Telemedicine Companies Can Mitigate Self-Insurance Risks
October 8, 2015
First Stop Health
No matter the economic climate, companies are always looking for new ways to keep costs down, especially healthcare costs. As a result, many are making the switch from fully-funded to self-insured health plans for their workforce. It is estimated that roughly 59% of US workers are currently covered under their company's self-funded insurance plan compared to 41% in 1998*. However, self-insurance is not without financial risks.
The risk of self-insurance
When a company becomes self-insured, it becomes responsible for paying its employees' healthcare claims costs out-of-pocket, rather than paying an insurance premium to a carrier. If employees generate fewer claims than the premiums the company would have paid, the company saves.
The downfall is that the company is responsible for paying all healthcare costs, usually up to a certain amount, somewhat like a high deductible health plan for an individual, but the deductible can be $50,000 - $75,000. For a company which is new to self-insurance, it can feel like jumping in at the deep end; they can estimate how much their healthcare costs will be, but they won't know for sure from year to year and they risk higher than anticipated costs.
Telemedicine is a way for companies to provide medical care to employees at a much reduced cost. Rather than visiting a physician, urgent care or ER for a minor ailment, employees can contact a physician over the phone for diagnosis and treatment, greatly reducing costs.
70% of in-person physician visits can be avoided with telemedicine and 90% of telemedicine calls result in the avoidance of an in-person physician, ER or urgent care visit.
With telemedicine, physicians are available 24/7/365, so employees can have reliable access to healthcare at all times and avoid spending time and money unnecessarily.
Although the employer can benefit greatly from telemedicine's reduced costs, employees are likely to appreciate the convenience of the service even more; they can seek medical help at any moment without having to leave their home or office.
Setting up self-insurance the right way
Any company that is self-insured or considering becoming self-insured should have telemedicine benefits in place accompanied by an education and awareness campaign to help employees understand how the system works.
It should be clear to workers how to use the telemedicine benefit and in what circumstances they should be using it. Employers can then amplify the financial benefits of self-insurance.