By: Nancy Reardon, Chief Strategy & Product Officer, Maestro Health
We can all agree on one thing: The current U.S. healthcare system is broken. Many employers have little transparency into why their health benefit premiums are increasing year over year at an unsustainable rate. Employees, as a result, are unable to afford the rising costs associated with healthcare. Brokers and consultants, who serve as the conduit between health plan administrators and employers, have to deliver the bad news to clients again and again. The healthcare landscape is shifting to a model where excessive payment and lack of transparency is the status quo. The industry is riddled with fraud, waste and abuse. But this is not what healthcare should be.
In an effort to do something about this paradigm shift and truly reclaim control of healthcare, many employers are turning to modern self-funded insurance models. With an innovative approach to self-funded benefits, we can get back to what healthcare should be—people managing their own healthcare decisions, efficiently controlling their costs and experiencing better health outcomes.
People before profits.
Before we discuss the solution, let’s unpack the issue. In the U.S. today, medical loss ratios (MLRs) restrict the amount that insurers can spend on operational expenses and require they spend 80-85 percent of premium revenues on claims activities. At their core, MLRs are designed to force insurers to overcharge for claims in order to maintain a profit. It’s no wonder Americans remain overwhelmed by the high cost and complicated process of claims billing.
That said, prices don’t have to be sky-high for providers to receive a fair-market reimbursement, and employers can decrease price tags on healthcare for both their organization and employees. This is where a reference-based pricing model for self-funding comes in.
When done correctly, reference-based pricing is a core component of a people-first health benefits strategy. This type of model provides employers and employees with lower and more accurate cost of care by leveraging an existing cost baseline (e.g. Medicare) to make a more educated and fair market payment. With this strategy, healthcare providers are still allotted a profit via a percentage interest. However, these profits are not as inflated as typically found amongst reimbursement models today.
A transparent, easy-to-navigate experience.
The healthcare industry touts the importance of giving us better access to care but aren’t arming consumers with the tools and education they need to do so. The truth is, the healthcare industry is nearly impossible to navigate. Consumers are often confused about where to go for care, what they truly get out of their benefits, what reasonable price points look like and which health plan design is right for their situation. When they’re confused, they avoid getting the care they need and employers’ healthcare costs continue to rise.
Employers must help their employees navigate the complex health system to deliver better outcomes and lower costs. To do so, employers must go beyond communication and market to their employees – it’s no longer enough to just tell them what they need to know. The right partner with access to the right tools can do just that, establishing the transparency and support employees so desperately need to navigate the healthcare system and their own health benefits. Employers need benefits partners who offer real-time communication support and robust tools that not only ensure a fluid user-experience but also maximizes transparency, so employees understand where to find the best quality health care for a low cost.
Holistic, always-on communication.
It’s no surprise that employees are poorly informed about their health benefits. Most health benefits plans only connect with employees during qualifying events such as on-boarding, open enrollment and major life changes. What consumers need is continual and simplified communication to make sure they are engaged and informed about their benefits as early and as accurately as possible.
For example, let’s say you have an employee who leads a somewhat sedentary lifestyle, primarily eats meals out and is overweight. By engaging with that employee throughout their employee lifecycle, from on-boarding, to onsite biometric screenings, to personalized nurse coaching, a pre-diabetic diagnosis can be caught early on.
Without a full understanding of your employees’ health and wellness history, employers run the risk of an untreated and unhealthy population that can significantly drive up the costs of benefits.
With an innovative and integrated approach to care in a self-funded model, employers can implement preventive care and frequent check-ins with employees to avoid future costs and improve health outcomes. Self-funded strategies allow the employer to essentially become the insurer and assume the responsibility and risk for employee claims, therefore making it in their best interest to help employees find their healthy and stay healthy.
We are in a defining moment when it comes to the future of healthcare in the U.S. By providing employees the tools and touchpoints necessary, employers can positively impact both their workforce’s health and wealth. If more employers could empower employees to take better care of their overall wellbeing and give them access to the best tools to do so, we as a nation could start to chip away at the broken healthcare system. Affordable, understandable and accessible: that’s what is truly empowering, people-friendly and what will help bring humans back to the forefront of the healthcare system. This is what healthcare should be.
Here’s how we’re arming brokers, consultants and employers with the tools needed to reclaim control of healthcare.