Employers take the reins on healthcare delivery
Frustrated by high costs and legislative uncertainty, companies are cutting out traditional carriers and taking on employee care themselves.
Frustrated by rising costs and legislative uncertainty, companies are cutting out traditional carriers and taking on employee care themselves.
The healthcare system is “about to combust.” That’s according to Renya Spak, a partner at consulting firm Mercer, who explained that’s because legislative complexities and unpredictability — not to mention soaring healthcare costs and ineffective care — are wreaking havoc on the system.
“If we put everything in a pot together, voila, we have a system that is about to combust,” she said last month at the Benefits Forum & Expo in New Orleans.
To avoid that problem, experts explained during a panel at the conference, one group needs to step up: Employers.
“We’re paying the lion’s share for the care of most Americans in the U.S.,” said Milt Ezzard, vice president of global benefits at Activision Blizzard, the video game publisher of Candy Crush and Call of Duty. “In order for that to work, employers need to band together with each other and with good health carriers who can help leverage what an employer needs to have happen.
“An employer health-driven economy means employers collectively bear the burden of healthcare in our country,” he said at the conference, which was sponsored by Employee Benefit News and Employee Benefit Adviser. Ezzard is also one of EBN’s 2018 Benny Award recipients.
In fact, he said, “the bar for healthcare is so low that there is so much [employers] can do to make a difference.”
For example, Ezzard explained that Activision Blizzard used to partner with traditional carriers that offered conventional programs with third-party administration tools to process claims. But engagement between the insurers and employees was low, he said. In fact, within a year, the carrier made only a total of 17 “connections” with Blizzard employees, and that, Ezzard said, was a “huge failure.”
As a result, Activision Blizzard quickly terminated the contracts and started picking individual technology solutions to manage health conditions including obesity and diabetes, which has paid off for the firm. “For a lot less money, we can get resources that tell us about engagement, like how often [employees] go to the doctor.”
Employers need to stop waiting for the consultants and insurers and start driving the improvements themselves, added John Rankin, president of the North Carolina Business Group on Health, a trade association of employers in the state.
“As employers, large and small, we need to be willing to seek out that technology and drive it without knowing what that ROI is, without knowing there is a return on investment,” he added.
But he cautioned that with the plethora of technologies and providers out there, it still is going to be a challenge to integrate all the options.
“The bar for healthcare is so low that there is so much [employers] can do to make a difference.” Milt Ezzard, vice president of global benefits, Activision Blizzard
“What you’ve seen is employers try to do these Band-Aid solutions for disease conditions,” said Rajaie Batniji, co-founder and chief health officer at Collective Health. “It solves a problem, but it creates another. Now, instead of going to one place, you might be going to 25 places and have 25 passwords. You’ve suddenly created more complexity in your benefits plan.”
The reason employers are going out and looking for these best-in- class platforms is that large carriers haven’t done a very good job of connecting with people, he said. “They haven’t made it a good job to navigate through care.”
Many employers are keeping their eyes on a number of employer-led initiatives, such as the still-unfolding Amazon, Berkshire Hathaway and JPMorgan Chase health venture.
Though Rankin said “none of us know what they’re going to do,” Amazon has the potential to remove some of the middlemen, and that’s why companies like Cigna and Aetna are worried.
“I think [Amazon] will work with their employees, alongside Berkshire and JP Morgan, to get it right,” Rankin said. “That’s a good thing. Whatever they do will be a large-term effort that will allow them to roll that methodology out to other employers.”