A recent survey by the Kaiser Family Foundation (KFF) found that Americans know the problem with U.S. health care is cost rather than increased government involvement (translation: Medicare for All, Universal Health Care, Single Payer Health Care).
 
The government needs to listen (and so do any candidates for office), then empower and enforce transparency and accountability in order to achieve affordability and quality.
 
Not only do Americans know cost is the issue – the U.S. government’s record on practicing medicine without a license is nearing disaster on all fronts, which Jon Stewart’s recent plea for our 9-11 first responders pushed to the forefront for a media moment:

• our promise to 9-11 first responders to cover their health care from the toxic fumes they inhaled during Ground Zero rescues is being broken with 20,000 claims processed so far and 17,000 more claims pending – while the designated funds have run out (thank God a permanent fund has since been set up);
  
• our promise to our 18.2 million veterans to cover their health care for protecting our freedom is being broken;
  
• our promise to Native Americans (serving only 2.2 million out of 5 million) to cover their health care in exchange for, um, taking their land, is being broken;
  
• our promise to our elders (55 million currently enrolled) to cover their health care through Medicare will be insolvent by 2026, with the Government Accountability Office reporting in 2015 that $60 billion – 10% of Medicare’s annual budget – was lost to waste, abuse, fraud and improper payments in that year alone;
  
• and our promise to our poor (72 million people currently enrolled in Medicaid) to cover their health care until they can on their own is consuming 20% of states’ annual budgets, with government’s approved payment amounts to providers so low that many Medicaid patients cannot find doctors or hospitals that will take them – so they end up in emergency rooms or with no care at all.
  

All of this is not lost on we Americans. We have to ask whose lame idea it was to have politicians and their academic policy advisors all illegally practicing medicine without a license in the first place!? In my book, Bill Please: Consumers Driving Health Care, I point out in detail how we all contributed to this fiasco – which also means that together we can all fix it. Could we create health care that operates like other industries and get the government out of all of it? I believe we could!
 
According to the KFF survey, Americans are laser focused on the rubber meeting the road: lowering prescription drug costs, continuing protections for people with pre-existing conditions, and protecting people from surprise medical bills.
 
I’m a broken record on this – but besides keeping the government and academics (and insurers) from illegally practicing medicine without a license, take health insurance out of the equation for just one year, and health care would immediately get fixed. Why? Providers and pharmaceuticals would immediately have to look consumers directly in the eye with 100% transparency and accountability when presenting their prices. That’s, indeed, when the rubber would meet the road. No third-party payer to hide behind, no discount shell game. Game over!
 
In reality, many Americans depend on their health insurance – so how can we achieve this without sending health insurance on a one-year vacation? Demand your government representatives (and candidates) enforce the current consumer advocacy laws already in place, empower virtual care in under-served areas, and require price transparency and quality accountability – then let consumers shop.
 
Sources:
Ashley Kirzinger, Bryan Wu and Mollyann Brodie, 4/24/19, “KFF Health Tracking Poll – April 2019: Surprise Medical Bills and Public’s View of the Supreme Court and Continuing Protections for People with Pre-Existing Conditions,” Kaiser Family Foundation, retrieved 6/18/19 from: https://www.kff.org/health-costs/poll-finding/kff-health-tracking-poll-april-2019/
 
Laura Hollis, 6/17/19, “Stewart Speech Shed Light on Larger Health Care Funding Problem,” The Boston Herald, retrieved 6/18/19 from: https://www.bostonherald.com/2019/06/14/stewart-speech-shed-light-on-larger-health-care-funding-problem/

An opinion piece in The Hill by Hadley Heath Manning, Director of health policy at the Independent Women’s Forum, states the obvious: “There can be no price competition without price transparency.” So why haven’t we yet been able to unite and make this happen to fix our U.S. health care system? 
Manning points out that not only do we lack price transparency, we actually lack a health care marketplace. Economics 101 would tell you that you can’t have one without the other.
Of those Americans who took the time -- and it does take time and is not an easy task -- to compare health care prices, 82% said they would do so again to save money. Fifty-six percent of Americans report they have tried to find health care prices, and 67% of those folks have high-deductible plans.
While some health care is urgent and unexpected - which is why it is as important to have health insurance as it is auto and home insurance -  Marty Makaray, M.D., in his forthcoming book The Price We Pay, maintains that 60% of health care is “shoppable.”
But we can’t shop without price transparency. As I continually state, like a broken record here, if health insurance took a year-long vacation, we’d immediately achieve price transparency! Providers would instantly be accountable to consumers for their prices. No more hiding behind insurance. No more shell games.

With the current trend to make “Medicare-for-all” sexy, or something like it, we must differentiate between price transparency and price setting. Medicare and Medicaid are price setting, paying providers a fraction, which then leads to shortages of care. As I stated in my book, Bill Please: Consumers Driving Health Care, claiming “coverage” is different than achieving “care” - so many of the people now covered by Obamacare’s Medicaid expansion cannot access care because many doctors refuse to accept a fraction of their price, and will only accept privately insured or cash patients.
Price setting, which basically Medicare, Medicaid as well as insurance companies - through HMOs and PPOs - all do, is the opposite of creating a healthy, competitive marketplace that provides quality health care to all. Price transparency, on the other hand, enables healthy competition with the affordable, transparent, accountable, quality cream rising to the top. Americans are smart enough to shop for health care just like we shop for everything else. Show us the money, already!
 
Source: Heath Manning, Hadley. (4/17/19) “Price Transparency is Key to Functional Health Care Market,” The Hill, retrieved 4/25/19 at: https://thehill.com/opinion/healthcare/439308-price-transparency-is-key-to-a-functional-health-care-market

U.S. Health Care’s resistance to change may be moot. Employers who provide the majority of health benefits to Americans are taking matters into their own hands – and seeing astounding results.
Employers know something has to be done – so they are doing it. Employer spending on health care services increased by 44% per enrollee from 2007 to 2016, reaching an annual amount of nearly $700 billion in 2017 – roughly what the Pentagon spends on defense.
Innovative companies including Walmart, Lowe’s, McKesson, GE and Boeing are disrupting how they pay for care by taking insurers out of the equation and contracting directly with leading health systems. Remember what I keep saying: If health insurers took a vacation, U.S. Health Care would immediately get fixed because then providers would have to look those paying for their services right in the eye when they say how much!
That is exactly what is happening! Providers can no longer hide their prices behind insurers! These companies working closely with providers such as Geisinger, the Mayo Clinic, John Hopkins, and Virginia Mason, and with the help of specialized consultants, are crafting direct bundled payment arrangements that cover the cost of an employee’s care for certain medical events from start to finish – all the procedures, devices, tests, drugs, and services needed. In most instances, they are also picking up the tab for any necessary travel, lodging, and meals for the employee and a caregiver in order to save money (and practicing competitive shopping at the same time serving notice to local providers to get their prices in line), thereby democratizing destination care programs that historically were reserved as an executive perk.
Walmart has many successes to show for their six-year-old Centers of Excellence (COE) program. Walmart’s COE program has saved the company tens of millions of dollars and produced better outcomes than conventional, piecemeal care has. A 2012 survey, found that costs vary more than tenfold across the U.S., for example, hip replacements ranged from $11,100 to almost $126,000 nationwide. So a company like Walmart, the largest private employer in the world, providing coverage to more than 1/1 million U.S. associates and their families, had a huge challenge and had to figure out how to rein in and standardize costs. Their COE program has proven up to that challenge.

Another challenge Walmart faced was the fact that trying to get employees to shoulder more of the expense just turned into employees not getting appropriate care, meaning that employees wouldn’t seek care until it was an emergency, which defeats the purpose of having healthy, productive employees -- and emergency care is much, much more expensive than preventive and early care. Nationally, workers’ out-of-pocket expenses (beyond premiums) have increased in parallel with employers’ costs and, according to the Health Care Cost Institute, topped $5,600 per person, on average, in 2017. Walmart, and these other innovative companies, realized their employees just don’t have $5,600 extra lying around, which is why they weren’t seeking needed care. Walmart’s COE program solved this problem.
There was also the issue of quality. Given the wide variation in outcomes for common procedures among different providers, Walmart, like most other employers, had limited control over the quality of care their employees were receiving. Walmart’s COE program also solved this problem, choosing the providers they were willing to work directly with carefully based on quality of care. Walmart has developed not just bundled coverage but also Accountable Care Organization (ACO) arrangements with selected providers, with the driving principle being to secure the highest-quality care at the best price.
Given the fact that U.S. employers and their employees hold the purse strings on the largest collective spend in U.S. health care, Walmart and these other companies are demonstrating the power they have to finally achieve the transparent, accountable, affordable care we all need and deserve. Kudos! Keep it up! One more huge step toward Consumers Driving Health Care!
Check out this five-part series to see, step-by-step, how you can do the same!
 
Source: Lisa Woods, Jonathan R Slotkin, MD and M. Ruth Coleman, “How Employers are Fixing Health Care,” Harvard Business Review retrieved 4-3-19 at: https://hbr.org/cover-story/2019/03/how-employers-are-fixing-health-care

I’ve said many times that U.S. health care would immediately get fixed if health insurance took a year vacation. Why? Because hospitals, pharmaceuticals and all health care providers would have to deal directly with consumers to get paid! Their pricing would then have to be 100% transparent, they’d have to look us in the eye and ask us to pay – how much?!
In fits and starts we’re starting to see rays of light in cracks of transparency here and there, like hospitals now being required to post their pricing online. As anticipated, analysts have begun their work with this and other data and in a recent study have found that hospital prices are the main driver of U.S. healthcare spending inflation.
This particular study, which looked at the Health Care Cost Institute’s claims data for people with employer-sponsored insurance from Aetna, Humana and Unitedhealthcare Group, found that for inpatient care hospital prices grew 42% from 2007 to 2014 while physician prices rose 18%. Similarly, for outpatient care, hospital prices increased 25% while physician prices grew 6%.
Can you imagine increasing your prices 42%, or 25% or even 18%? Can you imagine explaining this to your customers? Well, healthcare hasn’t had to because these price increases have been hiding behind health insurance! Health insurance companies and, to some degree, employers have been well aware of these unsustainable price increases – but the general public? No.
Insurance now costs a family of four about $19,000 a year. The reason costs vary so much across the country, as can now be seen in hospitals’ online posted prices – even if they are, as hospitals argue, the equivalent of hotel rack rates and “not the final price” – is because of the price of hospital care, which is the largest single component of healthcare costs in the U.S., said Zack Cooper, study co-author and an associate professor of health policy at Yale University.

            

“What is most worrying to me is that there has been fairly profound consolidation among hospitals and when they gain market power they have the ability to raise prices,” he said. “They have the ability to gain more favorable contractual terms, which allows them to raise prices and resist the new, more sensible payment reforms.”
U.S. healthcare spending grew 3.9% to $3.5 trillion in 2017, consuming nearly 18% of the country’s gross domestic product, according to CMS data.
About 33% of total healthcare spending is directed toward hospital care, translating to about 6% of total GDP, according to CMS data.
“If you look over the last 20 to 30 years, total employee compensation has gone up, but the amount each worker gets paid has been incredibly flat,” Cooper said. “The gains they would’ve gotten in income have gone toward paying their insurance and the largest chunk of that goes toward paying their local hospital.” Of course, as employers, this is something you already know, and know well.
We’re at a dangerous precipice with policymakers considering regulating hospital and physician prices instead of turning these cracks of transparency into doors pushed wide open to enable consumers to see healthcare pricing in the full light of day – which is what we need.  
While we’re grateful to academics like Cooper for their research, I’m befuddled why they then tend to recommend yet more regulation and don’t seem to see how consumer-driven health care with full transparency and accountability is what will drive us to affordability.
Once again, please let your representatives in D.C. know we need consumer-driven health care – if health insurance cannot go on a year vacation, at least let’s shine some flood lights on unsustainable healthcare pricing, and then as consumers – say “no!”
 
Source: Kacik, Alex. (2/4/19) “Hospital Price Growth Driving Health Care Spending,” Modern Healthcare, Retrieved on 2/4/19 from: https://www.modernhealthcare.com/article/20190204/NEWS/190209984/hospital-price-growth-driving-healthcare-spending

A new law requires all U.S. hospitals to post their complete price list online in a machine-readable format, such as a spreadsheet, on their own websites.
HURRAY!!!
It is a huge first step towards achieving the transparency consumers require and deserve in fixing our US healthcare system!
The rule, created by the Centers for Medicare and Medicaid Services, is similar to a 2006 California law mandating hospitals share master price lists on a state-run website.
I’m already beginning to see analysis and comparisons with articles starting to appear headlining the vast price differences that is now there in black and white for us all to see.
Of course, hospitals then attempt to defend their pricing, comparing their posted prices to hotel rack rates (which is hurting their reputations even more since we as patients are people – not hotels). But the conclusion, then, is that we can negotiate. The opaque door has finally been pried open and, along with this first step in transparency come a modicum of accountability.

One hospital in the California Bay Area stated that “The amount patients actually pay for hospital services has more to do with the type of insurance coverage they have, than amounts on the chargemaster (master price list).”
Ah, health insurance. I was waiting for a hospital to try to redirect the spotlight back over to insurance, certainly another piece of the shell game, and what they’ve been successfully hiding behind for decades.
But – the gig is up. The door is open, hospitals must now be transparent with their prices, be accountable for their prices, and consumers can now directly negotiate.
We still have a long way to go to achieving the health care system we all want and deserve, but this was a very important first step.

Source: Chris Cumura & James Jackson, January 1, 2019. NBC Bay Area. “New Law Requires All U.S. Hospitals Post Complete Price Lists Online.” Retrieved on 1/30/19 at:
https://www.nbcbayarea.com/news/local/New-Law-Requires-All-US-Hospitals-Post-Complete-Price-Lists-Online-503774731.html

           The healthcare provider seat is getting hotter and hotter as technology companies stateside and close offshore competitive models encroach on the status quo. Healthcare providers do business as usual at their own peril.
        A recent survey by the Center for Connected Medicine of healthcare IT executives, for instance, showed that 7 in 10 are “somewhat concerned” about technology companies like Google, Amazon and Apple entering the healthcare space. Just 17% said they were not concerned while 10% said they were very concerned, reflecting JPMorgan CEO Jamie Dimon’s observation that the bank’s healthcare venture with Amazon and Berkshire Hathaway “pissed off” some healthcare executives.
           These concerns revolve mostly around the ability of those companies to offer a better consumer experience. Other healthcare executives admitted that technology companies would force price transparency, which they claim would lead to “consumer confusion.”
      Wow. A better consumer experience and price transparency - sounds just like what we have a right to expect from our healthcare system. Any politicians, academics or healthcare providers claiming consumers are inept is old and tired, as Regina Herzlinger, the mother of consumer-driven healthcare, deftly pointed out in her book Who Killed Health Care? America’s $2 Trillion Medical Problem – and the Consumer-Driven Cure, and I expounded upon in my book Bill Please: Consumers Driving Health Care.  
         This flimsy, frankly offensive excuse for getting in the way and not allowing consumers and free market principles to fix our healthcare system just won’t fly anymore. I fully expect these technology companies’ entry into healthcare to further prove this point.
          And just off America’s shore in the Cayman Islands is another reminder that the healthcare status quo is headed the way of Yellow Cab, Kodak, & Borders in the face of Uber, digital photography, and Amazon.
           

          In 2014 Narayana Health, in a joint venture with America’s largest not-for-profit health network Ascension, opened Health City Caymen Islands (HCCI) beating U.S. healthcare prices by 60 to 75%, with glowing patient reports to boot, and projections of significant profits once patient volume picks up. Three years in, HCCI has seen about 30,000 outpatients and over 3,500 inpatients, performing almost 2,000 procedures with a zero mortality rate. HCCI is accredited by Joint Commission International, which further endorses their quality outcomes.
            The HCCI model, with zero copays or deductibles, free travel for the patient and a chaperone for 1-2 weeks, is potentially very disruptive to U.S. healthcare – and would actually save insurers a bundle. A team of U.S. doctors that visited HCCI came away stating, “The Caymen Health City might be one of the disruptors that finally pushes the overly expensive U.S. system to innovate.”
            As the Healthcare Providers’ seat heats up – hopefully these new entrants will motivate them to become part of the solution – or get out of the way.
 
Sources: Govindarajan, V. & Ramamurti, R. June 22, 2018. “Is this the Hospital That Will Finally Push the Expensive U.S. Health Care System to Innovate?" Harvard Business Review Retrieved 11/27/18 from: https://hbr.org/2018/06/is-this-the-hospital-that-will-finally-push-the-expensive-u-s-health-care-system-to-innovate
 
Sweeney, E. 11/21/18 “Survey: Most health informatics executives see ‘big tech’ as a threat," FierceHealthcare Retrieved 11/27/18 from: https://www.fiercehealthcare.com/tech/survey-most-health-informatics-executives-see-big-tech-as-a-threat

             We’ve covered the fact that large companies are beginning to contract directly with health care providers, totally bypassing health insurers. I’ve said it before -- send health insurance on a one-year vacation nationwide and our health care problem would immediately be fixed because providers would have to work directly with patients as payers. The gig would be up. Opaque health care would immediately have to become transparent, accountable and affordable – or providers would go out of business. They are, after all, businesses, too, which the mess we’ve all contributed to that we call our current U.S. health care system makes us forget. These direct contracts large employers are negotiating are effectively achieving the same thing. Health insurance was never meant to be a way for providers and pharmaceuticals to hide. It was never meant to become arbitrators of how providers practice medicine either. It was initially meant to simply be a more convenient way to pay for health care.
           I don’t see the health insurance on vacation scenario happening, but what about smaller companies? Could they also make an impact by forming alliances to directly contract with providers as well?
               Well, with shifting out-of-control health care costs to employees reaching its tipping point, confronting the true underlying causes of health care expenditures -- high prices and health care inefficiencies – may be employers of all sizes only remaining option.
           A recent article in the Harvard Business Review states it this way: “To address these challenges, they will have to band together in purchasing coalitions that give them the local market power to force health systems to reform.” Exactly.
        High Deductible Health Plans were a bust – employers found out the hard way that employees just don’t have $6,000 to $12,000 lying around, so they’ve been choosing to just not seek health care, which defeats the purpose and actually ends up increasing employers’ costs covering sicker employees, since they don’t go until their health issues become emergencies. In the article, they point out that the percent of U.S. workers who are underinsured, facing out-of-pocket health care expenses greater than 10% of their income excluding premiums, increased from 10% in 2003 to 24% in 2016. Between 2011 and 2017, employees’ premiums and deductibles grew faster than their median income. Employers need to negotiate prices, transparency, accountability, and remake our health care system while they’re at it.

        One challenge is that all health care is local so success in negotiating affordability and reforming health care delivery depend on an employer’s ability to force price concessions and behavior change from local physicians and health care institutions. Attempting that one employer at a time makes it difficult to muster enough purchasing power leverage to succeed.
            When you think about it, this is even true for large national companies whose aggregate workforce is spread across tens or hundreds of localities. In addition to the fact that these employers may have little else in common, actually forming purchasing coalitions are further thwarted by antitrust laws that limit employers’ ability to collaborate. Add to this the fact that health care consolidations – 90% of metropolitan areas have highly concentrated hospital markets and 65% have highly concentrated specialist physician markets – also work to employers’ disadvantage.
            A second challenge is the steep learning curve in deciphering health care purchasing. While some of the behemoth corporations have the funds and motivation to hire sophisticated health benefits specialists, 7 to 8 million mid-size and small employers are just trying to keep their noses above water managing their core business in a roller coaster economy.
            A third challenge is convincing employees to change their providers. Getting between employees and their doctors in a tight labor market is not smart.
            See what I mean by we all the made this mess – we all need to fix it?
            While the Harvard Business Review article resorts to bringing back in health insurers and government, I believe they are bypassing the most powerful piece of this health care fix puzzle – the employees who are also the consumers and the patients in all of this. In a perfect world, employees would demand transparency, accountability and affordability from their providers, even if their employer plan is paying for it.
           Now that is a different target for employers, but why not? Maybe employers need to team up with their employees, incentivizing and engaging their employees in being part of the health care cost and quality solution. Perhaps employers need to be more transparent with their employees about the effect health care costs are having on the company’s bottom line and sustainability. How about transparency on how partnering to force health care costs down and quality up could translate to higher employee compensation? That is plausible, right? Could employers commit health care plan savings to employee compensation? Hmmm….
 
Source: David Blumenthal, Lovisa Gustafsson and Shawn Bishop. 11/2/2018. “To Control Health Care Costs, U.S. Employers Should Form Purchasing Alliances.” Harvard Business Review. Retrieved 11/8/18 from: https://hbr.org/2018/11/to-control-health-care-costs-u-s-employers-should-form-purchasing-alliances?utm_medium=social&utm_source=twitter&utm_campaign=hbr

Well, one pharmaceutical CEO gets it! I was emboldened to read David A. Ricks', CEO of Eli Lilly and Co., editorial. He points out that regardless of Apple, Amazon and other tech companies’ entry into healthcare, there remains one huge barrier: the outdated U.S. health care system.
 
You repeatedly hear me saying how we all made this mess – and we can all fix it.
 
Ricks adds to that by pointing out that the foundation of America’s health care system was designed 50 years ago to treat mostly acute episodes of illness inside brick-and-mortar facilities with lots of people, lots and lots of paper, and very little technology. 
 
This is no longer our objective when, today, Ricks states our primary challenge is to help people live independently with mostly chronic illnesses over a long period. I would add to that our actual goal should be prevention since the majority of those chronic illnesses could be completely alleviated with a proactive wellness model instead of even continuing a “sick” model.  (And how about pharmaceutical cures rather than lifetime drug regimens Mr. Ricks?)
 
And yet, as Ricks, points out, “We continue to pursue this task with the same high-cost, high-touch tools that were built in a different era for a different job.”
 
The result of this mismatch is unsustainable, skyrocketing health care spending. Thirty years from now, Alzheimer’s alone will require more Medicare and Medicaid spending than the entire 2019 U.S. military budget. We will hit a wall.
 
Ricks says that digital technology, when combined with pharmaceutical technology, will be crucial in reducing the massive cost of health care, yet it isn’t enough – we must have an efficient network that can unleash the power of today’s technology.
 
According to Ricks, we must do three things: digitize everything, empower consumers, and pay for value.

Digitize Everything
 
Digital technology already has an information superhighway to act as the foundation of that efficient network. An online retailer can reach people literally worldwide with just a website – compared to the few hundred thousand dollars for a brick-and-mortar store that reaches only one community.
 
We must develop common standards and patient privacy protections – and I would add greatly improve cyber security and enforcement – that allow data to flow through our health care system freely and safely. Medicare can also help by reimbursing at higher rates for products and services that combine digital, medical, and pharmaceutical technologies.

Empower Consumers
 
Ricks agrees with what I said in my book Bill Please: Consumers Driving Health Care, and what Regina Herzlinger, the mother of consumer-driven health care, stated in her book, Who Killed Health Care? America’s $2 Trillion Medical Problem – and the Consumer-Driven Cure, that in nearly every industry, consumers are the catalysts for reducing costs and improving quality. We also all agree that this hasn’t happened yet in health care – because, as I’m always stating, it is opaque and nearly impossible to get meaningful cost and quality information before receiving treatment.
 
Ricks uses the same example as Herzlinger and I – “When you buy a car, you don’t care what the manufacturer paid for each of the 30,000 parts in it. You care what the price of the whole is, and how well it functions, before you drive it off the lot. We need that kind of transparency in health care, to enable consumers to make more informed decisions and to encourage health care companies to meet consumers’ expectations.”
 
Pay for Value
 
Ricks and I diverge a bit here. Just as I believe we must go further than continuing a “sick” model, I believe we must go further than the value-based care model Ricks supports. We must go all the way to a well-being model. I also believe that Concierge Medicine is the payment model that makes the most sense in implementing a well-being model, with health insurers only needing to provide catastrophic insurance. Providers' greatest revenue incentive, then, is to keep their patients healthy from the get-go. This also means, of course, that medical school curriculum needs a complete overhaul to equip providers to accomplish this. Being a doctor would need to be much more than slice and dice, even though we still need them to know these skills as well – assisted by robots, of course. :o)
 
What if every employer contracted directly with Concierge Medicine Programs then offering their employees catastrophic health insurance as well as supplemental gap insurance?
 
Summary
 
I wholeheartedly agree with Ricks that the greatest barrier to the system we want – and deserve – is the system we have, and that, “To realize the transformative potential of the digital revolution in our health care system, we need to change [reinvent] it.”

Source: David A. Ricks, August 27, 2018 “Eli Lilly CEO: Why Consumers Are Key to Bringing Down Health Care Costs” Fortune retrieved 9-28-18 from: http://fortune.com/2018/08/27/eli-lilly-health-care-pharmaceuticals/

As healthcare costs continue to skyrocket and the labor market tightens, upping the ante for recruiting and retaining talent, employers are taking charge in offering new and better ways of delivering health and wellness solutions to their employees – and these efforts could just end up snowballing us into a consumer-driven, affordable, transparent and accountable health care system!
 
According to the National Business Group on Health’s (NBGH) annual recently released survey, more than a quarter of large employers intend to circumvent the current healthcare delivery system to improve access, convenience and overall experience for their employees by developing virtual and digital care point solutions alongside concierge services and direct contracting.
 
NBGH’s figures project per employee health benefit costs will increase 5% to $14,800 in 2019, compared to this year’s estimated $14,099 total. Employers tend to cover about 70% of the total employer-paid premium leaving employees to pay 30%, or nearly $4,500 next year.
 
Research is showing that the higher the cost employees have to pay in premiums and deductibles, the more they are opting out of participating in health benefits and, worse, the more they are opting out of seeking health care all together.
 
Employers realize this only places their employees at greater risk and exacerbates their existing health issues, which, in the long run, greatly increases per employee cost, greatly reduces employee productivity, and, most important for a business’ long-term viability and sustainability, decreases their employees’ overall wellbeing.

NBGH’s president and CEO, Brian Marcotte, states that employers know this trend is unaffordable and unsustainable for employers or employees over the long-term. “No longer able to rely on traditional cost sharing techniques to manage costs, a growing number of employers are taking an activist role in shaking up how care is delivered and paid for,” Marcotte said.
 
Employers, listening to their employees’ inability to manage high deductibles and the alarming trend of employees not seeking health care at all in response to high deductible health plans, are beginning to turn away from HDHPs, dropping 9 percentage points from last year.
 
This was surprising to health insurers, who thought employees would bring healthcare prices down if they had to shop and pay for care themselves, but expecting employees to come up with as much as an extra $6,000 or double that for families proved unrealistic. Employees just stopped seeking care.
 

I still maintain that if health insurers nationwide took a year vacation, and providers were forced to sell their services directly to consumers that health care prices would immediately become affordable – but as we’ve found, HDHPs were just not enough to achieve that. HDHPs blended with inexpensive gap insurance could still be viable for employers and employees, but we still as a society need to dramatically address the unsustainable cost of healthcare. It appears employers are getting that message and taking matters into their own hands. Some large employers who can are starting to circumvent health insurance all together.
 
NBGH found that direct contracting with health systems and providers is expanding, from 3% in 2018 to 11% in 2019. General Motors recently entered an agreement with Detroit-based hospital system Henry Ford Health System to provide a new direct-to-employer healthcare option to 24,000 of its salaried employees and their dependents in Southeast Michigan. You can bet they negotiated and got affordable, transparent prices as well as quality accountability!
 
It is not that health insurance is bad. The fact is we all – providers, pharmaceuticals, employers and employees – misused it and created our current opaque health care system.
 
Large employers creating direct contracts with providers could indeed lead us out of the mess we all made.
 
In addition to direct contracting, this year, NGBH found 65% of employers will provide virtual mental/behaviorial health services, 58% will offer virtual health and lifestyle coaching, and 42% will have virtual diabetes care management services in place.
 
Telemedicine, employee assistance programs and nutrition counseling have also increased in popularity.
 
Marcotte added, “Interestingly, seven in 10 employers believe new market entrants from outside the health care system status quo will have a significant impact,” citing the Amazon, Berkshire Hathaway and JPMorgan Chase collaboration to shake up health care delivery to their employees. “If you begin to leverage Amazon’s footprint within the home, their relationship with the consumer and their customer obsession, if you can incorporate healthcare into [employee’s] routine and leverage [Amazon’s] platform then you have an opportunity to reach [employees] in a way nobody has been able to.”
 
True that!
 
Source: Otto, Nick. 08/08/2018. Employee Benefits News. https://www.benefitnews.com/news/rising-health-costs-push-employers-get-creative