Solving Healthcare's Cost/Complexity Conundrum for Employers and Employees
If Benjamin Franklin was alive today, his famous quote about death and taxes being the only two certainties in this world would almost certainly include a third – escalating healthcare costs - at least in the US. According to the 2018 Benchmark Kaiser Family Foundation Employer Health Benefits Survey released earlier this month, the average annual coverage premium for families rose 5% in 2018 to just under $20,000, with employees contributing around $5,500. While 5% may not seem like a lot, a look over the past 10 years shows that average family premiums have increased more than twice as fast as workers’ earnings and three times the rate inflation. While this not necessarily surprising news, it’s pretty depressing to see wage gains all but erased by rising healthcare costs.
What is driving health care costs?
Several factors are contributing to the increase, but perhaps one of the largest is the prevalence of chronic conditions and mental illness, including diabetes, cancer, asthma, obesity, heart disease and depression, which comprise more than 85 percent of the $2.7 trillion in annual health care expenditures in the U.S. It’s hard to believe, but according to the National Center for Chronic Disease Prevention and Health Promotion, around half of all American adults have one chronic condition, with one in four having two or more.
Another key contributor is the sheer complexity and lack of easy access to information that employees face. With no easy way to navigate their specific benefits and plans, employees are unable to make the best or most cost-effective decisions about their health. Very often, in the face of incomplete, confusing or disjointed information, they unknowingly make expensive and under-informed choices. Employees don’t have the time or tools to untangle this complexity. I have experienced these issues firsthand - overbilling, out-of-network doctors, and unnecessary tests - and can attest to the frustration and stress this causes employees and their families.
While standalone health advocacy and concierge services have the best intentions to get employees to the right services or care, they focus on episodic situations or condition-specific needs and don’t span the full spectrum of health – from leading a healthy lifestyle to condition management. As a result, these services are not nearly as valuable as they could and should be. When integrated into a holistic and engaging experience that also focuses on prevention and healthy habit formation, however, the collective potential and value of these high-touch services can increase exponentially.
How do we break the cycle?
At Virgin Pulse, we recognize that our clients are faced with tough decisions every day when it comes to rising healthcare costs, employee health, wellbeing and engagement. Today, the market is highly fragmented and no one company can help organizations address these pressing and costly challenges issues. This is a problem desperately in need of a thoughtful, consumer focused-solution that acknowledges the need to blend high-tech and high-touch to engage and support consumers at every stage of their health journey – from prevention to intervention to reversal.
Our commitment to you and the market: Virgin Pulse believes that the market should not have to settle for a partial solution, nor should clients be forced to manage multiple disparate programs and vendors. The overall experience must be seamlessly integrated and program usage must be tied to outcomes and results. Anchored in industry-leading engagement results, our approach is to constantly survey the market to understand how and where we can improve the experience for our clients and consumers. When we see opportunities to make it easier for them to solve key challenges, whether through product innovation, partnership or acquisition, we act. We did this recently with RedBrick Health - we saw an opportunity to streamline and simplify the health experience for our clients and users by integrating RedBrick Health’s whole person live services into Virgin Pulse’s digital behavior change platform.
Our goal is to drive engagement up and costs down by delivering the tools, features and services required to make the journey for our clients and their employees simple, meaningful and effective.
If we can assist individuals with chronic conditions sooner, and direct them to the care, information, and interventions they require, while also supporting them in building healthy habits - every day - that lead to sustainable behavior change, we can bring down or stabilize these costs while also improving health. Supporting employees through a high tech/high touch approach that offers a personalized, digitized experience infused with live coaching at the right time, can also accelerate positive health outcomes, and ultimately drive costs down. Moreover, having the ability to analyze medical and pharmaceutical claims to drive personalization and identify gaps in care can further improve health, reduce costs and accelerate ROI for our clients.
The health and wellbeing market is ripe for disruption. Virgin Pulse is proud to be pioneering this revolution and simplifying health and wellbeing, for good!
And with that, I encourage you to stay tuned….