It doesn’t matter if you have 10 employees or 10,000 employees – the costs associated with your health plan are likely a problem. The outlook doesn’t look pretty as SHRM points out that costs are approaching $15,000 per employee per year and there appears to be no end in sight.
What is surprising is that employers all over the country are having success not only tempering their costs but also lowering them significantly. All the tools exist we just need to help employers scale them and as Forbes pointed out, a lot of it is happening in towns just like mine – Tulsa, OK.
So What’s The Hold Up
One of the biggest problems is we aren’t focused enough. We know from experience that the design, implementation and execution of employee benefit plans are hampered by annual renewal cycles which unnecessarily slow innovation and improvement. You simply can’t innovate when you are only focused on something once a year. We need rapid iteration and radical improvement. We should be improving the cost, quality and experience of our plans throughout the year and not be dependent on renewal cycles dictated by legacy players. Simply put – we have to change the process.
What Would Google Do?
If Google was running your health plan they would set clear actionable goals in the form of OKRs. What are OKRs?
OKRs, Objectives and Key Results, are a simple structure that helps teams meet goals by outlining specific and measurable actions. Objectives are broad and qualitative and not necessarily measurable. Key Results are specific and quantitative and always measurable.
The highest performers – from large organizations to individuals use some form of this methodology. John Doerr does a great job of telling the story of “How Google, Bono and The Gates Foundation Rock the World with OKRs” in his brilliant book Measure What Matters. He details how in the beginning, Larry Page (Google Co-Founder)would spend 2 days per quarter personally reviewing the OKRs for each and every engineer and Eric Schmidt (former Google CEO) credits OKRs with “changing the course of the company forever”.
What Should You Do?
Each quarter you and your team should work together to identify 3 Objectives and quantify those three objectives with several (1-5) Key Results.
I get that might sound easier said than done. The good news is that if in your role as CEO, CFO or HR leader you are tasked with managing your company’s health plan I have already written your Q3 OKRs for you.
Your Q3 OKRs?
Objective: Develop a process to manage actionable overspend
- Develop framework of overall opportunity based on historical claims data
- Complete analysis of historical claims to stack rank direct contracting opportunities
- Quantify savings opportunities within specialty drug spend
- Interview 3 potential partners in the specialty drug space – including PBMs and specialty only solutions
Objective: Make the jump from reporting to analytics
- Capture all the relevant line level claims data from the past 3 years
- Deliver first data driven business intelligence reports by clinical category and specific procedure
- Interview 3 potential partners in the data warehouse/analytics space
- Deliver outline of data driven continuous improvement plan
Objective: Change the conversation with your employees
- Identify key facts about your health plan that you wish every enrolled member knew
- Gather and commit to sharing actual cost and drivers of cost information transparently
- Interview 3 potential strategic communication partners
- Develop annual communication plan beyond open enrollment, including multiple delivery methods and two-way feedback
- Establish baseline metrics of member satisfaction using Net Promoter Score (NPS)
Let’s start pushing for a return on your healthcare investments. And feel free to ask me about ITINDY (also borrowed) and how it helps you build a prioritization framework alongside your OKRS and frontload your goals for the future..
The broad Objective for all of this? Half the cost and 10 times the delight – all you have to do is fill in the Key Results.