Panel pushes for cost savings in state employee health care

DOVER — The committee that reviews health benefits offered to state employees voted Monday to make some changes to copays in an effort to encourage workers to seek better and cheaper care.

The State Employee Benefits Committee lowered some copays while raising others, potentially saving the state around $2 million. Copays for basic imaging, currently $20, will go to $35 when a patient visits a hospital-based facility but will be zero for free-standing facilities. State employees who use freestanding sites for MRIs and CT scans will continue to have no copay, but the fee for using a hospital for those services jumps from $35 to $50. For outpatient lab work, non-preferred labs will now carry a $20 copay while preferred labs will remain at $10.

Additionally, as part of a plan to encourage competition, certain facilities will be designated “centers of excellence” for orthopedic and spine procedures. Those that do not receive the title will carry higher copays for the select care for individuals with state health benefits.

“The State Employee Benefits Committee today made some minor adjustments that will incentivize employees to use services that provide the best value for what is needed for their health care and we’ll continue to monitor going forward what our experience is with regard to the slight changes in copays,” Office of Management and Budget Director Mike Jackson said after the meeting.

Members spent most of the meeting discussing ways to stem cost increases, which they stressed cannot be done overnight.

State employee health care is a major driver of budget growth. According to representatives from the risk-management firm Willis Towers Watson, medical costs are expected to hit $790.2 million this fiscal year, which concludes June 30, and $843.2 million the following year.

“This is a very small step in my opinion, and it’ll probably take a couple years to be able to see what the true impact is,” Mr. Jackson said of the vote.

In recent years, officials have begun focusing on achieving better care at a lower price, seeking to shift the state to a model where state employees (and subsequently, Delaware government, which covers about 90 percent of employee health care costs) pay for the quality of their care.

Officials plan to ramp up efforts to engage employees and get them interested in and paying more attention to their health care. A preliminary strategy would have the state shift all employees who do not renew their health plan in two years to a cheaper, more basic plan.

Treasurer Ken Simpler tossed out several ideas that could potentially save the state money, such as changing the copay scheme.

The current one, Mr. Simpler said, has flaws and lacks a coherent “theme.” If the state is seeking to incentivize employees to always visit freestanding facilities, it could potentially offer no copays for those centers but even higher copays for services at hospitals, he said.

“If we go where’d we’d like you to go, it’s always zero. I could remember that,” he said.

Mr. Simpler also advocated for premium increases, calling them an easy and fair way to make employees more responsible for their care and erase any projected deficits in health care funding.

Premiums were last raised two years ago.

The committee will continue to study data and make revisions in years to come, which could include, for instance, requiring tobacco users to pay slightly more for their benefits since they are more likely to need some type of care.

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