3 Important Ways Digital Innovation is Transforming Healthcare


Medical advancements are reaching new heights thanks to innovations in the healthcare tech arena. But what about how you as a plan sponsor and your employees are accessing healthcare to make the most of these advances?

Digital transformation is revolutionizing both direct-to-consumer and direct-to-employer healthcare offerings. Here are three ways digital innovation is transforming the healthcare sector, making it easier for employers — especially those with self-funded plans — and their employees to maintain wellness, reduce absenteeism, and minimize costs:

1. Technology is improving both employer and employee satisfaction.

A monumental outcome of the healthcare industry’s rapid digital transformation is its capacity to improve customer satisfaction. The best part? It does so at every level: individual patients are more satisfied with their coverage and providers, and plan sponsors also experience greater satisfaction with their self-funded plans.

At the employee level, advancements like patient portals and member self-service platforms make it easy for patients to schedule appointments, find in-network providers, refill prescriptions, receive test results, and communicate with their providers. Digitizing the intake process saves patients time and stress by allowing them to complete forms on their own time before their appointment. Virtual appointments make it much easier for patients with busy schedules to avoid time-consuming travel or those with children to arrange childcare.

But digitalization isn’t just increasing employee satisfaction for organizations opting for self-funded care — it is also saving them time and money. Annual health visits help patients recognize risk factors before they become larger problems. In addition, yearly vaccines, such as the flu vaccine, reduce the likelihood that patients will become sick and have to miss work. Through their TPA relationship, plan sponsors can now send push notifications to remind patients about their upcoming appointments and give nudges when it’s time to schedule an annual visit or vaccination. After receiving a push notification reminder, patients can even make appointments directly within their patient portal.

Furthermore, patients can use their portals to ask providers questions and request prescription refills. Digitizing these communications expedites care and eliminates the expense of an office visit.

Other technological advancements, such as fitness trackers and apps, encourage patients to be more engaged in their health — increasing the potential for healthier individual practices, such as regular exercise. According to a recent study, middle-aged patients who exercise regularly tend to save an average of $824 to $1874 on healthcare costs annually. Another study from the IQVIA Institute for Human Data Science suggested that apps and wearable devices could save the US healthcare system $7 billion per year. The data shows that patients who are more engaged in their health can often avoid escalation in medical care, further reducing absenteeism for employers.

2. Digital innovations allow companies to reimagine product development.

Digital innovations allow for greater customization of healthcare plans, as technology can now gather robust and accurate data to inform product development decisions. Technology-powered data analysis and greater transparency into employees’ benefits usage offer greater capacity for customization and greater potential that plans are cost-effective.

Self-funded plans featuring robust technology customization, in particular, are smarter than before, and are no longer just for large corporations. TPAs can collect data on how employees interact with their benefits and coverage. Empowered with this data, they can advise companies on how to make their benefit plans more cost-effective and more aligned with their employees’ needs. A technology-led quality TPA knows how to harness data to tailor each self-funded plan to its sponsor’s population and budget. For employers with complex needs, such as those with Minimum Essential Coverage (MEC) plans, technology is a true game changer, making it easier to track employees’ hours and keep accurate records.

Technology also enables TPAs and their clients to be proactive, leveraging employee usage data to drive participation in wellness initiatives. If employers notice a high incidence of diabetes or cholesterol medications, they may institute positive behavior modification programs, thereby promoting greater employee wellness while also inciting lower long-term medical costs.

3. Technology drives productivity.

In nearly every industry, technology is improving administration — driving productivity, reducing human error and omissions, and cutting costs by slashing manual repetitive tasks. The healthcare industry is no exception. Healthcare providers’ admin costs can be contained, if not lowered, as patients can now self-serve, accessing the information they need 24/7 from within their portals. Digitized patient onboarding eliminates the need for manual input, and lowers paper and storage costs. And with digitized files and forms, it is easier and faster to do any multitude of tasks, including locating files, sending bills, processing online payments, and much more.

Technology makes it easier for self-funded plan sponsors to:

  • Pay invoices and track payments
  • View open, pending, and paid claims
  • Automate enrollment
  • Handle eligibility by employee type, hours worked, and more
  • Collect employee hours
  • View statuses and run reports in real-time

And for their employees to enjoy similar ease, such as the ability to:

  • Check claim statuses
  • View benefits enrollment and details
  • Search for providers

In the hands of tech-led TPA, these digital advancements have the power to dramatically reduce administrative strain on plan sponsors, spur productivity, and significantly rein in costs.

Learn how MagnaCare’s innovative technology can transform healthcare for you and your employees.

MagnaCare’s award-winning advanced technology platform modernizes self-funded plan administration. As a TPA technology leader, we remove the burden of managing enrollment, benefits, and claims and create ease with one intuitive interface. With MagnaCare as the TPA, plan sponsors get customized and affordable plans and all the support they need to elevate their employees’ health and engagement. Contact us to learn more.



Decoding the Inflation Reduction Act: How the New Law Will Affect Self-Funded Plans

The Inflation Reduction Act (IRA) of 2022 is an expansive law that makes a few important policy changes to the U.S. healthcare system. Signed into law on August 16 as part of Biden’s Build Back Better Plan, elements of the IRA aim to reduce the costs of prescription drugs by tightening regulations on pharmaceutical companies providing medication to Medicare recipients. The healthcare portion of the law currently focuses on capping or lowering costs specifically for Medicare recipients, so employers may be left wondering how — or if — they’ll be affected by this new legislation.

Here we break down two of the most important features of the IRA, what they mean for healthcare costs, and specifically how they may affect self-funded plans:

1: What the IRA does for prescription drug costs: caps all out-of-pocket costs for Medicare recipients and allows Medicare to negotiate the prices of prescription drugs. 

Until now, Medicare has been unable to negotiate prescription drug prices with the private companies it contracts with as part of a “non-interference” clause. The new IRA will allow the United States Secretary of Health and Human Services to begin negotiating prices of 10 high-cost prescription drugs covered under Medicare Section D in 2026. These first 10 drugs will be selected and announced by Medicare in 2023. By 2028, 20 high-cost drugs will be up for price negotiation.

This component of the law is also designed to dissuade pharmaceutical brands from engaging in price gouging by requiring any company that increases the prices of their prescription drugs higher than the rate of inflation to pay a rebate to the government.

Furthermore, beginning in 2025, all Medicare beneficiaries, regardless of income, will enjoy a $2,000 cap on out-of-pocket prescription drug spending. Those who take insulin will see a $35 a month out-of-pocket spending cap on the medicine as early as 2023.

What this cap and negotiation means for self-funded plan sponsors:

Before the IRA became law, the government lacked the power to regulate much of drug pricing. Increased regulation will be a watershed change for pharmaceutical companies that have become accustomed to raising their drug prices faster than the rate of inflation, with no penalties for doing so. Because of this, some have expressed concern that pharmaceutical companies will attempt to make up for the lowered Medicare costs by charging employers more. On the other hand, as a result of the new pressure on drug companies and the penalties in place for price gouging, plan sponsors and their employees may see prescription drug prices begin to stabilize.

Widely affordable prescription drugs would be a huge boon for plan sponsors because the lower prices would likely bring down the cost of employer co-pays and help limit costly emergency doctor or urgent care visits incurred by lack of access to medication.

Let’s take, for example, the new out-of-pocket cap for insulin. According to Yale University, more than 7 million Americans rely on daily insulin, a notoriously expensive drug, the cost of which is currently rising faster than inflation.

In an earlier draft of the IRA, this insulin cap was meant to apply to all individuals taking insulin — including those under private, employer-sponsored plans. While it would have been a major win for plan sponsors, this part of the act was struck down before it ever became law, limiting the cap only to Medicare beneficiaries. Still, some believe that capping the cost of insulin for Medicare beneficiaries could curb the rising costs of the drug in the long term — ultimately stabilizing the cost of the drug for private plan sponsors as well.

2: What the IRA does for insurance plan subsidies: Extends ACA health insurance plan subsidies to 2025.

Originally meant to last only two years (2020–2021), the IRA extends temporary subsidies put in place by the American Rescue Plan Act to 2025.

The original subsidies reduced premiums for individuals who chose to purchase their health insurance coverage through state- and federal-run Affordable Care Act (ACA) marketplaces. The extension of the subsidies allows individuals to continue to afford their premiums within these plans.

What this subsidy extension means for self-funded plan sponsors:

At first glance, this section of the act may seem to apply only to individuals purchasing their own insurance, and not to employers. However, SHRM writer Stephen Miller encourages organizations with more than 50 employees to use this extension as an opportunity to verify that they are offering ACA-compliant healthcare coverage to their employees. With more individuals taking advantage of the subsidies to afford care, tax credit receipts may help the government identify and penalize organizations not offering proper employee care.

Employers can provide their employees affordable, ACA-compliant care through a customized, self-funded plan.

The bottom line: It literally pays to be strategic with your healthcare benefits plan.

While the IRA of 2022 is unlikely to affect plan sponsors in the short term, it’s possible that increased access to subsidies may mean the government will be more aggressive toward employers who are not providing ACA-compliant coverage to their employees. It’s also possible that out-of-pocket spending caps for Medicare recipients and penalties for drug companies engaging in price gouging may gradually stabilize prescription drug costs — potentially reducing employer co-pays and spurring wider access to necessary prescription drugs.

Plan sponsors looking for more immediate relief from the rising healthcare costs spurred by inflation may be able to save by switching to self-funded coverage. As an experienced and tech-forward Third Party Administrator, MagnaCare works with you to create a custom plan tailored to your workforce, budget, and needs, with ancillary benefits coverage and a case management program for employees with more complex needs. Plus, MagnaCare handles all administration from enrollment to claims processing. Contact us to learn how we can help you provide your employees with affordable quality care.