Employee Benefits

Healthcare is in for a Bumpy Ride

Beau Reid
Beau Reid
Senior Vice President, Employee Benefits

Health insurance is expensive. It’s complex. And our country is one of the least healthy in the world. Double-digit, compounding inflation is crippling America’s business owners. Hardly the ecosystem for “status quo” to thrive. Yet, it does…yet, it has.

What has status quo meant to business owners and employees? For business owners, it’s meant HMOs, point-of-service plans, PPOs, narrow networks, high performance networks, ACOs, carve-out PBMs, pharmacy rebates, etc. And now, the latest status quo offering is a revival of Association Health Plans.

For employees, status quo has meant higher deductibles, higher out-of-pocket limits, multiple plan choices in a self-service environment, mandated wellness screenings, mandatory generic medicines, multiple formulary tiers, and changes parameters annually. In the midst of all of this is often the changing of insurance carriers as well.

So how in the world has this downward spiral worsened as the status quo is maintained? Simple…MONEY! Every business associated with delivering, insuring, or servicing healthcare and pharmaceuticals has made lots and lots of money. Healthcare represents 17.9 percent of the nation’s gross domestic product (GDP). Vendors within the marketplace have all made a lot of money in a blinded environment where price and quality comparison shopping simply cannot exist due to a fundamental lack of transparency. Everyone keeps kicking the ball down the field because it’s profitable to do so. Status quo is no longer affordable. It’s bad for employers. It’s bad for employees. Yet, it seems to work just fine for everyone else associated with the industry.

There must be change — change that brings transparency in price and quality to the consumer’s fingertips.

Industry-sponsored innovation has been largely about narrowing choice or transferring cost and/or risk to the end user…all of which creates disruption, stress, and confusion with patients/consumers. HSA plans were hailed as an innovation that would create consumer-directed buying, and result in the consumer demanding full transparency which would reset the marketplace. They couldn’t have foreseen the proliferation of specialty pharmacy that causes most folks on a high deductible plan to meet their deductible in the first month of the year. Association Health Plans don’t address the root problems either.

So how do we root out status quo, disguised as innovation, and truly move towards radical change for the better? We need innovation that fundamentally aligns all the moving parts to provide:

  • Clarity in the form of simplicity,
  • Time savings born from simplicity and efficiency, and
  • Healthier plan participants who don’t consume as much healthcare.

Is this possible? Yes…but it will take business owners and employees to stand up and demand uncomfortable change. Status quo, although expensive, is easy and feels safe. But easy and safe will not solve our problem.

If you watch the news, change is afoot. Three change agents have entered the fray with promises of disruption and a more consumer-oriented approach — Berkshire Hathaway (think insurance), JP Morgan Chase (think financing, investment banking, and credit card processing), and Amazon (the pinnacle of direct to consumer marketing). Have you heard about it? If you haven’t, you will.

How this plays out is anyone’s guess. Will it work? I don’t know. But one thing I can tell you is to buckle up…the ride may get bumpy.

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