Plan sponsors’ priorities need to be met

It would appear that the industry as a whole is getting further and further away from obtaining unbiased plan sponsor perspectives. The content of industry conferences and seminars are controlled to a growing degree by event sponsors. That’s understandable because those paying the bills for the event want to control what is presented and by whom. It’s hard to find fault with that, but as content-controlled educational seminars are becoming the norm, the audience is also changing. Plan sponsors are often the least represented stakeholder group in many important industry events. Carriers, plan advisors, manufacturers/vendors and service providers tend to dominate the attendees list. The trend toward securing continuing education credits for these events doesn’t appear to be helping in terms of diversifying audiences and attracting plan sponsors.

This all culminates in a progressively diminishing feedback loop with plan sponsors less and less connected, and those attempting to impact plans losing the vital perspective of the end customer. It’s strange to see the customer become an afterthought in product and service development and in the context of important industry gatherings.

Read: It’s time to rethink prior authorization

In May, the first Cubic Forum took place in Toronto. It brought together plan sponsors representing more than 400,000 active and retired employees. The plan sponsors were from across Canada and included clients of all of the major carriers. The following areas were targeted as the greatest areas of interest by these plan sponsors prior to the forum, and were highlighted for deeper discussion by the audience:

• Cost containment – Absolutely no surprise here. Ninety-five percent of participants highlighted this as a priority area of focus. What is perhaps more surprising is that this has come on the heels of the most tranquil period of health plan cost increases in recent history.
• Managing high-cost drug claims – Again, no surprise that 95% of participants also highlighted this as a priority area for discussion with their peers. The message to the wider industry is that reliance on existing, passive, prior authorization protocols will no longer suffice. Overhauling how high-cost claims are managed will not be a passing fad, and it’s not likely to be addressed solely by the fifth, sixth, or 10th carrier coming out with its “specialty pharmacy network” to shave off a few percentage points on drug mark-ups.
• Measuring plan performance – Seventy-three percent of plans sponsors prioritized this need. This is a figure which compares with various statistics from the 2015 Sanofi Canada Healthcare Survey related to information plan sponsors are seeking to connect the dots about what their investment in health benefits is returning. There’s a need for better information to drive decision-making, and forward looking information, not simply a summary of what happened 12 to 24 months ago. In healthcare benefits, the past does not dictate the future. Old ways of measuring performance and guiding decision-making are obsolete.
• Weighing health benefit design changes – There is a common frustration expressed in industry circles that so much has been done in recent years to create new plan design solutions, but that at the end of the day, plan sponsors aren’t looking to disrupt the status quo and make any meaningful change. Seventy-percent of plan sponsors who met in May would disagree. There is clear understanding that 2015 to 2018 will be vastly different from the 2011 to 2014 era. What is less clear to plan sponsors is what changes should they be contemplating that result in a clear win-win for the plan and their members, and how to best address issues on the road ahead as opposed to those in the rear-view mirror.
• Preferred provider networks (PPN) – Interestingly, two-thirds of the plan sponsors prioritized either enhancing/revising their existing PPN or developing one. It will no longer only be the very small minority of influential plans that have a PPN moving forward—it will become the norm. What was even more interesting is that the participants didn’t reference specialty drug PPNs as a priority. They understood that shaving some mark-up on fewer than 1% of all claims was less relevant than establishing meaningful partnerships with providers across the 99% of their claims that aren’t specialty. If they have solid relationships on 99% of their business, and 99% of the opportunities to intersect with and add value to their members, how hard will it be to engage the same vendor(s) to help manage the other 1%?
• Stop-loss coverage – More than 60% of plan sponsors cited stop-loss as a major area of focus in the future. This isn’t an enormous surprise given the focus on high-cost drug claims highlighted above, but still worth noting. The status quo of having no visibility into stop-loss rates and having limited options is not likely to continue. Brian Lindenberg covered the topic off with very well in a recent column, Health pooling: Is there a better way?
• Measuring investments in health and wellness – More than 60% of plans highlighted this as a priority. The topic of health and wellness has often been criticized as one that’s hard to measure because the savings are “soft” and don’t translate back to the plan sponsor in meaningful ways. It would appear that sentiment is changing with realization that a great deal of data is available that can be used to measure return on investment, and the fact that carriers are starting to devote more resources and attention to this area.

Read: What could plan sponsors do with $61.6 million every year?

Interestingly, topics that sank to the bottom of the list of priorities and areas of focus for this group of plan sponsors:

• management of short-term disability;
• management of long-term disability;
• concerns around cost-shifting to members; and
• communication to senior management colleagues and to plan members.

It was very interesting to see the appetite for meaningful change that positively impacts both plans and their members, and it was equally as interesting to observe from the audience that the greatest success stories in plan management have involved change driven by the plan sponsor.

Read: 8 important benefits plan metrics to consider

Hopefully some of this feedback directly from the perspective of plan sponsors is helpful to industry stakeholders of all types in reassessing their product and service development strategies. I hope it’s valuable as well in highlighting to plan sponsors at large the importance of finding opportunities to share their priorities and needs with the wider industry, in the hopes of better aligning product and service development with immediate areas of concern.