…and the rest of America
by Dave ChaseMr. Chase is co-founder of Health Rosetta, which aims to accelerate the adoption of simple, practical, non-partisan fixes to our health care system. He is also the author of “The CEO’s Guide to Restoring the American Dream: How to Deliver World Class Health Care to Your Employees at Half the Cost.” (Health Rosetta Media, September 2017).
The United States has always been thought of as the land of opportunity – that here, with enough hard work and dedication, you can build a life for yourself that was once only a figment of your imagination. However, the odds of anyone’s American Dream becoming reality have steadily decreased year over year thanks to our broken healthcare system and the convoluted way in which its funded: Americans’ hard-earned dollars. This explains why healthcare is projected to be a topic of primary importance in this upcoming election, and why people on opposite ends of the political spectrum are in total agreement on at least one thing: healthcare absolutely has to change.
More legislation isn’t necessarily the answer though. Politicians’ pushes for better transparency and affordability – especially Republican Sen. Lamar Alexander’s and Democratic Sen. Patty Murray’s proposed Lower Health Care Costs Act of 2019 – is a step forward. However, truly fixing this healthcare system actually starts with employers and the benefits advisors who help them with their health plans. Most just don’t know it.
That’s why I wrote The CEO’s Guide to Restoring the American Dream: How to Deliver World Class Health Care to Your Employees at Half the Cost. In it, I explain why advisors and employers have the power to be very necessary change agents- nearly half of all Americans, including those that are unfortunately uninsured, get health insurance from their employer. That said, the health plans benefits advisors help employers select largely determine what kind of care most Americans have access to.
This is a huge responsibility, but also a great opportunity to revolutionize healthcare. Right now, the status quo care many receive is the subpar product of the fee-for-service payment model covered by most fully-insured plans from old-line carriers. In such a system, patients, and therefore their employers, are charged for each individual service, scan or test they receive.
Fee For Service: Problematic
Fee-for-service is problematic for two reasons. First, high-cost care does not equal high-quality care, and there’s no easy way for employers or their employees to know what they’re paying for. Second, it’s extremely expensive for both employers and their employees, many of whom face higher deductibles and premiums each year due to their employers’ premiums annually increasing by 5%-20%. Advisors are well aware of that 5%-20% annual increase, but may be in the dark about how this common practice has kept wages flat for 20 years.
Therein lies the explanation for why our current health care system is killing the American Dream. Rather than having a portion of their company’s profits boost employees’ salaries, employers are having to spend more money on healthcare with no additional perks or quality improvements. And when patient problems aren’t properly addressed in their first physician encounter, a vicious cycle ensues where the patient has to make multiple follow-up visits and thus spend more money they and their employer don’t have.
Value-based care is the ideal alternative, and the tools advisors need to help employers craft health plans providing it are already out there. Hardly a day goes by without hearing of another employer who has seen a sustained 20% or more drop in healthcare spending by just saying no to price-gouging by hospitals and PBM shenanigans. After all, health care cost are flat… despite what you may have heard.
Compared to fee-for-service, value-based care gives providers even more incentive to do their job well. They are rewarded for having positive patient outcomes, not ordering a multitude of tests, so instead of being encouraged by their employing health system to order and prescribe more—since that will ultimately make the provider more money—value-based physicians aim to get to the bottom of patients’ ailments sooner by spending more time with them during their appointments. They’re more thorough, too, inquiring about what lifestyle factors could be influencing a patient’s condition.
Fortunately, with advisors’ assistance, value-based care can become the new status quo. All advisors have to do is show employers everything I’ve explained above, and cover in greater detail in my book. Once they get that executive buy-in, advisors can walk them through next steps, which often include cutting ties with their insurance carrier and taking matters into their own hands by designing a self-funded plan that points employees toward value-based physicians.
Advisors will have to seek these out, looking carefully at their costs and care quality before choosing to include them in the employer’s Transparent Open Network (the successor to PPO that have enabled a large wealth transfer from the middle class to the healthcare system). They should also encourage employers to use a carrier-independent third-party administrator (TPA) to process claims and perform administrative duties, and utilize a transparent, pass-through pharmacy benefit manager (PBM) to keep drug costs in check.
I mentioned earlier how America is a land of opportunity, and as such, advisors and employers must realize and act upon the fact that they are under no obligation to keep respectively selling purchasing health plans as they’ve always done. And as everyone keeps searching for a way to improve our catastrophic healthcare system, the advisors and employers who make this critical shift now will be grateful they did in the years to come. ◊