CFO Studio Magazine with Claude Draillard, CFO, Honda Aircraft Company

22 cfostudio.com BENEFITS KEVIN JOYCE W ith the cost of a family health insurance plan topping $20,000 per year (employers typically pay 71 percent of that amount, according to the Kaiser Family Foundation) benefits costs have reached the “ouch” point for many companies. What strategies can help companies control health care spending? At a CFO Studio event, Kevin Joyce, VP Insurance Networks for Atlantic Health System (AHS), which operates hospitals and health care facilities in New Jersey, said vetting insurance plans is usually left to Human Resources, but with rising costs, CFOs are paying attention. His top tip for companies to control costs? Learn where patients can get the medical procedures they need at the best price, and make that information available to employees. Carriers often recommend to their clients that they offer employees access to their Centers of Excellence (COEs) networks as a vehicle to reduce the cost of health coverage. To be considered a COE, a health systemmust apply for designation, and meet very specific cost and quality criteria to be accepted into the network. NEW IDEAS AIM AT CONTROLLING HEALTH CARE SPENDING IN 2020 AND BEYOND Point of Pain USING DATA ANALY TICS TO INCREASE QUALIT Y AND REDUCE COSTS If COEs are not yet available in your area, they’re coming. By crunching large quantities of data, insurers are able to identify cost-effective providers of certain common medical procedures. This is how they develop their COEs’ participation criteria. CFOs who ask the right questions can use this information for keeping their own companies’ health care costs down. As Joyce explains: “Managed care companies will look at their claims data and come up with metrics that indicate which Centers of Excellence provide the best combination of quality and cost.” Although the COE concept has been in existence in health care for a few years, in 2018 only 12 percent of employers contracted directly with COEs. In 2019, the figure rose to 18 percent, according to figures Joyce shared with the CFOs at the CFO Studio event. “I would recommend the COE approach for any size company,” he said in an interview. “For employers who are self-insured, savings go directly to their bottom line.” Atlantic Health System is working with “many payers” to get into their COE programs, says Joyce. “The challenge is that the insurance carriers often close the COE networks to new participants, allowing new applications only once every two or three years,” he noted. Another initiative by Atlantic Health System is a new product it hopes to offer with one of the largest insurance carriers. “For a certain number of patients, Atlantic would have a budget for the total cost of care provided to members affiliated with AHS, and if we go over budget the additional cost would come out of Atlantic’s pocket; under budget, we would share in the upside savings,” says Joyce. After this “risk share model” gets state approval, Atlantic will roll it out to local employers. Did You Know? With the tight job market, for the first time in 2020 we’re seeing a reduction in the amount employees are paying out of pocket for health insurance.