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From Health Reform WK-EDGE, December 19, 2018

Midsize employers must utilize multiple strategies to be successful at controlling health care costs, expert says

By Lauren Bikoff, MLS

Employees that use multiple best practice strategies are the most successful at controlling health care costs, according to Elissa Rosenbaum, total health management strategist at Mercer. Speaking at a recent CFO.com and Mercer webinar, Reinventing Benefits Strategies for Midsize Businesses, Rosenbaum stressed that employers using the most best practice strategies consistently report lower cost trends. According to Mercer survey data, in 2018, those that used the most best practice strategies experienced a cost trend of 2.7 percent, while those that reported using the fewest best practices experienced a cost trend of 4.2 percent.

"Midsize employers can reap the benefits of cost control techniques by employing tactics that larger employers have implemented," said Rosenbaum. "Some of these tactics are cutting edge, and some of them used to be. The employers that are the best at managing their health costs did not just use one strategy. They used multiple strategies."

Mercer identified 24 strategies that employers are using to control costs, and grouped them into three categories. The first category includes basic strategies, such as offering a consumer-driven health plan, a transparency tool, and having a specialty pharmacy plan. The second category contains well-being strategies, which includes well-being incentives and smoker surcharges. The last category incorporates quality and value strategies, which includes cutting edge tactics such as health advocacy or having a telemedicine utilization rate greater than 5 percent.

"Employers with the most success at controlling costs typically use 13 or more strategies. This means that pulling only one lever might not have as big of an impact as you would hope," Rosenbaum said. "Employers need to focus on what is important to them, their company, and their bottom line. The right solution for your company will be different than any other, tailored to fit your individual needs."

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