Supernova Award Category

The Problem

What company hasn’t been hard hit by unrelenting cost increases for healthcare benefits?  Steel Dynamics experienced rising healthcare and related benefit costs that were increasing much faster than the rate of inflation. 
In addition, the company and its employees lacked information about the cost and quality of doctors, hospitals, labs and other providers. 


With more than 7,700 employees in 32 states, Steel Dynamics saw wide variations in healthcare costs by geography, making it difficult to design companywide benefit plans.

Tired of just putting up with cost increases and lack of transparency, Steel Dynamics wanted to do something about the problem.

The Solution

Trusting in the power of market forces, company executives wanted to arm employees with buying information so they could choose better providers and reduce out-of-pocket costs, keeping a lid on costs to the company in the process.

Steel Dynamics turned to Castlight Health, a cloud-based provider of healthcare management services, to arm employees with qualitative and quantitative data about healthcare choices.

Steel Dynamics implemented Castlight Enterprise Health Benefits Platform to give employees insight into the cost and quality of healthcare providers and services. 
Steel Dynamics began by rolling out Castlight Essentials, which gives employees personalized information about available healthcare providers.

Steel Dynamics added Castlight Rewards to incentivize employees to use local low-cost providers meeting quality-of-care standards. 


In July 2015 the company rolled out Castlight Protect to establish cost and quality thresholds for common, high-cost tests and procedures. 


The results

With the help of Castlight, Steel Dynamics was able use a market-driven approach to contain healthcare costs. Castlight shed light on the cost and quality of healthcare and incentivized Steel Dynamics' employees to become engaged healthcare consumers.

In May 2014, Steel Dynamics implemented the Castlight Essentials application. At the core of Castlight Essentials is Castlight Medical, which gives employees personalized information about healthcare providers, provider quality, and estimated fees for visits.

“Employees can sort by location, quality and cost, and they see what the company pays as well as their own out-of-pocket costs,” said Record, stressing the importance of partnering with employees. “If you’re not exposed to cost information, it’s not possible to become a good healthcare consumer.”

In another drive to promote consumerism, Steel Dynamics added the Castlight Rewards program in January 2015. This service lets employees earn points for choosing designated, low-cost providers for lab work, diagnostic imaging and procedures such as colonoscopies. Steel Dynamics gives incentives of $10-$50 when they select a designated provider. *Providers must meet minimum quality thresholds to be included in the program.

With Castlight Protect, Steel Dynamics is attempting to address cost variability for common, high-cost services and procedures. Protect sets reference prices that the employer will pay for selected services and procedures.

Metrics

Steel Dynamics’ success in promoting healthcare consumerism can be measured in two ways: engagement and cost savings. On the engagement front, the company has seen steady increases in enrollment and usage of the Castlight platform. At the initial launch of Castlight Essentials, approximately 24% of company employees enrolled, but that figure steadily rose so that 87% of employees were enrolled by the fall of 2015.

Day-to-day usage of Castlight has also been strong. Among all users who are enrolled
to use the platform, roughly 40% have logged onto the platform on a quarterly basis in recent months. In other words, more than 1/3 of company employees are using the platform on a regular basis.

It will take time for Steel Dynamics to gauge the impact of Castlight Protect, according to Record, but one early indication of success was a 150% increase in searches for MRI services shortly after the Protect application was added to the Steel Dynamics’ deployment.

Assessing impacts on costs, Steel Dynamics estimates it cut healthcare expenditures by approximately $500,000 in 2014 using the Castlight platform, according to Record. Having deployed Castlight Rewards and Castlight Protect this year, the company projects yearly savings of at least $1.5 million – 3%- 4% of total medical claims spending - in 2015 and beyond. In an environment in which cost increases are the norm, that’s a testament to the power of arming employees with personalized data so they can make better decisions. 

The Technology

• CastlightEssentials
• CastlightRewards
• CastlightProtect 

Disruptive Factor

Steel Dynamics’ recognition that market forces could effectively contain healthcare costs is notable. Firms can attempt to cut costs by implementing top-down decisions around benefit design, but they can’t keep and attract employees if the benefits aren’t competitive.

Steel Dynamics recognized that it’s the many small decisions – the individual healthcare choices made by employees each day – that are the key to tackling the healthcare cost challenge. By arming employees with data and tapping into their consumerist instincts, the company and its employees have partnered to cut healthcare costs. 

Shining Moment

Early on, Steel Dynamics knew that promoting a “we’re
in this together” philosophy would be the key to the success of this program. To communicate the changes regarding reference pricing the company tapped Castlight campaign content throughout the rollouts of the Castlight products.

Out of 189 claims submitted in the first month after the Castlight Protect rollout, only one claim exceeded 100% of reference pricing.