2020 Plan Design Changes Driven by Technology and Other Factors

Now that many employers have presumably locked in their health plan designs for next year, with some employees perhaps still navigating open enrollment, it might be useful to see how your 2020 changes measure up against those of other employers. After all, your workers are likely comparing notes with friends and family members at other organizations. Plus, you might benefit from learning how other employers are coping with the universal challenge of managing a health care plan effectively and affordably.

Insights are available from several data sources. One is the National Business Group on Health (NBGH), which recently released results of a comprehensive member survey. The typical NBGH member is a large company with a staff of benefits professionals with the time and expertise to analyze new strategies. Yet the strategies they're adopting typically are open to smaller employers as well — if they establish relationships with the right service providers that serve their market segments.

Virtual Care Boom

High on the priority list for NBGH members in 2020: implementing more "virtual care" programs for behavioral health and physical therapy applications, as well as "digital coaching" and decision support tools.

Sometimes also referred to as "telehealth" or "telemedicine," virtual care is the delivery of health care services and information via various technological platforms without face-to-face interaction between the patient and provider. Half of the surveyed members expect virtual care to have a "significant" impact on employee health in 2020, and another 13% believe that it will be "very significant."

Nearly all (98%) of surveyed members already use telehealth services for minor and acute services, and most also do so for mental/behavioral health, weight management support and "health and lifestyle coaching." With planned changes for 2020, most will also use them for emotional well-being/resilience, diabetes care management and medical decision support.

Strong contenders for virtual care services by 2021 or 2022 are musculoskeletal care management and select specialty medical care, such as dermatology, prenatal care management/coaching, sleep management and cardiac care management.

Full Service, Multiple Plans

Amid all the growing incorporation of virtual care and decision-support components into their health plans, NBGH members are also adding "full-service, high-touch concierge programs that help employees navigate the health care system, reflecting the need to simplify the consumer experience," according to the report. More than one in five (21%) are adding such offerings in 2020, bringing the total up to 60%.

That trend dovetails with the reversal of another one: the growth in the number of employers abandoning a "full replacement" strategy of offering high-deductible health plans as employees' only option. In 2018, 39% of surveyed NBGH members took that approach. But for 2020, the proportion drops to 25%, "largely driven by employee feedback."

Employers returning to offering multiple options typically are adding PPO plans. Still, high-deductible health plans will still be offered by 89% of NBGH members, and combined employee enrollment in those plans is projected to be 46%.

Behavioral Motivation

Giving employees more plan choices doesn't mean giving up efforts to encourage them to take particular actions when obtaining health care services. The "centers of excellence" (COE) strategy — incentivizing employees to use specific medical and surgical facilities — is being adopted at a rapid clip.

For example, the NBGH survey reveals that, by 2020, 47% of respondents will have implemented a COE program in 2020 for specialized orthopedic procedures such as hip and knee replacements. Other big jumps in COE use for next year include:

Continuing rapid growth rates are projected for those COE categories for 2021 and 2022.

Nearly half of employers with COEs for musculoskeletal procedures still cover such services elsewhere, but at a reduced rate. Only about one-third of employers with COEs for cancer treatment and maternity care give their employees incentives to use them.

Along similar lines, surveyed employers are embracing accountable care organizations (ACOs) and high performing network (HPN) provider groups for their employees' care, either by contracting directly with them or promoting ACO/HPN options offered by their health plans.

These are organized provider groups, like health maintenance organizations (HMOs), that provide integrated comprehensive medical services and hold themselves financially accountable to achieve defined health outcomes and financial performance targets. Nearly one-fourth (24%) of survey respondents are adding ACO/HPNs into their health care plans in 2020, and another 34% are considering doing so by 2022.

Social Determinants

An overarching theme behind plan design changes noted in the survey is a growing employer focus on "social determinants of health" — cultural, educational and economic factors that affect employee well-being. For example, stress about personal finances can take a toll on employees' health.

Accordingly, 90% of employers reported that they're incorporating health plan design elements into their overall health and well-being strategies next year that reflect the understanding that financial worries affect personal health. Other social determinants that employers say they're attempting to address, in order of priority, include health care access/literacy, education, food quality/access and housing.

And what impact will these efforts have on plan costs? The NBGH survey suggests that such plan design changes do have a measurable effect, though financial metrics aren't the only way results are measured. For instance, employers expected their costs to go up by 5% last year, but they only went up by 3.6%. For 2019 and 2020, employers believe design changes will slow their health cost trend by one point, to 5% instead of 6%. Time will tell the accuracy of their projections, but the 2018 results are encouraging.

Those projections are close to those coming from another survey by Mercer, which anticipates a 3.9% increase in 2020 for employers that implement the kinds of changes described in the NBGH report — and 5.2% for those that don't. Using average plan costs provided by another employer survey from the Kaiser Family Foundation, that would put the average total cost of single coverage in 2020 at $7,476 and $21,525 for family coverage, with employees bearing 18% of the cost for single coverage and 29% for family coverage.

Bigger Role

NBGH CEO Brian Marcotte summarized the survey results as "good news for most employees." While health plans are adding more services and options, few employees will be facing significant increases in their share of the cost. Whether the results are good or bad news for employers may depend upon the degree to which they're behind or ahead of the curve in implementing the most promising kinds of changes that NBGH members are.

Your organization's ideal plan design will depend on many factors, including budget and makeup of your workforce. Nonetheless, as the NBGH survey makes clear, technology and the other factors mentioned will likely play a bigger and bigger role in future changes.

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