Within the employee benefit market, the term point solution has become watered down and leveraged for all add-on programs that complement a core benefit offering. Unfortunately, this has led many benefit professionals to feel like point solutions do not add value. The truth is that some point solutions add immense value while others fall short, but the challenge is the answer is different for each employer.

Employers must consider their healthcare and employee benefit spend, including but not limited to potential incentives; corporate culture and goals related to employee engagement, health and productivity; capability and service guarantees with core providers; and anticipated utilization of core and point solutions to evaluate their offerings and where point solutions may make sense.

Assess Current Offerings

The first step in considering point solutions is to evaluate your current offering(s). Catalog your current partners, what services they perform, what you are paying them, and when your contract renews. In addition, summarize any performance guarantees or return on investment metrics as well as standard reporting that is provided and at what frequency. 

For most employers, this exercise in gathering data related to your offerings will shine a spotlight on a few critical areas:

In order to address these questions and come to any conclusions regarding your point solutions, this assessment needs to run in tandem to a market analysis.

Understand the Market

It is important to understand the plethora of solutions available in the market. The most efficient way to gather this intelligence is to talk with your current health plan and broker/consultant. We help many clients, including edHEALTH, on mapping out and understanding the universe of options in the realm of point solutions and then creating a targeted strategy based on tailored benchmarks. But don’t stop there. Find other resources that can educate you on options, perhaps another advisor or an industry conference. These conversations do not require a deep dive (yet) into each solution. Instead, they should provide enough for you to think about what’s possible as you compare and contrast what you have versus what you anticipate needing in the future.

Identify Pain Points

The most valuable point solutions work to solve a pain point that your core health offering cannot address as well as serve as a targeted comprehensive solution. This is why solutions around specific diagnoses have evolved (e.g., musculoskeletal, cancer, fertility, hypertension, etc.) and for engaged claimants often provide better experiences, more favorable outcomes and even potential cost savings. 

Consider your pain points both qualitatively and quantitatively. Look at data from employees to understand what is not working well for them in the process. Then look at the data from your health plan and understand where you are above their benchmark in spend by major diagnostic category, or have any outliers in the data. For example, our client edHEALTH, a captive for educational institutions, recently began offering a new diabetes management program, which was implemented based on their member schools’ input and supporting data.

Bringing it all Together

Once you have assessed your current offering, gotten a better understanding of what is available in the market, and identified your pain points, it’s time to compare and contrast those three areas of review and arrive at your desired future state. 

Start where program overlaps exist and see if you can simply remove programs without employees experiencing a loss in coverage/benefit. In some instances, those overlapping programs may be provided free of charge from your vendor but still may cause confusion among your employees or be absorbing credits that could be used for other programs. In addition, vendors may be willing to negotiate removal of those services, freeing up funds for other programs. 

After you have explored overlapping programs, consider programs that are currently offered but do not seem to align with your pain points. It’s possible that a point solution is working so well and achieving the desired impact that it is positively impacting spend. If so, this is a point solution you want to continue. Your vendor partner should be able to demonstrate via data how the point solution is working, what employees/claimants are being impacted and how to continue these favorable results. If the vendor partner cannot prove successful data for your population, be skeptical; it may still be a value-add program, but some cynicism is helpful in this very complicated review of point solutions. 

Once you have reviewed overlapping programs and those that do not align with your pain points, you should review all other point solutions against market offerings. Ensure your solutions are keeping pace with the market both in pricing as well as service offering and performance standards. For programs involving considerable spend, a request for proposal (RFP) may be necessary,. For programs with minimal spend, a few calls with competitors may provide enough insight to determine if an RFP is necessary. If your solutions are not competitive, do not have appropriate performance standards, or have not demonstrated their value, you should consider replacing them or, at a minimum, renegotiate with strong performance or return on investment parameters. 

This review must be data driven, but it will often involve both art and science. Sometimes a program may be a worthy partnership for your culture even if cost savings may not materialize. Only you and your team will be able to make that decision, but just because the decision is not solely routed in cost savings doesn’t mean you shouldn’t track utilization, engagement and return on investment. Those may be even more critical for programs that will need to be defended in the future.  Many HR and benefits professionals are feeling point solution fatigue, and are asking questions around impact, risk, and reward. If you could use assistance conducting a point solution audit, or would like advice on best practices in this area, please get in touch with the Spring team.

Current State

Weight loss medications, Glucagon-like peptide-1 receptor agonists (GLP-1RA) s, have risen in popularity beyond anyone’s imagination and there is no sign 2024 will be any different. Endorsements by top Hollywood celebrities, aggressive and compelling consumer marketing, new direct-to-consumer options, and research demonstrating their benefits related to both heart and kidney disease, have left employers wondering if they should rethink their coverage choices.

Many employers have seen the impact on their budgets, adding on average $15,000 annually per patient in pharmacy costs. It is common for employers to focus only on short-term impacts and fail to connect the benefits of weight loss to long-term health care costs and goals. On average, patients who are overweight may incur healthcare costs that are 50% higher than someone of a healthy weight. Is it time we shift our thinking and focus more on the long-term?  Is it possible that there is a subset of your population that would benefit from these medications? Would you reconsider your position if the right safeguards were in place?

The Bigger Picture

Did you know?1

The American Medical Association (AMA), the World Health Organization (WHO) and other medical boards have recognized obesity as a chronic disease by for well over a decade. It is a complex metabolic condition that is impacted by genetics, behavior, and environment. Obese individuals have too much fatty tissue stored as energy within their bodies and their ability to change the body’s response to excess fatty tissue is often unsuccessful despite great efforts. 1 2 3

Obesity’s role in the development and/or progression of many chronic diseases, such as type 2 diabetes, hypertension, cardiovascular disease, kidney disease, stroke, sleep apnea, osteoarthritis, and certain types of cancer, is well documented. A person with obesity has an 80-85% risk of developing type 2 diabetes, and cancers associated with excess weight contribute to 40% of all cancers. It is easy to overlook that obesity not only impacts the physical body but also a person’s mental health.

The CDC reports that more than 50% of adults diagnosed with moderate to severe depression who were also taking an antidepressant were obese. Overall, 43% of adults with depression were obese compared with 33% of adults without depression, and women with depression were more likely than men to be obese. This was true across all age groups among women and was also seen in men aged 60 and older. 3 4

To Include or Exclude

As we enter 2024, the demand for weight loss medications continues and is anticipated to increase since much of 2023 was plagued with drug shortages.  Despite these shortages, the average employer saw double digit increases in the GLP-1RA category which includes drugs for both diabetes and weight loss. Many employers continue to struggle, unable to justify unrestricted access and coverage for their members while striving to offer benefits that provide value and fair access.

As employers look for innovative ways to combat soaring healthcare costs, re-evaluating coverage of weight loss medications to a subset of members could be a critical piece of the puzzle. The International Foundation of Employee Benefit Plans (IFEBP) reports that 22% of employers in the U.S. currently cover prescription drugs for weight loss, and 32% offer weight management programs. Another survey showed up to 42% of employers were revisiting coverage for 2024 and beyond. 5 6 3

This year started off with somewhat of a curveball in this area, with Eli Lilly announcing LillyDirect, a direct-to-patient portal, allowing some patients to obtain its newly released drug, Zepbound (tirzepatide) for as little as $25 a month. LillyDirect uses the telehealth platform, FORM, where patients reach independent telehealth providers who can complement a patient’s current doctor or serve as an alternative care option. This news has been received with mixed emotions. Many obesity experts feel this is a long overdue service that improves access and addresses affordability concerns. Others feel this is another move by manufacturers to circumvent health plan sponsors and improve their market share. Many are calling for transparency between telehealth providers and the pharmaceutical company to rule out any conflicts of interest. 7

If you are exploring adding weight-loss drug coverage to your plan, a critical first step is to ensure members are educated about these drugs, essentially demystifying the media hype. The truth is these drugs are expensive, have side effects, and cannot do the job alone. Inadequate education regarding the side effects and how to manage them has caused many people to stop therapy, resulting in wasted healthcare dollars. The medications must be part of a comprehensive program that highlights the importance of healthy food and physical exercise. Members need to understand their responsibilities and how they will be held accountable for demonstrating their continued commitment to the plan. It has been demonstrated that those who stop the drugs regain, minimally, 75% of the weight because long-term behavioral changes and/or healthy eating habits did not form. 8 2 9 10 3

Employers also need to find ways to monitor their financial interests, such as:

  1. They must be active participants in designing coverage criteria and ongoing monitoring parameters.
  2. They must ensure they create a comprehensive approach, complete with a robust clinical review and ongoing monitoring at frequent intervals to evaluate a member’s response to therapy. As part of that, employers need to recognize the importance and impact that social determinants of health and health equity have when discussing weight.
  3. Determine ways to implement opportunities for members to access healthy food choices and physical activity and add additional wellness incentives to your benefit offerings.
  4. Be sensitive to the views/ or needs of your employees; do not make the out-of-pocket expenses so significant that they essentially restrict access.
  5. Finally, monitor your financials closely, request frequent in-depth reporting, and hold your PBM accountable for ensuring appropriate coverage/monitoring, access to competitive pricing, rebate incentives and formulary placement.

Conclusion

Ultimately the choice to cover these medications is an organizational decision, but it’s critical to have all the information necessary to make this decision, starting with a robust view of your population demographics. With high rates of obesity for most health plan sponsors, a prudent and thoughtful approach to expanding weight-loss coverage will be required. Attempts like this to tackle the obesity epidemic could produce long-term savings with lower overall healthcare costs, prevention of progression of existing diseases, and, most importantly, a better quality of life and employee experience. It has also been demonstrated that many people would remain at a job solely to retain coverage if offered and approximately 44% of people surveyed reported that coverage of these medications could be an important decision point in whether to accept a new position. 11 4 12 13 14 6 8

No matter your decision on offerings, the more you can offer through communications and education will help your plan participants make informed decisions and understand their role in achieving and keeping weight off. To realize tangible results, all parties must be committed. If you could use guidance around weight loss drug strategy or would like a clinical pharmacist to assess your population and needs, please get in touch with the Spring Team team.

1 https://www.cdc.gov/obesity/data/adult.html
2 Obesity Statistics. The European Association for the Study of Obesity.
3 Public Health Considerations Regarding Obesity. StatPearls
4 https://www.hsph.harvard.edu/obesity-prevention-source/obesity-consequences/health-effects/
5 https://ir.accolade.com/news-releases/news-release-details/glp-1-coverage-employer-plans-could-nearly-double-2024
6 https://www.cdc.gov/nchs/products/databriefs/db167.htm
7 https://investor.lilly.com/news-releases/news-release-details/lilly-launches-end-end-digital-healthcare-experience-through
8 https://icer.org/news-insights/press-releases/icer-publishes-evidence-report-on-treatments-for-obesity-management/
9 https://www.webmd.com/diet/obesity/obesity-health-risks
10 https://www.npr.org/sections/health-shots/2023/01/30/1152039799/ozempic-wegovy-weight-loss-drugs
11 https://jamanetwork.com/journals/jama/fullarticle/2812936
12 https://www.ama-assn.org/press-center/press-releases/ama-urges-insurance-coverage-parity-emerging-obesity-treatment-options
13 https://www.milliman.com/en/insight/payer-strategies-glp-1-medications-weight-loss
14 https://www.niddk.nih.gov/

In a recent article published by Yahoo Finance, Reliance Matrix was ranked as the most popular absence management provider according to Spring’s annual 2023 benchmarking survey. Check out the full article here.

In a recent article published by BusinessWire, Reliance Matrix was ranked as the most popular absence management provider according to Spring’s annual 2023 benchmarking survey. Check out the full article here.

Spring’s Senior Vice President, Prabal Lakhanpal will be presenting at Business Insurance’s World Captive Forum on January 25, 2024. His session will cover new emerging risks and provide tactics for improving captive risk distribution frameworks. You can find the full update here.

As we enter 2024 in an interesting economic and workforce environment, benefits professionals are once again looking to get creative with their offerings and ensure that they align with cultural and corporate objectives as well as budget. 

There is one benefit in particular that, while not new, has been gaining traction over the last few years and we expect continued momentum and adoption in 2024: lifestyle spending accounts.

What is a Lifestyle Spending Account?

A lifestyle spending account (LSA) represents a range of flexible benefits accounts that employers can offer to employees as funds toward eligible expenses related to health, wellness, and personal needs and interests. The employer defines what an LSA can be used for, with many companies including pet care or services, travel, leisure activities, and home improvement within their list of qualifying expenses. In this way, they cover a much broader spectrum of needs beyond those that are applicable within a Flexible Spending Account (FSA) or Health Savings Account (HSA).

Pros and Cons

Many employers are considering or implementing LSAs for their employees because they provide the following key advantages:

LSAs aren’t for every company, though. Some factors that might indicate an LSA isn’t the right path are:

Looking Ahead

LSAs are becoming more and more popular; a 2023 Benepass study shows that 51% of companies are offering this benefit, as compared to 37% in 2022. Optum’s 2022 Financial Lifestyle Benefits Research found that 37% of benefits professionals were planning to add to or update an LSA in the coming year. At Spring, it has been a topic of interest for many of our clients as we refine our strategic benefits plans and consider program enhancements. If you are interested in an LSA but need guidance around implementation, processes and best practices, please get in touch and we would be happy to help you explore the option.

1 https://www.mercer.com/en-us/insights/us-health-news/lifestyle-spending-accounts-your-top-questions-answered/

With winter quickly approaching, the Cayman Captive Forum last week provided a great escape from the cold weather and a fantastic excuse to visit a tropical paradise. As Cayman is the second largest captive domicile (behind Vermont), it is more than a vacation spot; a rewarding opportunity to address top trends and practices in the captive insurance and risk management space. Here are some driving topics of interest this year:

AI and Risk Management

As concerns surrounding artificial intelligence (AI) dominate headlines and conversations worldwide, it was only fitting that it was a popular topic of discussion this year at Cayman. AI holds an interesting position in risk management, in that it can be used to help identify risks and create efficiencies; but also can create vulnerabilities in cyber and digital. Here are a couple of innovative sessions on AI’s impact on risk management:

– During the presentation “AI and your Captive,” beverage distributor, Southern Glazer’s Wine and Spirits explained how they were able to optimize their captive using AI and machine learning tools.

– In the eye-catching session, “Chat-GPT/AI Concerns in Claims/Risk Settings,” risk experts reviewed how AI is being used in cyberattacks, especially towards healthcare organizations. They also examined the recent emergence of AI chatbots in healthcare.

Cyber Risks

This year there have been over 327 healthcare data breaches reported to the US Department of Health and Human Services, involving more than 40 million patients’ data1. Cyber is a top priority for risk managers, especially those working for healthcare employers. Here are some highlights:

– The session, “Complex Cyber: Renewal to Claims” looked at current cyber insurance market trends for healthcare organizations and recommendations for protecting patient information from adverse incidents.

–With emerging technologies, cybercriminals have more tools than ever at their disposal. A presentation titled “Cybersecurity Trends and Tomorrow’s Challenges: Future-Proofing Your Organization” highlighted strategies to combat evolving cyber threats.

Risk Face by Healthcare Organizations

As Cayman is the largest domicile for healthcare organizations2, healthcare-related risks receive a lot of buzz each year, and 2023 was no exception. Healthcare organizations face unique challenges, some of which include:

a) Social Risks

Within the healthcare sector, risk management teams must balance distinctive social and legal issues on top of day-to-day operations. Some noteworthy sessions included:

– The presentation, “The Impact of Social Inflation on Captives and Others,” reviewed shifting trends in medical professional liability and explored how risk management teams can better understand changing social influences and the risks tied to them.

– One engaging session entitled, “Reproductive Care Post-Dobbs: Protecting Patients and Providers,” provided insights into how a healthcare organization was able to identify emerging risks associated with reproductive care.
b) Workplace Safety and Medical Malpractice

With unique risks come unique coverages. Healthcare organizations often must turn to specialty insurers and experts to evaluate risks associated with workplace violence and medical malpractice. These topics were widely discussed during the conference:

– In the one-of-a-kind session, “Active Shooter Workplace Violence – Claims Coverages Consequences,” the Captive Owner from the University of Pittsburgh Medical Center drew takeaways from their mass shooting over a decade ago.

– A session on “Implementing Structured Communication Processes to Avert Malpractice Claims & Reduce Patient Harm” spotlighted how nearly half of malpractice claims come from miscommunication and provided suggestions on streamlining communication.

– The final session of the conference “People Behaving Badly” reviewed a high-profile case where medical providers harmed patients and professional liability considerations for healthcare companies when disciplining or terminating staff.
c) Other Priorities

In addition to the topics discussed above, some other notable healthcare industry-focused sessions included:

– As virtual care continues to be popular post-pandemic, a group of risk experts discussed recommendations for “Managing the virtual practice of medicine in multiple states & the unique risks associated with this practice.”

– In a virtual session, “A total guide to total cost of risk,” an actuary and captive consultant discuss how to properly calculate and identify Total Cost of Risk (TCOR) and suggestions on how to adjust to changes in TCOR.

The Cayman Captive Forum was a strong finish to the year in terms of lessons learned and connections made. The farewell beach party is always an added bonus!  We welcome this chance to reflect back and look forward to what 2024 has in store for the captive space.

1 https://www.urologytimes.com/view/health-care-cyberattacks-soaring-in-2023
2 https://caymanintinsurance.ky/about/

Title:

Consultant

Joined Spring:

I joined Spring in July 2017, shortly after I graduated from college.

Hometown:

I was born in Maine but grew up in Stockton, NJ. It’s a really small town and my elementary school only had about 60 people in it total.

At Work Responsibilities:

I work on our Absence Management Team and primarily help clients with their absence policies, as well as health and Rx plans. I also spend a lot of my time monitoring the paid leave landscape and updating our clients on legislative developments that may impact their leave programs throughout the country.  

Outside of Work Hobbies/Interests:

I recently moved back to NJ and spend a lot of my time with my family and dogs, reading, and exploring my new neighborhood.

Fun Fact:

I spent a semester studying abroad in Cape Town, South Africa!

Describe Spring in 3 Words:

Dedicated, Invested, and Fun

Favorite book (or one you’ve recently read):

I just finished All The Light You Cannot See. I don’t think I can pick an overall favorite book.

Pets:

My family dog Scout (Chocolate Lab) and my “nephew” Alan (Red Lab) but I consider them mine 😊

Captive International has released the winners for the 2023 US Awards. Spring is proud to announce that our Managing Partner, Karin Landry won the Best Feasibility Study Individual. We were also highly commended for Best Actuarial Firm, Top Feasibility Study Firm, and Top Captive Consulting Firm. Our team was also highly commended for the following: Best Individual Captive Consultant (Karin Landry & Prabal Lakhanpal), Best Individual Feasibility Study (Prabal Lakhanpal) and Best Actuary (Peter Johnson & Nick Frongillo).