Employer-based health insurance was the answer to a perfect storm of post-World War II problems. A clever scheme to circumvent wage freezes and labor shortages gained a political foothold that has been nearly impossible to dislodge.
For employers and employees alike, the mid-20th century model has become too costly, too rigid, and too confusing for today’s consumer-driven economy.
The Covid-19 crisis will force hard economic choices. How can we provide health benefits and still defend the bottom line? How can we attract and retain good employees? How can we improve employee healthcare? The pandemic has created a new sense of urgency, but these health insurance questions have existed for decades.
The status quo is not OK. Healthcare operates by its own rules. There is virtually no other industry so removed from the power of the marketplace and the control of the consumer. Employers and employees have been caught in an unnecessarily adversarial fight over who will pay exorbitant costs. In many ways, we have fundamentally lost sight of the purpose of insurance and the role of consumers in making informed choices about how they obtain and pay for care.
This is not employers’ fault. Poor insurance design has forced employers to choose between meeting budgets and providing an expensive benefit to employees.
This is not employees’ fault. They have been forced to surrender control over their own healthcare decisions, and in the process have lost the consumer power that drives product improvements and lower costs in most other industries.
It’s time to change the equation and build health insurance around the idea that employers and employees have a common goal: a great benefit that controls costs and provides a choice among providers of high-quality care. We need a new plan design that creates an intuitive fit between people’s health insurance and the way they actually use healthcare.
Highlighting Clear Treatment Paths
Nearly overnight, Covid-19 brought extreme focus to one specific condition. We have seen the entire industry stand up to the challenge, delivering care with compassion; relieving cost barriers; and adapting to new practices in telemedicine, testing, and treatment with imagination and discipline.
When the crisis abates, which it will, we must apply the same condition-based approach to all of healthcare. Imagine reducing costs by design, not just happenstance, or providing incentives that reward employees for following established standards of care. That would fundamentally change the employee/consumer experience of care for everyday conditions that affect millions of people—diabetes and hypertension, heart conditions and joint pain, pregnancy, and wellness care.
Eliminating the Deductible
Covid-19 forced many insurers to modify their plans to ensure compliance with federal mandates that eliminated cost barriers to getting tested or evaluated for the disease. Without these mandates, many employees would have been required to pay for those tests and evaluations until they hit their deductible. It was clear that relief from deductibles was essential to the public policy aim to allow unfettered access to testing and treatment protocols for the greater good.
Why can’t the same logic apply across all conditions—not just infectious diseases? Look at diabetes. Cancer. Early-stage kidney disease. Do we really want employees to avoid care due to fear of cost? When these diseases are caught early and managed well, we can slow or prevent their escalation to later stages where quality of life declines, morbidity rates increase, and the cost of care rises dramatically.
Using Value as the New Cost-Sharing Mechanism
Artificial intelligence and medical research are unlocking tremendous opportunities to reduce the cost and improve the quality of healthcare. We have ever-growing datasets to analyze and pinpoint which treatments are the most effective and efficient for a wide range of conditions.
With that knowledge, we have the ability to change how employers and employees share in both costs and benefits value. When employees see their treatment options in advance of care, they also have the option to choose more effective and efficient treatments, lowering costs for both parties.
A health insurance plan that provides choice with incentives for following clinically proven standards of care empowers employees to change consumer behavior. They become informed consumers of healthcare with greater potential to choose more effective and efficient treatments.
Changing Where We Seek Care
Out of the Covid-19 crisis has come another long-sought innovation: Consumers are utilizing telehealth and remote-care tools at a higher rate, such as online symptom checkers and virtual visits. There is no going back. A study from the University of California San Francisco found that before Covid-19, 2 percent of UCSF’s visits were virtual. Now, well over half are, and researchers don’t see the trend reversing when the pandemic is over.
Mental and behavioral healthcare are other areas innovating in light of the current crisis. Though changing, the perception is that these services have historically been fragmented and difficult to access. Telehealth and virtual visits have unlocked counseling and treatment opportunities to meet a wide variety of needs.
Better Design Is Possible
As you evaluate plan designs for 2021, will you continue to provide incentives to encourage employees to try virtual care before going to a clinic? Will your plan provide choices and guide employees to effective, efficient care?
The risk of maintaining the status quo is much greater now. Better plan design enables people to get the care they need in the right place, at the right time, at the right price. We can’t go back to how things used to be. The way forward is a health plan that provides benefits to both employers and employees.
Jodi Hubler is president of Bind and believes innovation and certainty are the keys to insurance design. A veteran healthcare executive, investor, and former CHRO, she has a unique perspective on what makes good business, good policy, and high-quality employee benefit programs.