It’s a common-sense, widely held business principle: What is not measured cannot be managed or improved. Yet, while most employers regularly capture and analyze data about everything from website performance to travel expenditures, few are doing the same for one of their largest expenses: health care.
The oversight could be costing them. A recent study from Willis Towers Watson examined the practices used by employers with high-performing benefits strategies. Among top-performing employers, 53 percent were using data to analyze their health benefits, compared to just 34 percent of other employers. That’s part of the reason the study found these top-performing firms spend, on average, $3,548 less per employee on health care than other companies.
For advisors, providing data-driven insights to employers, especially those who might not have the time or resources to gather and analyze the numbers, can be an excellent way to add value. With the right data in hand, employers are better able to:
- Encourage behavior change. Data can show where plan participants are opting for expensive name-brand prescriptions over cheaper generics or using emergency rooms for urgent or routine care. Employers can then provide education and adjust their benefits plan to drive participants toward more affordable options.
- Mitigate risks. Analysis of current health care expenditures can help employers pinpoint the most common or expensive diseases and conditions in their workforce, such as diabetes or hypertension. They can then provide tailored resources to help employees better manage their conditions, preventing them from escalating into costly medical emergencies.
- Identify trends. Over time, data can show whether the employer’s wellness program or other initiatives are having an impact. If the employer has numerous locations, the numbers can also reveal which locations might need more or different support than others, so resources and wellness initiatives can be adjusted accordingly.
