I went to see my doctor last week, and after arriving 15 minutes early as instructed, completing forms I have penned a dozen times before, then waiting 30 minutes past my allotted appointment time, we had a chat. He looked over my numbers and concluded, “I want you to lose 10 pounds.”
That was it. Meeting over. Pay at the door. Come back in six months.
There was no counseling on how to lose the weight. No connection to a nutritionist or someone who might help manage an exercise program. Not even a flyer of dos and don’t’s to guide me in my weight loss.
That’s when I realized that my doc, like most healthcare practitioners in America, can help me when I am sick. But he doesn’t really do anything to keep me from getting ill. Oh, he feigns some minor interest in preventive medicine, but the fact is if he prevented me from getting sick in the first place, he’d be cutting into his own business. What incentive does he have to help me lose that extra 10 pounds?
Toward a healthier future
Isn’t it time we change healthcare delivery in America? Shouldn’t we be focusing our healthcare delivery services to prevent illness instead of just treating the sick? Most people would say YES to these queries, but are uncertain what to do about them. I’m happy to report a movement afoot that focuses on this long-standing, and fundamental problem. Smith Communication Partners is sponsoring the Aspirational Healthcare Conference, to be held July 14 and 15. The virtual conference brings thought leaders, executives and healthcare professionals together to discuss changes to healthcare delivery in the U.S. to lower costs and improve outcomes. The conference focuses on preventive care concepts versus our current structure of reactive healthcare services.
The Aspirational Healthcare Conference is the brainchild of Darrell Moon, CEO of the national wellness firm Orriant Health. Before launching his wellness company, Darrell spent part of his career running a healthcare system that included several hospitals. During that experience he came to the realization that the healthcare system in America needs a major overhaul. He points out that healthcare services are built for the providers to provide but have almost no focus on the customer. He and other similar leaders want to switch healthcare to be preventive focused and built based on the needs and wants of the customers in the community.
Darrell has assembled national healthcare leaders, company leaders, heads of major consulting and brokerage firms, and professionals dedicated to the idea of preventive care to present at the conference this year. One of the presenters is April Kyle, the CEO of the Nuka System of Care in Alaska, generally regarded as the best example of healthcare delivery in the world by providing better results at a lower cost than any other system. The Nuka group has twice received the President’s Malcolm Baldrige Award for Quality.
I hope you can attend and join the drive to change healthcare in our country to focus on ways to prevent illness instead of just treating the disease.
You can register for the event with the code !SMITHCP$. I’ll see you there – 10 pounds lighter, no doubt.
Recently I was explaining what Smith does to some friends. Pretty quickly the conversation turned toward health insurance and healthcare costs—mainly HSAs and high-deductible plans. Cutting to the chase, folks aren’t happy.
Our HR clients are tasked with explaining the necessities, values and details of what often is called healthcare consumerism. In theory, consumer-driven healthcare has three key components:
More healthcare choice, information and responsibility is placed in the hands of employees
Employees come out-of-pocket for more of their health spending
Healthcare consumer choices create market forces that control rising healthcare costs
It seems reasonable and I hope it’s working.
However, theory and reality often diverge. Listening to my friends share their recent experiences helped shed light on real difficulties employees have as healthcare consumers. It seems that the market they are accessing is largely detached from reality in terms of pricing, accountability and transparency.
These three stories are illustrative because my friends all tried to be proactive, informed and careful healthcare consumers.
Patient-friend A needed corrective jaw surgery that was outside the parameters of his health insurance. His treatment plan with his dentist, orthodontist and oral surgeon came to around $8,000. This included $900 for the use of an outpatient surgery center, which was to be prepaid—a real bargain.
When he arrived at the hospital, to sign forms and pay the $900, he was informed that the bill was now $19,000. That’s right—$18,100 more than what he was expecting. He was shocked. He called his doctor while in the waiting room to “freak out” and cancel the surgery. Upon closer examination, the surgeon’s office manager realized that she coded the order incorrectly, neglecting to note that the patient would self-pay. She spoke with the hospital admissions person, sent over the corrected order, and guess what? The bill went down to $900.
Doesn’t that give you pause? Why is an insurer/employer billed 20 times more than the hospital will take in cash for the same service?
Patient-friend B needed her gall bladder removed. She chose the hospital because it was in-network and her surgeon’s practice was also in-network. Since her deductible had been met for the year (the reason why she elected to do the surgery when and where she did), there were no out-of-pocket costs for the operation.
However, after the surgery was performed, she received a separate $4,000 bill from a contract surgical nurse who assisted during the surgery. This nurse was not in-network, so the insurance wouldn’t pay the bill. It took months of wrangling, threatening and fighting to get the hospital and insurance company to intervene.
What’s an unconscious consumer to do?
Patient-friend C (OK, this is me) tried to determine the cost of a doctor’s visit to decide whether to do it in December or January as part of my healthcare budgeting. My family has a $7,000 deductible and we manage most of our healthcare costs through our HSA and FSA.
The visit wasn’t critical; I could have waited until my annual physical and it would have been covered. Still, I wanted to close out my FSA. Use it or lose it. My doctor’s office refused (claimed to be unable) to tell me how much I would pay for a visit beforehand. The only option I had was to have the visit and find out how much it cost at the conclusion. The cost ended up being more than I had in the account, thank you.
I wouldn’t agree to this scheme with any other purchase.
Employees are depending on us.
A recent study showed two things about employees and consumer-driven health plans. First, employees don’t fully understand these plans. Second, they count on employers to educate them on the details. If the stories I’ve shared are part of a universal experience, we all have a lot of work to do to help empower employees to receive good care in a difficult marketplace.
Early on in The Wizard of Oz, Dorothy runs across Professor Marvel, “acclaimed by the crown heads of Europe” as someone who can “read your past, present and future in his crystal.”
Professor Marvel greets Dorothy, saying: “And who might you be? No, no, now don’t tell me.
Let’s see. You’re traveling in disguise. No, that’s not right. You’re—you’re going on a visit. No, I’m wrong. You’re, you’re—running away.”
To which Dorothy responds, in all sincerity, “How did you guess?”
When we consider past predictions about the future of private benefit exchanges (PBEs), we find that experts have struggled as much as Professor Marvel to discern the future. And, in 2018 when we consider the viability of PBEs—especially in light of Washington’s mixed support—well, our “crystal’s gone dark,”— just like the Professor’s.
Still, we can’t help but wonder: what will the future of PBEs be?
First, a Definition
PBEs are defined in a variety of ways, but for our purposes, we are thinking of PBEs as does the Rand Corporation in its 2016 report “Private Health Insurance Exchanges”:
“Typically, businesses using a private exchange will offer employees a credit that can be applied toward the purchase of a health plan. Employees can then access a variety of health plans through an online portal and can chose and enroll in plans that meet their needs. . . . [P]rivate exchanges are run by insurance carriers or consultancies, rather than the states or the federal government. Plans offered on [a] private exchange are regulated as group coverage, and employees shopping on these exchanges are not eligible for the ACA’s tax credits or cost-sharing subsidies.”
Dorothy, Meet Malcolm Gladwell
In 2015, Accenture made a bullish prediction: PBE enrollment growth from the then-current level of 6 million to 40 million by 2018. It looks like that growth curve will fall short: in 2016, the actual number of enrollees was only 8 million—making 40 million in 2018 a big stretch.
Why are the numbers off? It’s not because of lack of growth. In November 2016, Employee Benefits Adviser reported that “Since September 2015, the number of employers using exchanges has increased 144%, the number of employees enrolling in benefits through the marketplaces has risen 92% and the number of lives covered by the plans sold on the platforms has jumped 100%.”
Employers’ intentions should have borne out the predicted curve: A 2016 Aon survey found that “15% of organizations are in full replacement now and another 43% are considering it in the next three-to-five years.”
So PBEs aren’t lacking in popularity; it’s just that the growth hasn’t met expectations. It may simply be that Accenture’s projected growth curve was the wrong shape. In his 2000 book, The Tipping Point, Malcolm Gladwell describes an “epidemic curve” that tracks the “contagious spread of a new idea” as a bell curve.
Accenture noted that the “mid-size employer segment of 100 to 2,500 employees is driving initial growth,” which follows Gladwell’s premise. Gladwell writes that Innovators and Early Adopters tend to be smaller companies, more willing to take risks. (Think: “I am Dorothy—the small and meek.” Dorothy undersells herself; she is a leader and a risk taker.)
For the Early Majority—more typically big companies—trying something new is harder because more complex change has to be managed to create success. Because the risk is greater, it is taken on more incrementally and therefore the anticipated benefit also is measured more incrementally. Accenture agrees: “Many large employers have been reluctant to be early adopters of the emerging private health insurance exchange model.” (Think: the Scarecrow, willing to follow Dorothy only after careful debate. And, you know, a song and dance number.)
Lions and Tigers and Bears
What, specifically, makes an employer reluctant to join a PBE? Those 43% of Aon-surveyed organizations who are still considering a PBE could be described as Gladwell’s Late Majority (they want proof) or Laggards (they see no urgency for change) or Cowardly Lions, but that last name would be so judge-y.
Employee Benefit Adviser found seven reasons that employers hesitate to introduce a PBE. I’ll restate these reasons as fears, which of course, is what they really are. These questions explain the stall in Accenture’s projected virality of PBEs; let’s call it the “lions, and tigers and bears, oh my!” syndrome. Fear makes us walk more slowly.
What if our employees or executives confuse private exchanges with the federal marketplace?
What if we lose control of our plan design or contribution strategy?
What if we incur extra costs due to administrative change?
What if we have to explain different state-mandated benefits to employees across multiple states?
What if we have to give up a consulting relationship we value or pay more to maintain it?
What if we aren’t getting objective advice from our PBE sponsor?
What if our carrier networks are disrupted?
PBEs are answering some of these questions. For example, the Private Exchange Evaluation Collaborative found in a 2016 survey that some 44% of survey participants who had implemented a PBE saved money by doing so.
With that same early experience, some Innovators and Early Adopters are now insisting PBE sponsors introduce more flexibility and customization to their offerings. The next growth area for PBEs may be a combination of continued expansion of the mid-size market and new growth in the larger employer market as the Late Majority becomes satisfied with the answers to its questions.
PBEs Began with a Carrot, Now Here’s the Stick
Dorothy begins her journey with a carrot (she wants to see the Wizard) but that journey is propelled by a stick (the Wicked Witch of the West). As always, the PBE story is not so different. PBEs began by offering choice, glorious choice. But in 2018, so does the stick.
PPACA reporting requirements, the Employer Mandate and the Cadillac Tax—the hassle factor—all may lead to a surge in PBE enrollments as PBEs are well-equipped to satisfy these requirements. Perhaps this will be the urgency the Laggards have been waiting to feel.
As communicators, we often worry about employees who disdain reading having to sort through oodles of choice. But the reality is that we deal with near limitless shopping choices in our daily lives (thanks, Amazon.com). So, is healthcare choice really so overwhelming?
Yes, yes it is. Health care, while acknowledged by employees to be vital to their employment decision, is not sexy. It’s complicated and a little boring. And this is where Smith sees PBEs not living up to their potential. The templated communications that are bundled into PBE services are often overly long and impenetrable, as well as lacking in any relation to the employer’s story, culture and brand.
Introducing a PBE and educating employees about their options doesn’t have to be a dry, dull business. You do have to pull back the curtain, and transparently show how a PBE works. The 2016 survey from the Private Exchange Evaluation Collaborative also found that employers who had implemented a PBE cited “communications and sufficient time to implement as critical success factors.”
Wherever we can make the PBE shopping experience more like any good online shopping experience—intuitive navigation, more consumer reviews, easier to understand comparison tools, improved decision support tools—we’ll help turn employees into savvy consumers.
When our communications succeed, the choice that could be overwhelming can become what employees value most about their healthcare benefits. And, the shopping experience can drive employee understanding of their benefits. What remains to be seen is whether the PBE also can increase long-term engagement in wellness and consumerism.
It’s All About the Shoes
So PBEs seem here to stay. They are working for employers and employees alike. They may be growing more slowly than expected, but they will keep growing. And the answer to their future growth, like the power of Dorothy’s ruby slippers, is something we’ve had all along—employers just have to learn it for themselves.
Hack (hak) v., a clever tip or solution for getting something done
When it comes to employee health care benefits in the United States, employers are finally getting some relief. Healthcare spending increases are historically low1, and employee satisfaction with workplace benefits is historically high2. But, if employers don’t take steps to level up their employees’ benefit skills and knowledge, these gains may be at risk.
Will Healthcare Consumerism Stick?
While some of the slowdown in healthcare inflation can be attributed to the recession and a slow economic recovery, healthcare consumerism has helped. Enrollment in employer-sponsored, high-deductible healthcare plans has increased from 4 to 20 percent over the last five years.4 At a record number of employers — more than one-fourth — the plan with the highest enrollment is a high-deductible plan.3
According to a study by researchers at Carnegie Mellon University, employers offering high-deductible plans have enjoyed an average cost savings of 5 percent compared with results at companies that didn’t offer them. That fact stands regardless of whether or not all workers at a given employer took a high-deductible option.4 With results like these, healthcare consumerism is gaining more corporate converts. More than half of employers are moving toward healthcare strategies that require employees to take a more active role.5
The cost savings achieved by those high-deductible plans have stuck so far — for three years post-launch, according to the Carnegie Mellon study. But the sustainability of those savings is in no way certain. If growing consumer savvy has eliminated waste, then the promise of healthcare consumerism is being realized. But past studies have shown that increased cost sharing caused patients to reduce both necessary and unnecessary care.4 If the recent bend in the healthcare trend is coming by way of cash-strapped, sticker-shocked employees skipping the care they need, then a tidal wave of costs and sick workers could be on its way.
Help Employees Crack the Code
You probably know someone, maybe a parent, who finally went out and bought his first smartphone. He has the latest and greatest, but he can barely get it unlocked to make a call; never mind sending a group text or downloading an app.
Without information, education, and decision support, a high-deductible plan in the hands of an employee is a lot like that underutilized smartphone in the hands of your grandfather.
To most employees, a healthcare plan is an uncrackable code. More than half of employees agree that they need more help understanding how their benefits work and meet their needs. This is especially the case with younger workers. But employees are not giving up. They are willing to take on greater costs and play a bigger role in healthcare decisions, but they are asking for help.2
5 Ways to Build Better Healthcare Consumers
To the sown seeds of healthcare consumerism, education is life-giving rain. While the right communication strategy and tactics will depend on an organization’s demographics, goals, and circumstances, here are five ways an organization can help its employees hack health care and do their benefits better.
1. Make your content useful.
A recent California study showed that many high-deductible plan members don’t have a grasp of plan basics. Most didn’t know that preventive screenings, office visits, and other important care required little or no out-of-pocket payment.6 That’s useful information, and employees want it. If we can become foodies, mixologists, and do-it-yourselfers, we can become benefits connoisseurs, ninjas, and mavens. Pierce the impenetrable code of confusing lingo. Focus your communications on the decisions employees will make and the actions they will take. Help employees become confident healthcare consumers by giving them simple but highly useful tips for getting the most from their benefits day-to-day.
2. Make your content accessible.
Your company’s firewall exists to keep people out. That includes your employees when they’re not at work and the dependents your plans cover around the clock. That’s great news for your company’s intellectual property, but it’s terrible news for a frustrated parent who’s trying to plan a doctor’s visit for a sick child. Create a benefits website outside your company’s firewall. This will give employees and their dependents access to important information according to their needs and schedule.
3.Create a better benefits experience.
The experience many employees have with their benefits is like the experience they have trying to assemble a piece of furniture. It’s an unfamiliar process accompanied with horrible instructions in tiny print. It’s no surprise they’re asking for help. Once you’ve made your benefits communication more useful and accessible, strive to create a better overall experience. Recognize that your communications exist to serve your employees, and not just ERISA. Give all your benefits touch points a familiar and consistent look and feel. Don’t settle for mere accuracy and compliance. Be of service. Make it easy. Make it attractive. Make it enjoyable. A better experience can defuse frustration, produce better results, and build the confidence employees crave.
4. Keep it going year round.
Imagine if buying a car was allowed only during an annual purchasing period and all the information — prices, reviews, descriptions, and options — was made available for only about three weeks each fall. If you don’t purchase a car by the deadline, you’re out of luck for another year (unless you experience a “qualifying automotive event”). How could someone make such a big, complex buying decision in that short amount of time? Enrolling in benefits can be just as expensive and complex. Educate employees year-round. Help them use their spending account balances before the year is up. Remind them to take advantage of those free preventive care services. Have an ongoing presence in your company newsletter, the intranet, and your employees’ home mailboxes. Give employees something useful, even when they’re not expecting it.
5. Personalize where possible.
We expect personalization from just about everything these days. Try to personalize your benefits communication where possible, too. Benefits confirmation statements are popular. Using case studies of recognizable personas can help employees tailor their choices to their own needs. Showing your employees why your company’s health plan is best suited to your workforce will reinforce their confidence and trust.
5 Views on Employment-Based Health Benefits: Findings from the 2014 Health and Voluntary Workplace Benefits Survey, by Paul Fronstin, Ph.D., Employee Benefit Research Institute, and Ruth Helman, Greenwald & Associates
6 In consumer-directed health plans, a majority of patients were unaware of free or low-cost preventive care.