In a recent discussion between Sanjay Motwani Artemis’ GM, Matt Grapentine of Mercer, Leah Motl of Holmes Murphy, and Kerry Gross Arizent’s Director of Research Intelligence, benefits leaders reacted to the results of our annual study that identified the top goals and pain points in the benefits space.
The research results were neck-in-neck with the top three goals of improving employee health and wellbeing, retaining top talent, and enhancing employee satisfaction and engagement. Panelists expressed surprise that cost management did not rank higher due to the larger economic environment and their recent experiences with clients, weighing this against the pressures of retaining talent.
“I was surprised that cost management didn't come in higher. Almost all of my clients are really hitting the cost management efforts pretty hard right now. I think we all would agree that retaining top talent is top of mind too, but I was really surprised cost management ranked where it did,” said Grapentine.
Motl added, “I think some of it reflects the larger economic concerns. It doesn't surprise me that retaining top talent is higher in the most recent survey than it has been prior, but I think we could see some interesting swings depending on the industry. Back to that cost containment, cost management side, a lot of those two things are a little bit at odds. Not that there aren't small things that you can do that hopefully achieve both, but a lot of times that cost management comes with a sacrifice around employee satisfaction and retention.”
Motwani then rounded off the panelists’ comments, stating, “I think the sticker shock for most DFOs and C-suite at the end of last year, related to healthcare cost, was that there is going to be will likely be 6.5% expected average increase to the employer healthcare benefits spend in 2023. In the pandemic days, checkbooks were opened to introduce programs for the improvement of employee health and wellbeing. The cost has now become, again, center stage. We do spend close to 18% of our GDP on healthcare.”
The conversation then turned to the topic of benchmarking strategies and how benefits advisors are benchmarking their offerings against other companies. The research showed that benefits leaders more often lean on industry benchmarks than out-of-industry targets. The speakers discussed the most effective benchmarking strategies and the importance of tailoring benchmarks to each client's needs, emphasizing the need to consider factors such as industry, geography, and competition when selecting benchmarking strategies.
Motl summarized her approach to benchmarking by stating, “I think it's also really important to know the role that benchmarking plays. We have a somewhat joking phrase around here that benchmarking is not a strategy. It doesn't mean it doesn't have value, it does tell you where you are or maybe identify some really big gaps, but it doesn't necessarily tell you what to do about those gaps. I think of it like utilization reporting. My report might tell me that inpatient spend was through the roof last year, but that doesn't necessarily tell me how to reduce it. That's where we need further reporting, further analysis, and more of a strategy. I think it’s really important to go into any benchmarking effort with that in mind. Saying, ‘Okay, this will give us a first glimpse of what's the first step or somewhere we need to focus. Or maybe it tells us we're in line and there is nothing really to worry about here. Let's move on to what we want to do rather than what we have to do in order to keep up.’”
The discussion continued focusing on how data analytics drive the right decisions regarding employee benefits. Most benefits professionals surveyed reported challenges in making data-driven decisions with 7-in-10 HR leaders stating that measuring the efficacy of programs is highly or moderately challenging.
The panel emphasized the importance of having goals that align with programs while testing each program that must be looked at individually. The challenge is to measure the efficacy of programs rigorously, which is hard to do. One way to expand success metrics is by measuring program participation, health outcomes, employee satisfaction, and retention. It is a challenging but rewarding task that requires time and effort.
Grapentine kicked off the response by stating, “I've spent a great deal of time in the last year looking at various types of program measurement. What we're finding is, first off, a one size fits all approach doesn't work. You must really look at each program individually, and you've got to actually spend some time designing the study that you're going to do. Ideally, you would do that ahead of time before the program even goes into place. You would sit down and make sure you've got a measurement strategy and, hopefully, a hypothesis to test. If we're going to do it right, that's the ideal.”
Motl chimed in, saying, “I wasn't surprised to see measuring the efficacy of programs as the top-rated challenge. It's really hard to do it rigorously. So often, we associate measuring whether their program works with ROI. That is a valid measurement, and I understand that everyone's familiar with it and comfortable with it, and if we're paying money for a program, we want to make sure that we're getting that back, hopefully, X number of times. There are a couple of ways that we can expand our ideas of measurement.
Whether that's program participation, are we engaging the people we want to engage that need this program the most? Are we seeing the behavior change that we want to see? Are we getting health outcomes? We know that in the long run, if those things are happening, we are going to see the financial results. Then I think expanding too to not just what is the impact this program has on health claims but what does this have on our larger well-being, more holistic efforts around employee engagement, satisfaction, and retention? How can we tie it back into that as well?”
In addition to talking about how to understand and measure the success of employee benefits programs within an organization, panelists also discussed the different sources of data that decision-makers could use, such as employee feedback, internal benefits reporting or analysis, advisors, industry trends, and benefits analytics from third-party data warehouses. While these are disparate sources of data, combining them all in one source of truth can lead to a better understanding of what is happening within a company. This centralized data is most beneficial for benefits teams, who are not necessarily clinicians or data scientists, when converted into clear insights that translate into potential opportunities or actions they can take.
The speakers discussed the importance of assessing the data and building trust in decision-making. With the right data leaders can identify the right opportunities for top challenges even within budget constraints.
In summary, the speakers discussed the importance of having a clear goal in mind when designing employee benefits programs and aligning them with company culture. They emphasized the need for a centralized data warehouse to track employee utilization and identify trends in order to make informed decisions about program design and implementation. Consolidating data across point solutions can be a challenge, but it can be done by linking everything back to a single eligibility record. When employee benefits professionals focused on creating a data-driven approach, they can tailor to the unique needs of their organization and workforce to best foster a culture of health and well-being.