- Commercial payers struggling to curb costs and encourage their members to make smarter financial choices may be able to save millions of dollars each year by investing in modest member incentives.
Offering small financial rewards for choosing lower cost health services can foster member engagement while producing significant savings for the health plan over time, says Scott Weden, the benefits and wellness manager at HealthTrust of New Hampshire.
HealthTrust is a non-profit organization that provides insurance benefits to public employees like teachers, policemen, firefighters, and local government officials.
In 2014, HealthTrust decided to add to its existing wellness programming and beneficiary education initiatives by entering into a three-year partnership with Vitals SmartShopper, a tool that allows members to identify and accrue financial incentives for choosing cost-effective care sites for common services.
“The pilot program included about 25 members which ranged from large to small beneficiary groups within towns, cities, and schools,” Weden explained.
Initially, HealthTrust’s wellness advisors worked to educate members about the differences in cost for similar services at different locations - and how those hidden price variances can end up making claims more expensive.
Routine services, like a blood draw for a lab test, can range between $150 and $400 depending on where the procedure is conducted, Weden explained. For more expensive treatments, like remicade infusions for arthritis patients, the costs quickly add up.
“In New Hampshire, currently we see a range of $2,500 to $7,000 on remicade infusions depending on where it’s done,” Weden said.
“Is the transfusion done in an infusion center? Is it done through home infusion? Is it done in a hospital setting? If a member chooses one of the cost-effective locations, they earn a $500 incentive for utilizing that service at the cost-effective facility or home infusion.”
A $500 incentive is at the top end of the range offered by HealthTrust, but even a $25 incentive for getting blood drawn at a low-cost lab could be enough to influence behavior.
To alert patients to the opportunity to gain rewards, HealthTrust reviews claims information per quarter and then uses claims data to tailor member communications about popular healthcare services and their accompanying financial incentives.
Wellness advisors are on the road four days a week educating member groups about cost-containment strategies like the SmartShopper program, said Weden.
As part of the engagement strategy, HealthTrust integrated single-sign on capabilities with SmartShopper and members’ regular HealthTrust login. One username and one password allows a member to shop for services that financial incentives and explore other preventive and wellness services.
“We make it very simple for members so that they only have to remember one username and password to get to any one of our variety of partners, whether it’s our Employee Assistance Program, or our biometric screening program,” Weden added.
“We try to make it as easy as possible for them to go in online, which takes no more than five minutes to shop and purchase a procedure.”
HealthTrust also provides phone support so older and less tech-savvy beneficiaries can still access the same incentive opportunities as online shoppers.
“The SmartShopper program is voluntary, and it takes a lot of convincing and a lot of personal touches to get members to engage in this program,” Weden said.
The results have been significant. HealthTrust experienced overall savings of $1.5 million by the end of 2015, which was directly related to the use of 32 incentive-eligible healthcare services from their member populations.
This equated to a return of 813 percent on the financial incentives paid out to members.
By the end of 2016, HealthTrust had saved nearly $2.8 million. By 2017, the organization had doubled the number of incentive-eligible healthcare services from 32 to 64.
Weden says that current HealthTrust data indicates the program generated $2.75 million in savings from January to October 2017.
The 2017 goal was $3.2 million in incentives-driven savings - he believes the final tally will reflect that number once the data is updated.
“We’ve seen continual increase and engagement,” Weden said. “We’ve seen a continued increase in claims savings, as well as incentives being paid to those individuals that are engaging in the program.”
Weden added that the SmartShopper program also helped lower the rates of growing healthcare costs for their members. The cost of healthcare services for HealthTrust beneficiaries has never grown past a six percent increase since the start of the SmartShopper program. Beneficiary populations in other parts of the country are likely to experience much larger increases in their healthcare costs, Weden said.
“The average increase in the nation is anywhere from 17 to 23 percent,” he noted. “The SmartShopper program is driving our medical spend down and driving people through cost containment strategies to different facilities that they may not have used in the past.”
Weden believes that the future opportunities for cost-savings are even higher, since only 10 percent of members are regularly using the SmartShopper program.
He emphasized that using incentives alone is not enough to promote cost-effective care and that payers will require other strategies and tools to do so. These strategies include telemedicine and wellness programs that teach members how to manage their healthcare finances.
HealthTrust is renewing the program for another three years to continue its progress.
“I would like to see the savings grow to $6 million by the end of our next three-year contract,” Weden said. “I think we have room for improvement. We have room for growth, but we are finding that rewarding our members with cash incentives seems to drive the gross savings up year over year.”
“People will seek out education if there’s something in it for them. Our members are going to high quality facilities and they’re receiving a reward. We have been very successful in engaging our membership and getting them to utilize the program.”