Editor’s note: Lori Spivey is president of Financial Directions Group, Inc. She will be among the speakers at the Council for Entrepreneurial Development’s “Engage” program on March 31 about healthcare.Entrepreneurial companies in the Triangle are facing increased pressure to fight rising healthcare costs. Smaller companies in order to remain competitive must implement cost-effective healthcare programs that help them to recruit and retain talented employees.

The Engage panel discussion titled “Company as Consumer: Healthcare Cost Cutting Strategies and Implementation Pitfalls” will spend an hour on March 31 discussing this increasingly important issue.

The first place we look for assistance with health care costs is managed care. Managed care has brought significant discounts from care providers. However, at the same time, managed care plan designs have blinded employees from the actual costs of health care. Managed care failures have resulted in unnecessary services, dissatisfied employers, and patients. Recent solutions to the managed care problem have centered on a discussion of “consumer-driven” plans.

New trends and plans

Consumer-driven health care plans are employer-sponsored health benefit programs that educate employees as to the true cost of medical services and hold employees more responsible for their medical purchase decisions. These new models require a more educated health care consumer and, as the argument goes, as these consumers become financially responsible for more of the real cost of health care services, both demand and long-term health care costs will decrease. These new models come in a variety of designs: Health Reimbursement Accounts, Tiered Network Plans, Plan Choice Models, and Personalized Provider Network Plans.

Health Savings Accounts (HSA) are a new addition to this list. Their objective is to couple a high deductible health plan with tax-free accumulation of funds to get employees to treat costs like their own money and to be wise consumers. The high deductible plan can include preventative care, but cannot have office visit co-pays and drug co-pays to which employees have become accustomed. HSA funds roll over indefinitely and may be used tax-free to pay qualified medical expenses including COBRA premiums, retiree health insurance, or long term care insurance, for example. IRS will likely address the many unaddressed issues in guidance planning by early summer. They may be more useful for highly compensated employees who have higher discretionary income or to the younger, healthier population who are least likely to use or need healthcare. HSA plans are relatively complicated and will require commitment for education and decision support tools from employers.

What employers can control

Employers can’t control new medical technology, new prescription drugs and costs, and governmental healthcare costs shifting. Employers can control employee cost sharing, disease management programs, utilization management, and plan design flexing.

The panel discussion at CED’s Engage will explore in more detail some of the cost containment strategies and their potential future impact on healthcare costs for employers. An employee benefits consultant, senior vice president of human resources, insurance law attorney, senior medical director, and a chief financial officer will share their expertise and experience with these critical issues.

About Engage: Engage: Healthcare Industry will explore healthcare’s role in the entrepreneurial economy through a blend of panels, speakers and networking opportunities. The program is set for Wednesday, March 31, from 4-7 p.m. at Duke University’s The Fuqua School of Business. Spivey’s panel, “Company as Consumer: Healthcare Cost Cutting Strategies and Implementation Pitfalls,” is one of three concurrent panels on the agenda at Engage: Healthcare Industry.

For details, visit: www.cednc.org/engage

About The Financial Directions Group: The Financial Directions Group, Inc. is a team of independent investment, insurance and human resource professionals that consult with companies, business owners, and executives to solve their employee benefits, human resource, and wealth advisory goals.