The Annual Health Benefits Kabuki Dance Has Created the Greatest Heist in American History

American Workforce Shortchanged $500 Billion Every Year

The data is clear that the middle class is in an economic depression because of what looks like a breach of fiduciary duty by their employers. This has created the strangest election in my lifetime -- look no further than 1930s Germany to see the effects of sustained economic duress on a citizenry. Donald Trump and Bernie Sanders represent the primal screams of the American middle class that is at least 95% driven by healthcare's unnecessary and easily avoided hyperinflation.

It's stupefying how companies that will rigorously check whether there's a receipt for a $58 dinner an employee reported, will blindly squander millions unnecessarily on healthcare. At the big picture level, Pwc has pointed out that more than half of healthcare spending adds no value. At a ground level, we see employers spending 55% less on health benefits with a benefits package better than 99% of the workforce.  One of the easiest methods is avoiding the PPO networks that charge organizations for the privilege of giving them access to a network where they'll routinely be charged 50% more than necessary. As outrageous as it sounds, many PPO networks regularly have prices that are 200-1000% higher than is appropriate.

I will let benefits expert Craig Lack explain the annual kabuki dance involving health plans and employers:

This year’s renewal feels just like last year and three years ago and five and basically the same tactics for a decade. All the tactics heretofore have basically boiled down to three things: shift costs or reduce benefits or limit access to care by offering narrow networks. Employers have been conditioned to believe the best they can hope for is a less bad rate increase. The CFO asks Benefits/HR for a budget increase target and the culture at most organizations is to preserve the status quo. So, the insurance carriers know the game and the benefits brokers know the corporate culture and the Benefits/HR staff–who don’t want change! The renewal comes in at 11-14%. The broker/consultants “negotiate” a 3% increase, then compare to national benchmarks at 7% and the CFO’s budget at 8% and there you have it. Check the box. Healthcare is renewed. See you next year. And that’s what passes as healthcare risk management at far too many organizations.

The largest national consulting firms publish articles with size 48 fonts stating that the next year’s trend increase to be expected is only 6.50%–hooray! In the old model of healthcare, the supply side dictated the pricing and terms. Today, forward-looking organizations realize that they’d be derelict in their duties to leave these areas unmanaged. In the process, modern organizations are turning what many view as a liability (healthcare costs) and turning it into a source of competitive advantage as their competitors are asleep at the wheel.  

Forward-looking benefits consultants have the opportunity to become a charter member of the  Health Rosetta Benefits Professional Certification (scroll down to view in the right hand column). This will differentiate them from their peers and open up new and different arrangements where their financial interests become aligned. Today, there is frequently a conflict of interest given perverse financial arrangements with health plans they offer to clients. It's simply a matter of time before employers will seek out benefits consultants with certifications of this nature. Employers can take advantage of the  Health Benefits 2nd Opinion to ensure they aren't missing opportunities to save millions.

If fixes already exist, why isn't everyone using them?

Healthcare’s redemption is a classic example of solutions hidden in plain site. Noted business consultant and author Ric Merrifield summed this up better than us during message testing.

"The Big Short, and Moneyball, had one major theme in common–in the face of a mountain of evidence, the evidence was ignored... Wall Street and regulators didn’t downgrade the credit ratings of the mortgage backed securities even when the mountain of evidence was presented to them.

So why should we expect healthcare to be any different? Healthcare is in the same place at the moment. The healthcare mess in many ways is happening in broad daylight."

Like The Big Short, The Big Heist will shine a light on what is happening in plain sight.