An article posted in the Views section of the Employee Benefit News (EBN) website titled, 5 Steps to Improving Healthcare Benefits ROI, (free registration required) really got me thinking. Author Brain Ancell states that health benefits are a big financial investment, but most employers “don’t understand the value of their benefits package” and “aren’t getting as much as they should in return.”
The article makes several key points that I expand upon to show you how to get more value out of your benefits programs and improve member health.
It’s important to understand why you offer benefits. Most companies provide them to attract and retain employees. But healthcare benefits, in particular, can do so much more for your company.
Unhealthy employees could be costing you a lot more than just claims costs. The CDC reports that:
If employees come to work sick or worried about finances or family members’ health, they aren’t able to give it their all. This is called presenteeism, and could be causing 75% of your productivity losses (General Internal Medicine).
These statistics demonstrate the need to think of your benefit offerings as more than a recruitment tool. They are a critical driver of organizational performance. You need to do more than review your package once a year to keep costs under control and remain competitive.
Designing and implementing a strategy to measure the effectiveness of your programs and the value they deliver requires serious thought. It helps to have partners who do more than just recommend a change in carriers or more cost-shifting to employees.
Your benefit advisors are a good place to start. But too often, you have different advisors for each of your programs—healthcare, pharmacy, workers’ compensation, disability, etc. You aren’t looking at your programs holistically, so you can’t see how changes to one program affect another.
You need to integrate data across vendors to truly assess your benefits package. You should identify an analytics vendor as one of your key partners. The vendor should work closely with your advisors to understand what is driving your costs.
Most analytics vendors look only at medical data, and perhaps pharmacy. While valuable, these vendors can’t give you the holistic view you really need to understand what’s happening in your population. Look for a vendor who integrates data across all your benefits programs so you get a 360-degree view of health, pharmacy, wellness, productivity, workers’ compensation, disability, safety, etc.
You’re probably measuring the effectiveness of your benefits program by looking at morale, retention, and absenteeism. If you have a wellness program, you’re looking at the number of participants. While good to know, these metrics don’t provide the real insight you need to determine the return on investment your entire benefits package is delivering.
You’re also looking at the costs of all your programs. This is critical information, but compared to what? What are other employers in your region or industry paying for their programs?
Benchmarking data is vital so you know how to position your benefits package. You may think you’re offering one of the best packages as part of your strategy to attract and retain the best talent, but are you?
You need sound data to be able to make strategic decisions about your benefits package. There are hundreds if not thousands of metrics you could measure across all your programs. So where do you start? Here are a few questions to ask yourself:
There are many more questions you can and should be asking about your benefits programs. Integrated data will give you the answers you need so can you measure the true value of your employee benefits programs.