What's your companies exit strategy?

Employers throughout the US that provide #grouphealthinsurance to their employees have one common problem; the cost of providing the insurance is crushing their bottom line. This is particularly challenging considering the current fight for talent and with a recession looming.

Plan sponsors mostly rely on benefit advisors and insurers to provide solutions that can put an end or at least slow down the trajectory of the Pay More, Get Less error of healthcare and insurance. For most, the solutions have no affect. Healthcare and prescription costs, medical trend and inflation just keep coming year after year...for most.

Benefit Decision Makers (aka HR Leaders, CEO's and CFO's) must be hearing the noise from outside the traditional benefits landscape from companies and advisors that are successfully breaking free from the status quo. In fact, many claim to be enhancing benefits, improving population health and lowering the cost to insure by 25% or more.

The stories are coming from all parts of the country, from Mom-and-Pop stores to School Districts and Large Manufacturers. What do they know that most don't?

The secret is hidden in the numbers that for most are still hidden under lock and key by the very entities they trust with providing access to high-quality healthcare. The simple truth is that the health systems that loom over large cities and small rural communities are manipulating their prices while the insurers customers believe provide deep 'discounts' are paying significantly more than cost and many times what Medicare and Medicaid pay.

Employers and their hard-working employees are subsidizing a healthcare system that is unsustainable. Insurers, despite popular belief, profit off paying more and more for healthcare. Their profit under the Medical Loss Ratio (MLR) provision of the Affordable Care Act (ACA) is tied to a percentage of billed premium and paid claims. Simply put, they have higher earnings when they pay higher claims that justify higher premiums. Earnings drives stock price, which for publicly traded companies if the Holy Grail.

Not to mention the fact that every stakeholder with the exception of employer and employee makes more money under the traditional model when premiums increase. Brokers earn more on a percentage of premium basis; insurers earn more as a percentage of premium and the health systems earn more when 'allowable rates' go up.

Organizations like #healthrosetta seem to have many of the answers but there is no absolute best solution for all employers. Here is a list of just a few of the thing's employers can do to start chipping away at their health insurance program.

1. Mindset Shift - Take your focus off of the health insurance and focus on the cost and quality of healthcare. Health insurance makes providing access to care simple, but it also hides the misaligned incentives, hidden profits and artificial prices that result in higher premiums. When you are focused on insurance you feel informed, you can see what the insurance costs and it makes renewal easy (painful but easy). When you realize you are actually purchasing healthcare for your employees and financing it with insurance you start to realize you have no idea what you are actually paying for. You can now question the value your insurance partners are providing and demand actionable data.
2. Demand Actionable Data - Data has been kept from the American Healthcare Consumer for far too long. Recent legislation mandates the release of data from hospitals, insurers and other payers, which is wonderful but not without challenges. While many refuse to release their data, those that have complied have done so in a not so user-friendly manner. Luckily technology has finally found its way into the healthcare space. Many companies have realized that in the trillion-dollar world of health care and insurance is tremendous opportunity to provide guidance, clarity and make money. Companies like TPA Stream can help plan sponsors access data on fully insured plans that provides insights into costs and population health that helps employers and advisors make meaningful and informed decisions regarding plan design, funding options, and benefit additions.
3. Analysis - Once an employer has access to their data they need to know where to take and with whom to partner to analyze the data. Based on the depth of the data, conducting an independent pharmacy analysis and self-insurance feasibility analysis are essential. Be ready for what you'll discover. Often the analysis identifies just what little value large carrier networks and carrier partnered pharmacy benefit managers provide. While insurers dangle their 50-60% discounts like carrots in front of plan sponsors, the truth is that a 'discount' of any size based off an artificially inflated price is useless. For example, a 50% discount off an MRI that costs $200 but is priced at $7,000 with end with a payment of $3,500. The same MRI at another facility down the road can be as little as $800 and perhaps less if paid in cash. Yes, cash is still king in healthcare and it's making a huge comeback.
4. Planning - Develop a 3-to-5-year plan. No one likes disruption, this is especially true of human resource professionals. Change has a price, there's no doubt. But the price for staying the course with existing partners and strategies is much greater. Premiums are about to go into Mach speed. There are many reasons for this including: (1) an exodus of employers that decide to take a new course. Those that stay the course will be expected to pick up the slack...in profits, (2) New and costly specialty medications entering the market, (3) the migration of insurers into the healthcare ecosystem. Insurers like United Healthcare, Aetna and CIGNA are making significant investments into healthcare and dont think it's to drop prices. They will be reimbursing themselves more with your claim dollars.
5. Demand More from your Partners - Benefits brokers have had it easy for quite some time. Managed Care groomed the American Healthcare Consumer into a zombie-like being that willingly accepted that the claims are the claims, costs will always go up 5-10%, and that the discounts are real. Insurers actually invented the term 'Consumerism' as a way to blame the consumer for skyrocketing premiums because they didn't have enough skin-in-the-game. Brokers were expected to deliver this message to the consumer, and they did very successfully. Consumerism waved the way for high-deductible health plans that are a major contributor of medical debt and bankruptcy. That's not to say, HDHP's don't have a place in the insurance universe, they do. However, far too often the out-of-pocket cost is too much to bear. Benefits brokers and advisors must step up, chose a side and help elevate their clients' expectations. Their compensation should be aligned with their clients and the client should not be embarrassed to challenge their brokers healthcare and insurance IQ.

Many experts close to healthcare and insurance see a very different landscape in the next 10 years but only if the consumer demands change. We are at a critical point and the consumer will be the one that ultimately decides where we go from here. Will insurers successfully take over healthcare and guarantee higher prices and premiums by being the hand that robs from hard working Americans to pay itself with your money?

Or will the American Healthcare Consumer awake from its coma and be the one who reinvents the patient doctor relationship, declines healthcare takeover by insurers, and demands high-quality and fair prices?

The end is not yet in sight, but the stakes are very high. My bet is on the consumer and the practitioners, and I hope I am right. Organizations like Health Rosetta, Aspirational Healthcare and Free Market Medical give me reason to be optimistic. Check them out yourself, it's your healthcare dollar; wouldn't it be nice to see where it goes and what it can do?