Industry Trends – Alternative Health Options

Industry Trends – Alternative Health Options

As the pain of rising health care costs continue to stress both employers and their employees, ‘industry’ and more specifically, the private sector are striving to create alternative plans and health care management programs that strike at the heart of the inefficiencies and waste in the American health care system. The health venture established by Inc., Berkshire Hathaway Inc., and JP Morgan Chase & Co. is a great example and is taking aim at multiple constituents in the health care system as a part of a broad effort to reduce wasteful spending and more efficient use of the provider community.    They are seeking ways to improve care for the more than 1 million employees who get health insurance from the three firms. And the ‘health insurance industry’ is keeping a sharp eye on the innovations and developments from this project.  Over time, this venture has made it clear that they will make these new ideas and developments available freely to other companies. Meaning that if proven successful the effects could be felt broadly among the more than 150 million people in the U.S. who get their health insurance through work.

The core challenges of our health care system are not a secret, nor easy to solve. The aim is to drive better outcomes, better satisfaction with care and improved cost efficiencies with new models that drive consumer behavior to these core initiatives.

Unnecessary health care services represent 27.5 percent of the exorbitant costs of health care. That is $750 billion spent annually on unnecessary or inefficient care. Inappropriate care covers a range of services, from unnecessary tests and surgeries to over-prescribing antibiotics to painkillers. To bring health care spending in check, this is key place to start. In fairness, one problem is that there is no clear line that differentiates appropriate from inappropriate care.  It’s a grey area that varies from case to case, individual to individual. But there is a long list of reasons for the causes of inappropriate care and expenses, including fee-for-service models, defensive medical practices, cultural practices, and even direct consumer marketing.  Medical consumerism also plays a role because there is a disconnect between the consumer (patient) and who is actually paying the bill. When someone other than the consumer is paying the bill, the provider and consumer are less concerned about the underlying cost.

This all points to a greater need for accountability on the part of providers, education on the part of the end consumer, greater price transparency and financial incentives to seek the appropriate care at the appropriate time, at the appropriate cost.

The health industry has been reconfiguring itself. There will be even more new and creative ways to access health care. And you might be wondering why the title of this article is ‘Alternative Health Options’? That is because there are new and exciting health plans on the horizon that will help steer consumers to the most efficient, high performing outcomes-based providers. And these providers would be structured at lower costs to incentivize employee utilization. This helps to minimize spending on unnecessary or inappropriate care because you are starting with a provider that has a reputation of high value and successful outcomes.