Impact of Corvid-19 on Corporate Benefits: The Uphill Battle Just Got Steeper
It seems like 4 short weeks ago, like many other people across the U.S., we were looking forward to March Madness, Spring, maybe a summer trip, planning corporate conferences, attending a wedding, and explaining to others why a dog was barking in the background on our web meeting. It is amazing how quickly things can change.
Today, we are all trying to figure out how bad the threat of CORVID-19 (Coronavirus) is for our own health, let alone for the ones we love and care for including our parents and those we work with. We are all coping with the concept of working remotely (from home) if this was not previously in the cards, while also having our children at home as well. We are all dealing with a new sorted reality.
As we begin to adjust more rapidly to the rapidly changing situation we are all in, some of the business as usual things that must still get done, must still get done. As Gamestop, the video game retailer, wrestles with being a essential business, companies like OrchestraRx who helps companies, employees and their families access prescription drugs, treatments, therapies, and help manage their health through telemedicine and coordinated logistics with health care providers across the United States. A significant responsibility OrchestraRx has is in negotiating with pharmacies and drug manufacturers competitive prices which we transparently share with our clients and members, and we also create health management solutions with these partners and many others to help members live their healthiest life by reducing friction and barriers that prevent the healthiest you possible. As we continue, uncompromised by recent events, there are 3 things which continue to impact corporate benefits which we continue to help our clients amidst the CORVID-19 pandemic.
Impact #1: Rising Cost
Depending on what source you rely on or who your consultant or PBM is, healthcare cost continue to rise and pharmacy cost are escalating even more rapidly. PWC cites that medical cost in 2020 are estimated to increase by 6.0%. This was before the Coronavirus outbreak. With eyes off the ball, potential drug supply issues and relaxed drug administration allowing for extra supply of some drugs to be filled by members in anticipation of a serious outbreak, the cost of drugs may increase sharply.
PWC also cites the rise of "employer activism" where employers are increasingly becoming more hands on than just relying on consultants, or outsourcing their programs almost blindly. This is a positive trend. Many financial planners highly suggest not spending money unchecked, but to create a budget, understand where money is going, planning for the future and cutting where cuts should be made and investing where most prudent to do so. The same rules apply for managing your corporate benefits programs. The smartest and most successful employers managing below the cost curve are these "activist employers" that are well intentioned and not afraid of getting their hands "data dirty" to finally understand they have more control and options to control cost than every before.
Impact #2: Managing Chronic Conditions: The Uphill Battle Just Got Steeper
Employers have turned to wellness programs, apps, incentives, and other means to help members and patients with chronic conditions. Most realize that the spending for such programs do not seem to be helping. The recent CORVID-19 pandemic is uncovering some of the underlying challenges with helping these patients and redefining what "help" actually means. We have seen segments of the economy being laid-off, without access to healthcare, using telemedicine as an alternative, and socio-economic factors in play. These Social Determinants of Health (SDoH) are critical engagement points to help improve and measure the health and impact on health and cost. Prescription drug and pharmacy management is the window to vast amounts of data and opportunities to engage and dramatically flatten the cost curve for discrete populations suffering from chronic conditions. Nimbleness, data, and flexibility are key ingredients to successfully managing these members to achieve their healthiest self without compromising cost or quality standards.
Impact #3: Unintended Consequence - "Status Quo"
With so much changing daily including workforce management, corporate policies, re-prioritizing key strategic initiatives, one can easily succumb to the temptation of not changing anything in light of CORVID-19 despite the impacts to corporate benefits mentioned above. If opportunities take the opportunity to leverage the atmosphere of change we are operating in, then they can safely optimize current benefit designs and engagement programs to effectively reduce the rising strain on corporate healthcare cost that are rising.
Whether you plan to hire a new consultant, do more yourself, reach out and ask more questions, conduct an RFP, interview new partners, etc. you have the opportunity to not do the very thing that may exacerbate the strain on corporate HR in a CORVID-19 environment and rely on the status-quo.
What are you planning to do with this opportunity to lead in a time of crisis? Heros & heroines come in all shapes and types, that includes in HR, Benefits, and Consulting.
Be Well. Be Safe. Be Smart.