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.”
Source: Otto, Nick. 08/08/2018. Employee Benefits News. https://www.benefitnews.com/news/rising-health-costs-push-employers-get-creative
Rylan Klaseen & Associates
Rylan Klaseen & Associates
Serving Southern California: