficulties affording health care.

Further, people with HDHPs were worse off. Among all employees surveyed with chronic conditions, 60 percent said they felt confident enough to afford the cost of the major illness. This percentage halved for chronically ill employees with HDHPs. Only 1 in 3 said they feel confident affording this major medical cost.

Taking employees’ health into account goes beyond health insurance. The NBGH survey found that 60 percent of employers are considering strategies to address food quality/access in the next few years.

“One of the primary things that employers can do is offer nutritious food in on-site cafes and vending machines — and importantly — reduce the cost of these items to make them more desirable than less nutritious ones,” said Steve Wojcik, vice president, public policy at NBGH.

Other ways to address employees’ food quality and access challenges include partnering with local grocery stores to offer employees discounts on healthy foods and offering healthy, prepared take-home meals for purchase, he added.

Macro trends that impact people’s physical or financial health go beyond food deserts. The NBGH report also cited other notable macro trends like stagnant wages, poor public transportation systems and high housing prices.

Bringing an end to the most pressing social and environmental challenges will likely require action and partnership from both public and private sectors, Wojcik said. Companies are increasingly understanding that business performance, employee well-being and community health are intrinsically linked.

“Large employers are uniquely positioned to use their voice to draw attention to issues, advocate for public solutions (potentially in partnership with other employers or nonprofit organizations) or invest corporate social responsibility funds into initiatives that will positively impact their employees, customers and the communities where they work,” he said.

Also read: 4 Myths of Health Care Cost Reduction

Wojcik also suggested that if employers claim a position on some external issue, their internal benefits should be aligned with that. If a company has a corporate social responsibility program or external initiative on affordable housing, for example, it should also make sure that it supports financial well-being program such as employer-sponsored housing programs or homebuyer workshops.

The Kaiser report also stressed the need to keep employees’ financial situations in mind, comparing the needs of low-wage versus high-wage employees.

“When people talk about the 153 million people with employer-based coverage, they often gloss over the very real cost differences for different groups of workers across the marketplace,” according to the report, which compared companies that have a large share of low-wage workers with companies that have a small share of low-wage workers.

Covered employees in organizations with large shares of lower wage workers on average face higher deductibles for single coverage and must contribute a greater share of the premium for family coverage than workers in firms with a smaller share of lower wage workers, the study found.

Being eligible for employer-sponsored coverage also is impacted by wages. In companies where at least 35 percent of employees earn $25,000 a year, 66 percent of employees are eligible for the coverage compared to 81 percent of employees in companies with a smaller share of low-wage workers.

The national debate around expanding Medicare was also a major theme in these reports. Most employers have major concerns about Medicare for All, NBGH noted. Fifty-seven percent of those surveyed believe that Medicare for All would increase the country’s health care costs, 69 percent believe it would decrease health care innovation and 56 percent believe it would decrease quality.

While the Kaiser report did not go into attitudes people have about Medicare, it did explore attitudes people have toward employer-sponsored plans. The debates over Medicare and the future of U.S. health care have raised concerns about the performance of employer-based coverage, the report noted. Many employees with chronic conditions, especially people with HDHPs, have issues affording health care, and low-wage workers may very well face higher premiums for health care than employees who earn more.

“Regardless of its outcome, the national debate around expanding Medicare or creating public program options provides an opportunity to step back and evaluate how well employer-based coverage is doing in achieving national goals relating to costs and affordability,” the report stated.

June 25, 2019June 27, 2019

SHRM Releases its Annual Benefits Survey

The Society for Human Resource Management released its annual benefits survey today at the organization’s annual conference in Las Vegas.

The survey confirmed some facts that HR has known for a while, like that employers find that retirement and health care benefits are most important to their workforce. It also highlighted some major trends that are impacting the benefits landscape including health insurance costs, competition for top talent and the Tax Cuts and Jobs Act of 2017.

Not surprisingly, employer-sponsored health care is a major concern for both employees and employers. The SHRM survey found that eighty-five percent of organizations prefer Preferred Provider Organization insurance plans. Meanwhile, though, interest in high deductible health plans linked with health saving accounts is rising. Fifty-nine percent of organizations offer an HDHP plan option that’s linked with a savings/spending account while 19 percent offer an HDHP option that’s not linked with an account.

Also read: The 4 Myths of Health Care Cost Reduction

Employers in general are aware that social determinants of health may impact an employee’s ability to afford to access coverage, but the survey data doesn’t show a response to that in the form of something like wage-based premiums or a reduction in cost-shifting, according to SHRM Chief Knowledge Officer Alex Alonso. That being said, he sees an increase in “cafeteria-style benefits” as a way for employees to access what benefits they need for their individual circumstances.

The survey also shared some details on how health care costs are being split between employers and employees. For full-time employees, it depends on company size. Twenty-eight percent or companies with 1-99 employees fully pay for health insurance premiums, compared to 9 percent of employers with over 500 employees.

Also notable is that offering health insurance to part-time employees is becoming more popular in order to attract and retain talent. Still, 19 percent of organizations require part-time employees to pay their premiums in full, while 36 percent of organizations share the cost.

According to Alonso, there has also been an increase in telemedicine. It can be a “convenient health care option” for employees, especially those in rural areas where there aren’t as many health care providers as more urban areas.

On the more surprising side, employers as a whole ranked wellness “near the bottom in importance to their workforce.” SHRM Director of Data Science Liz Supinski said one reason behind this is that insurers are increasingly offering services like chronic disease management programs that used to only be offered through wellness services.

Between and 2015 and 2019, a couple key areas of health care have seen a dramatic drop of prevalence, according the survey. Ninety-one percent of employers offered mental health coverage in 2015 compared to 83 percent in 2019, and 83 percent of employers offered contraceptive coverage in 2015 compared to 71 percent in 2019.

Supinski noted that this is not necessarily a negative sign or employees who need to access mental health or reproductive health services. Rather, before the Affordable Care Act, these areas were not automatically included in the core, basic health plan, and then the ACA mandated them as essential health benefits. The survey question refers to extra services that exist out of the health plan.

More 2019 SHRM Conference Coverage:

Exclusive Video Interviews from the 2019 SHRM Conference

The State of #SHRM19 Speech: Wait Until Monday

Day 2 at #SHRM19: It’s All About the Underutilized Talent Pool

Brené Brown at SHRM Conference: ‘Leaders Are Never Quiet About Hard Things’

January 11, 2019June 29, 2023

Employers See Palliative Care as Option to Cut Health Costs

When George Schwartz’s late wife was diagnosed with advanced lung cancer in 2002, he faced the task of managing her care while working as a financial advisor in a small brokerage firm.

He accompanied her to appointments, researched treatment options, coordinated her care and struggled to manage the fears that came with the dire diagnosis.

The experience was both physically and emotionally draining. It wasn’t until the couple turned to palliative medicine, a fairly new subspecialty recognized by the American Board of Medical Specialties in 2007 that helps patients manage serious illnesses, that the load became bearable, he recalled.

“It provided us relief from anxiety, starting with a clear explanation of the course of the disease, what end of life would be like and how a palliative care doctor would deal with her deteriorating health,” said Schwartz, 66, whose firm, Gilbert, Doniger & Co., is based in New York. “I had a lot of interaction with the health care system and I hadn’t heard of it. My wife found out about it in a magazine article.”Palliative medicine, which is practiced by specially trained doctors, nurses and other health care professionals, provides care for patients with life-limiting conditions such as cancer, advanced heart disease, dementia, and kidney failure, among others. The goal of palliative care is to improve quality of life through pain management, stress relief, treatment for fatigue and depression, and by offering support for caregivers.

It is also associated with lower health care costs and better outcomes for patients and their caregivers, who are vulnerable to stress and illness, according to Lea Tessitore, a researcher with Catalyst for Payment Reform, a nonprofit organization that works on behalf of large employers.

“Cost savings can come in a variety of ways,” she said. “If you lead with a focus on quality of life then cost reductions will follow. For example, having a conversation around the goals of care with a provider can help to avoid aggressive and potentially harmful treatment that isn’t necessary.”

In September, CPR and the Center to Advance Palliative Care released a guide to help employers develop a palliative care strategy and educate them on what it is and how it can help patients and caregivers. Tessitore said that it could also help employers approach a topic that can be difficult to talk about.

“Many people think that palliative care is synonymous with hospice care and that creates a barrier to having these conversations,” she said. “They think that this is the type of care I get when I’m ready to give up. But palliative care is a high-value way to make an impact on the lives of employees with serious illness and their caregivers. It can improve the quality of life and it can reduce costs.”

Also read: Organ Transplant Innovations Can Save Health Care Dollars

It is associated with shorter hospital stays and lower health care costs due to a decreased need for 911 calls, emergency room visits, hospitalizations and the elimination of costly and ineffective treatments. In fact, patients with serious illnesses who received palliative care saved an average of $3,237 over the course of a hospital stay compared to patients who did not receive it, according to a study published in JAMA Internal Medicine in 2018.

These costs savings are catching the eye of employers, who recognize that while just a small fraction of employees have serious illnesses, most of their health care dollars are going toward their treatment, according to Allison Silvers, vice president of payment and policy at the Center to Advance Palliative Care.

“About 2 percent of the commercial population is facing a serious illness and the care they get is often avoidable. … That percentage sounds tiny but it’s where employers are spending most of their money.”

One employer who recognized the costly gaps in care for seriously ill patients is Dow Chemical, which worked with insurance giant Aetna to launch a hospice program in 2004 that allows patients to pursue treatment through palliative care. Typically, insurers will not cover hospice care if the patient continues to seek “curative treatment,” said Silvers. Dow is featured in the CPR toolkit.

She hopes that more employers will see the potential of palliative care to improve the lives of employees with serious illnesses.

“We really want purchasers to demand from their health plans that they make palliative care available to participants,” she said. “We’re hoping to drive demand. It’s not a hard thing for health plans to do, but they don’t have much impetus. Employers need to demand this.”

January 4, 2019June 29, 2023

Value-Based Care: Making Health Plans Work Better

Health care is costly. That’s nothing new.

Consider this: The average annual cost of health care has increased from $146 per person in 1960 to more than $10,000 per person in 2016, and care costs are expected to increase by six percent in 2019. So, while offering high-quality health care is a great way to take care of your employees, it’s becoming increasingly difficult to juggle the cost of their care with your company’s bottom line.

An option that’s become more available in recent years is the value-based health plan. In value-based health plans, payors share data and analysis to help providers improve their patient care outcomes. Through enhanced reporting and collaboration, doctors can identify areas to gain efficiencies, reduce unnecessary care, and most importantly, improve patient satisfaction and health.

Then, providers earn additional reimbursement based on their performance on cost, quality and outcomes measures. In value-based payment arrangements, health plans pay doctors more for improved patient outcomes and higher quality, and the total cost of care is better controlled.

Many companies are moving away from traditional fee-for-service agreements and toward these value-based payment arrangements. According to an analysis, the number of available alternative payment plans grew from 67 in 2011 to 823 in 2017.

Value-based payment arrangements get to the heart of the major drivers of health costs — hospital stays, ER visits, over treatment and chronic conditions like diabetes. So, when patients get the care they need at the right time, in the right setting, they have fewer complications, and require fewer hospital stays, ER visits and readmissions. These improvements help reduce costs paid by employers and insured members.

Nationally, the Michigan Blue Cross plan shares data and analysis with other Blue plans across the United States, so they can not only measure performance on a national scale, but use the data to create tailored, value-based health plans for companies with employees in multiple states.

For example, value-based Blue plans nationally have shown a 10 percent decline in ER visits, 2 percent decline in hospital stays, and an increase in prevention and chronic care management.

When it’s time for companies to decide on health plans for their employees, they should first ask their health plan some important questions.

Are value-based plans available where you have employees? Does your plan have enough value-based providers and programs to benefit your team? Make sure to check the geographic distribution and depth of services available, so your employees can realistically use the services of these value-based providers.
How long has your plan’s value-based program been in place? Find out if the program is mature, and whether they have a measurable trend in value. Programs that are older or more established typically have data that demonstrates the results they’ve been able to achieve.
Do the health plan and its providers collaborate? This will show whether they understand the local dynamics, and whether the plan supports the providers in achieving improved performance.
How extensive is the plan’s member base and value-based network? The larger the plan, the greater its ability to share meaningful data and influence care delivery practices.
Does the plan offer flexible options? A one-size-fits-all approach to value-based networks doesn’t necessarily fit the unique needs of your employee base. Take some time to ask your plan how it measures provider performance and how it rewards members for choosing high-performing providers.

Value-based payment arrangements and value-based network design are two trends that have been demonstrating results for companies. Health care is costly. But now, there are strategies that help companies manage health costs while improving health care for employees.

Also read: Performing a Check-up on Value-based Health Care