By Melina Kambitsi, Ph.D., Vice President, Business Development and Member Services
Businesses have a big stake in helping fix health care.
Employers provide health benefits for more people than Medicare, Medicaid, individuals who buy insurance or the military. Among people with health insurance, employers pay all or part of the cost of coverage for almost half of them.
When employers offer a health benefit plan, they also subsidize its cost.
The Kaiser Family Foundation/Health Research & Education Trust 2017 Employer Health Benefits Survey reports that the annual premium for employer-sponsored family health coverage averages $18,764. Workers pay an average of $5,714 of that cost, with the employer picking up the rest, or $13,050.
Working Together
High costs are part of what ails health care, but there are also other issues. Elisabeth Rosenthal, a doctor and journalist, describes the health care system as “fantastically expensive, inefficient, bewildering and inequitable” in her best-selling book, An American Sickness. Rosenthal will talk about what employers can do to help change health care when she speaks
at The Alliance Annual Seminar on May 17 in Madison. The free event is open to employers.
Employers often work together in health benefit coalitions or cooperatives to give them more influence in the health care marketplace. Working together in a group can help employers negotiate with health care providers, develop innovative approaches, offer education and share what works and what doesn’t.
For example, The Alliance is a cooperative of 240 self-funded employers in Wisconsin, Illinois and Iowa. For nearly 30 years, The Alliance has been bringing employers together to contract directly with doctors and hospitals to get lower prices and seek a higher level of care. The Alliance also offers resources that support smarter self-funding.
Employer Innovations
Employer coalitions often help employers explore innovative approaches such as:
- Data-driven benefit decisions. Employers who self-fund their health benefit plan gain access to data that can guide their decisions. An employer with a high number of employees who have diabetes, for example, may want to adopt a value-based insurance design to lower the employee’s out-of-pocket cost for diabetes prescriptions. This encourages employees to take medication now to help prevent costly complications later.
- Bundled payment options. In a bundled approach, the health benefit plan pays a fixed amount that covers multiple elements of a surgery or treatment. That makes costs more predictable and typically lowers the total bill.
- Centers of excellence. In a centers of excellence program, the employer provides incentives for employees to use high-quality care. In return, the employer gets a lower cost from the provider, which often includes bundled payments. Achieving better outcomes can also lower long-term costs by reducing unnecessary care and complications. The QualityPath program from The Alliance is an example of this approach.
- Onsite clinics. An onsite clinic brings primary care services to the workplace so employees can easily get care. This care is often free or low-cost to the employee. The employer typically saves money too. Smaller employers sometimes band together to offer primary care services in a “near-site” clinic.
Will the ‘Big Three’ Do It For You?
Early this year, Amazon, JP Morgan Chase and Berkshire Hathaway announced they are working together to form an independent health company for their U.S. employees. These well-known innovators plan to use their knowledge of health insurance and consumer decision-making to create a new model of health care.
But employers should not leave the future of health care to the “Big Three” to solve, according to Sally Welborn, who was senior vice president of Global Benefits for Walmart Stores, Inc. before forming her own benefit consulting firm.
Welborn thinks all employers should work toward finding solutions now. Welborn will speak at The Alliance Annual Seminar on May 17 about “Why You Can’t Wait for Amazon, Berkshire Hathaway and JP Morgan Chase to Fix Health Care.”
You Can Get Involved
So what can you do? These three steps can help your organization get involved in employer-led efforts to improve the health care system.
- Look for regional employer health benefit coalitions or cooperatives in your area. Many of these groups offer free or low-cost educational opportunities.
- Learn about health benefit options. The Society for Human Resource Management (www.shrm.org) offers resources.
- Explore self-funding. The Self-Insurance Educational Foundation (www.siefonline.org) and The Alliance (www.the-alliance.org ) offer more information.
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