Two trends in health benefits highlight a unique opportunity for brokers and consultants to bring their customers a new health plan offering that can bend the curve on costs. (Photo: Shutterstock)
In the past six months, the health care system has been tested in ways no one could have imagined. We've seen employers go to extraordinary lengths to support their workforces' health and safety. We've seen the government mandate zero cost-sharing for certain services, reduce prior authorization requirements, and loosen telehealth service requirements. We've seen self-funded plan sponsors and insurers pivot on a dime to support adjustments in benefits and coverage for COVID-related testing, treatment, and cost-sharing changes in unprecedented—and possibly never to be repeated—ways. And it's far from over.
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When conditions are this uncertain, it is tempting to argue for the status quo. Except, prior to the onset of the pandemic, the status quo was already on shaky ground—rising costs, steadily increasing numbers of people with one or more chronic conditions, consolidation in care delivery. Many employers were—and are—being forced to choose between meeting their budgets or shifting more of the health care cost to employees. Health benefits were already under siege.
Then came the pandemic.
As the Nobel Prize-winning economist Paul Romer famously said, "a crisis is a terrible thing to waste." We certainly have a crisis.
Two trends in health benefits highlight a unique opportunity for brokers and consultants to bring their customers a new health plan offering that can bend the curve on costs and improve employee health and well-being. Neither are new ideas, but the pandemic has drawn them into focus.
Rising costs, rising consumer engagement
Trend 1: In June 2020, PwC's Health Research Institute (HRI) projected employer spending on health care could increase anywhere from 4% to 10% next year. On the surface, it's the same old story: costs continue to rise. But HRI data also suggests that employers could play a greater role than ever in protecting their employee's health. That's a powerful opportunity for change.
Trend 2: Deloitte reports that 46% of consumers with health insurance said they have gained a better understanding of their benefits since the COVID-19 crisis began. Employees are more ready than ever to be active participants in their health plan and have greater control over their health care experience.
There's a powerful link between these trends. The idea of consumer-driven health care has long held out the promise of the market efficiencies of other consumer products. But health insurance was often confusing or rewarded more complex care. Consumers didn't really have market power.
Help employees buy better
Employers have an opportunity to align their interests in controlling costs with their employees' interest of affordable health benefits through better benefits design. A health plan that allows employees to see treatment path options across many conditions in real time, as well as cost and quality comparisons, gives employees the opportunity to choose the most effective treatment path for them.
When cost differences and quality ratings are shown upfront, side-by-side, it exposes value—helping employees see and select the best choice for the employee before seeking care or filling a prescription. Cost, coverage, and choice transparency can lead to lower out-of-pocket costs for employees and more sustainable savings for employers.
Put more dollars toward better outcomes
Once employers have a health plan that is designed to align cost with clinical effectiveness, they can put more dollars toward treatment options and providers that offer the best possible health outcomes for their employees.
For hip pain, for example, that means putting more subsidy into physical therapy or therapeutic injections first, and less subsidy into immediate surgical procedures. But if less invasive treatments can't resolve the problem, the employee's health plan should help find the provider who delivers the best outcomes.
Subsidizing employee health care in this manner targets waste. The more waste eliminated, the more money employers have available to reduce their employees' cost-sharing burden and offer a richer benefit that can lead to improved employee health.
What does a richer benefit look like? It not only puts more subsidy into efficient treatments and providers but also into chronic and emergent conditions where care avoidance can often be dangerous and lead to higher costs down the road. More subsidy for early cancer treatment, maternity care, treatment of chronic conditions like diabetes, COPD, rheumatoid arthritis, and HIV—among others.
It's time for change
The worldwide response to the COVID-19 pandemic has shown we can change things we long-assumed couldn't be fixed. This crisis is an excellent time to reconsider how a health benefits plan should be designed. Employers are finding that when they offer health benefits that delivers value, employee engagement and satisfaction goes up. And it can also be good for the bottom line.
Be the broker who thinks outside of the box and brings your clients and prospects a new solution—one that benefits everyone.
Jodi Hubler, president of Bind, believes innovation and certainty are the keys to health benefits design. A veteran health care industry executive, investor, and former CHRO, she has a unique perspective on what makes good business, good policy, and high-quality employee benefit programs.
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