Can Companies Really Overcome Their Healthcare Burden? Yes They Can and This is How to Do It:

In my recent article “Employers Trying to Fix Healthcare…Good Intentions, Failed Executions,”? the bottom line assertion was that any sustainable replacement model for our existing method of providing employer-funded healthcare would have to start with the commitment to first eliminate the middlemen.?These middlemen include health insurance companies, brokers, employee benefit managers, and third party administrators (TPAs) just to name a few. They represent added ongoing costs that add no value to the actual delivery of healthcare services and products to employees. This is not the insurmountable challenge that many believe it to be.

Healthcare middlemen control access to providers (physicians, hospitals, therapists etc.) and they control the data.?In many scenarios, they also control the flow of money between buyers (employers/employees) and sellers (providers). If we believe in a free market-based solution, we must?recognize this obstacle and execute on a viable replacement plan that yields a win/win for employees and for providers.?For a new model to work, the results must align buyers and sellers together and it must benefit both.?

What components should be included in a viable and sustainable employer-based model?

• Eliminate middlemen (health insurance companies, brokers, TPAs, benefit consultants et. al.) The objective is not just to cut-out wasted, add-on costs, but to create an efficient, marketplace environment that better serves employees, employers and providers collectively.
• Build a cloud-based, interactive platform connecting employers,?employees and providers for each selected local market. Fortunately, this is not entirely a ground-up development project, since much of the database content is currently available through various existing sources. Similar to existing scaled-up websites, the platform architecture would include: 1)?Front End providing multiple portals, 2)?Back End, and 3)?Database/DBMS .
• Make provider profiles, prices and patient expenses accessible online. Incentivize employees to make informed choices for providers, treatment options and decisions in purchasing healthcare services and products.?The site would give employees the most current information on outcomes data and available clinical pathways for making all of their choices.
• Provide functionality that substantially reduces provider operating expenses by eliminating billing/collections (i.e.no accounts receivables), administrative labor costs and bad debt.
• Replace diagnosis-based pricing and complex coding with a simpler, value-based pricing system. It is not enough to alter how healthcare services are priced and paid for.?The actual methodology for practically and rapidly implementing?this pricing transition with potential providers is critical to a successful launch.
• Eliminate the continuous cycle of negotiating separate contracts with each provider .?This can be accomplished with comparative “fixed rate provider pricing” and full, online price transparency.
• Establish employer-sponsored (may include annual employer contributions) health savings accounts (HSA) and make employees responsible for “first dollar” coverage/payments up to a predetermined stop loss amount that is based on the Level of Coverage Plan (LCP). All payments, made by both employees/family members and the employer will be tracked on a secured employee portal.?There should be no premiums, deductibles or?copayments.?Note: Most large employers are already self-insured and carry some form of reinsurance as a “stop loss” for a chosen level of financial exposure.
• Employers would have access to various levels (HIPAA compliant) of ongoing costs, utilization data, continuous performance metrics (KPIs), risk stratification and predictive analytics data.
• Utilize AI-powered technology to create efficiencies (diagnostic, treatment and user experience) for providers and patients/employees.
• Provide online and phone support for provider?and employee portals.

The new technology platform will need to provide employee-centric information and direct provider access capability. It should also include diagnostic and treatment pathways that enable data-based decision making. The platform would facilitate comparative pricing transparency from providers along with seamless interface between employees/patients and providers.??

In addition to eliminating middlemen and replacing them with a dynamic, interactive, cloud-based technology platform, it must be understood that all healthcare is local and not all local healthcare markets behave the same.?Further, not all large companies have a sufficient number of employees residing in one regional or?metropolitan marketplace to effectively leverage purchasing power.?Therefore, market assessment and multi-employer collaboration need to be included in the rollout strategy. After transformation to and acceptance of the new technology, buyer-side (critical mass) leverage will?no longer be a barrier to geographic market entry.

Rather than nipping at the edges and trying to “fix” the existing healthcare delivery system, we need to spend our energies and money on moving to a new model that satisfies all of the market participants.?To accomplish this task, it requires two things that have been missing from all prior and present attempts:

1. The design of a simpler, workable, technology-based solution, and
2. Imaginative and fully committed Leadership

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The Author:

Kevin O’Donnell was the founder of Healthcare Resources of America and is currently CEO & Managing Director of HRA Partners, a Dallas-based firm that provides advisory services to healthcare companies and private investors.?HRA has designed a model technology platform that replaces the middlemen (health insurance companies, brokers, TPAs et. al.) and enables large employers, and groups of employers, to manage all aspects of healthcare for their employees. ?

This technology platform is called “CareSite?.”