Katy Area Chamber of Commerce’s “State of Healthcare” luncheon on April 23 at the Community Room at Legacy Stadium, 1830 Katyland Drive in Katy, featured an employer-focused panel discussion with leaders in HR, employee benefits, and risk management, followed by a keynote address from Dr. John Zerwas. Mike Schofield, State Representative for District 132, was the emcee.

Dr. Nomita Bajwa, director of multi-sector partnerships for UH Population Health, moderated a panel discussion on what rising healthcare costs mean for employers and what businesses can do in response. Panelists included Jason Hodge, owner of Medical Fitness Pros, representing small employers; Stacey Primeaux, vice president for human resources for Mac Haik Enterprises, representing medium-sized companies; and Lance Nauman, director of risk management for Katy ISD, representing large employers. Mike Alexander Jr., president of ABM Insurance & Benefit Services, provided expertise on the insurance industry and advice on working with an insurance broker.

Bajwa said that rising health care costs impact an employer’s ability to offer meaningful benefits, and that rising health care costs don’t have a single cause – with a variety of factors including employers, payors, policies and utilization. She asked Hodge how small businesses were being affected, and he responded that it was a lot different for small businesses than large ones, primarily due to cost. Even a small change can make a big difference for a small company, Hodge said, explaining that due to his own cancer diagnosis, insurance costs increased 92 percent for him and for his employees. From the mid-size employer perspective, Primeaux said that employees in the Mac Haik family of companies were experiencing “more and more chronic conditions” and more options from a specialty pharmacy perspective with the increasing popularity of GLP-1s and other drugs. Yet the expectation from employees is that health insurance will continue to cost the same or to be less; they don’t want to pay more and that impacts the company’s ability to attract and retain talent, she said. It doesn’t take more than a handful of claims before her company is facing “a double-digit renewal,” Primeaux said. Nauman said that Katy ISD really began to see cost increase in the post-COVID era. He said that the district, which is self-insured, has seen pharmacy costs increase from about five percent to over 18 percent of the district’s total spend. That changes every six months, he said. One way that the district has tried to manage costs is through adding a “virtual medicine” program in order to manage chronic diseases and “drive good behavior and access to care” before employees end up in the ER or hospital.

Asked for some practical ways that an employer can fund a health program without shifting more costs onto the employees and about common mistakes that employers make when trying to reduce costs, Alexander said that it is important for the employer to educate employees about what medicine and medical care costs. “Medical care is not immune to inflation,” he said. He said that employers also need to educate employees on the value of the plans that they are receiving. Alexander said that there were also alternative methods for an employer to reduce health care costs, such as level funding, self-funding for larger businesses and reference-based pricing. Nauman said that regardless of the size of an

employer, healthcare needs to be considered on a long-term basis, with considerations for the impact in years two, three and beyond. Cost-sharing has to be balanced with retention, Nauman said, since there is also a cost to employee retention. Lastly, Nauman asked, “Are your employees happy?”

Beyond the traditional medical coverage, Bajwa asked what other benefits employers were paying attention to. Hodge said that he was always trying to get as creative as possible and that his company paid as much as they could out of pocket in order to cover costs for employees. His company got a level-funded plan last year which is more affordable, he said. Hodge also said that he encourages his employees to use online services when possible. Primeaux said the Mac Haik family of companies has a wide variety of employees with different situations and needs, from servers in their restaurant businesses to more highly-paid salespeople on the automotive side. Flexibility in the benefit plan is key in order to appeal to all of the company’s populations, she said. Knowing what they need and what they are able to pay for is very important as well, she said, so their company offers a broad spectrum of plans and coverages, with the right “coverage to cost” ratios. It is important to think outside the box, Primeaux said. Her company employs a large number of single individuals who do not have dependents – but do have pets – so the company offers pet insurance, which is very popular. Mental health benefits have become extremely important in the post-COVID years, she said, so their company implemented a mandatory Employee Assistance Program in order to get employees the care they needed. Nauman said that the district was seeing higher-deductible plans and that employees are accustomed to paying for coverage and “going where they want to go,” which will continue to an issue until there is “generational change.” The district now offers voluntary benefits to help cover large expenses, including hospital indemnity and cancer policies to protect employees’ financial well-being. “Those products are relatively cheap,” Nauman said, compared to high-deductible plans.

Alexander stressed the need for understanding the demographics of a company’s employee base and customizing plans to fit those needs, such as offering HRA plans for older employees. Nauman echoed that need, emphasizing the importance of having up to date and accurate data. He also recommended starting out with projecting the company’s anticipated losses each year, in order to fully understand the impact of any decisions made about a company’s health care plan.

Asked what employers should ask their insurance providers, Nauman said that he wanted to be able to benchmark against the competition to compare plan designs and costs. Alexander said that the best advice was “education, education, education.” Dr. John Zerwas, former state legislator who represented House District 22 and now Chancellor of the University of Texas System, was the event’s keynote speaker. Zerwas provided a “flyover view” of the University of Texas’ various programs to support healthcare education, from the founding of the University of Texas Medical Branch in Galveston in 1893 to the development of new programs at multiple campuses through the statewide system to educate the future healthcare workforce. UTMB at Galveston is doing research on infectious diseases and is also responsible for healthcare for the state’s incarcerated population, which provides unique learning opportunities for students, Zerwas said. He also discussed the UT Health Science Center and its partnership with MD Anderson in the Texas Medical Center. He mentioned the work of the Kinder Children's Cancer Center and its clinical trials as well.

Zerwas also reviewed various programs at Stephen F. Austin University, UT Tyler, Southwestern, UT Dallas, UT San Antonio, UT Austin and UT Permian Basin.