- Posted by Chris Elvidge
- On December 13, 2019
A new decade is upon us. As we soak up the last few remaining days of 2019, let’s pause and look back over the past year, and some of the themes and issues that are worth reexamining due to the influence and impact they will have on employer/employee health, wealth, and overall well-being in the coming year (and new decade).
2020 will be pivotal year with the continued development of new products that will disrupt the marketplace. Traditional health plans have not been able to stem high cost increases, so we will continue to see innovators that tear down the standard models and try different ways to deliver health care insurance.
2019 Trend Recap
Health Care Insurance Models Evolving
It began in January of 2018 when three corporate giants – Amazon, Berkshire Hathaway and J.P. Morgan—announced that they wanted to do something about the problem of rising health care costs for their employees. A number of key executives and experts were hired with the goal to build a network of doctors and hospitals based on performance, cost, and other factors. It would then direct employees to the appropriate type of care for their condition and preventing them from seeing doctors that over-charge and under-perform.
The ‘Amazon effect’ has spawned other new and creative entrepreneurial insurance plans that are sprouting up as employers face rising health care costs and individuals who buy their own coverage without an Affordable Care Act subsidy struggle to pay premiums.
Reference Based Pricing, Captives, and other dynamic models will continue to evolve and develop in 2020 as employers embrace insurance that delivers value, efficiency, and quality.
Insurance and Technology
From purchasing to consumption of health care, the industry is evolving from a paper or group enrollment meeting to an online or virtual experience.
Over the next few years, advancing computer technologies will become pivotal to growth in the marketplace, helping to guide employees to make smart health care decisions and give them the tools necessary to shop for the best price. But, the benefits of technology won’t be limited to the worker, as many stakeholders in the health benefits arena will capitalize on its value.
Patient Consumer Sites that offer guidance, coupons, and rebate programs have exploded over the past year. These sites have been extremely successful in helping consumers successfully access the resources they need to significantly reduce their cost. Patient consumer sites like GoodRx.com and NeedyMeds.com will show you the cash price for a prescription medication at multiple pharmacies in your geographic area. Many common maintenance medications are included in the pricing exercise and you don’t need a membership for these sites.
Transparency is key in this new health plan environment. It all starts with quality, appropriate care. Health care providers race to drive higher quality to gain patient steerage. In this ‘Amazonian’ world, higher quality ratings will drive a challenge to deliver more appropriate, cost effective and high quality care.
Keep in mind that in today’s environment there is little correlation between high quality and high cost in health care. That will change as these new models take hold and drive behaviors that will drive efficiencies into the system. Ultimately, health care data and transparency will drive, first and foremost, quality care, which will ultimately lower the cost of care through these efficiencies. Waiting for government regulation is not the answer, but we as consultants and employers must continue working to drive change and improvement in the health care system.
The population health movement has been gaining momentum over the past decade, particularly since the passage of the Patient Protection and Affordable Care Act. But the true comprehension of population health and what it means is often misunderstood, or viewed by many employers as something that is too complicated or too daunting to implement. It is, in many cases, seen as a concept only for the ‘big companies’, those with analytics and data to drill down and identify root causes of illness. Although there is some truth to that statement, population health is not exclusive to a certain segment of business, but an ideal that can be homogenized over all businesses, corporations, and communities. Population health is building a culture of health and wellness. And it doesn’t just mean biometric screenings and walking programs at work. It truly means a deep culture of health and wellness.
Many of the challenges we faced in 2019 will continue in 2020, including rising costs and trying to engage a workforce to help moderate health care utilization and hold the line on rising health insurance premiums that have increased well over 190% since 1999 (Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999-2014).
The moral of the story is the medical insurance (in particular) industry is a disciplined business. There are always new and alternative funding options, plan designs, and creative solutions that need to be examined. In the end, much of our daily grind is fulfilling the fiscal commitment to our company while balancing the needs of the valued employees who rely on benefits.