Large Employers Are Suiting Up to Fix Healthcare

The American healthcare system has unique financial hydraulics, a sophisticated and opaque “Game” that depends on self-insured employers to make and keep providers whole for the perceived “underfunding” by public payers like Medicaid and Medicare. Both doctors and hospitals are completely dependent on the financial margin derived from commercial insurance. RAND studies show that on average, private purchasers are paying approximately two and a half times more than Medicare rates for hospital care (even more relative to Medicare for hospital outpatient services).

The COVID-19 pandemic has only intensified this dynamic. Despite massive federal spending, employers fear that an overwhelmed health system may look to them to solve the financial pressures created by the pandemic — compressed financial margins, increased supply and labor costs, and greater intensity and complexity of care required by patients.

Large companies want and need the existing healthcare system to work. But to date, too many solutions to fix what’s broken have amounted to a version of MTV’s “Pimp My Ride.” We take a chassis and engine in bad shape and bolt advanced technology to a frame that is tired, old, and ineffective. Large employers are no longer willing to play this game or continue to extend blank checks to hospitals, doctors, health plans, and consultants with no regard for quality and proof of outcomes.

Drafting a New Team: Where Employers Are Heading

Many of the top U.S. corporations, including Disney, Walmart and Boeing, are partnering with private organizations and non-profits to start new enterprises aimed at changing the rules of the game by leveraging their vast buying power to attack inefficiency. Rather than a “Pimp My Ride” approach, they’re increasingly thinking about how to create a new, high-functioning vehicle by pushing fundamental changes in the way clinical services are conceived, priced, and delivered in five broad areas.

Setting Standards and Buying Into Them

Increasingly, large, self-insured employers are focused on working with entities that meet their standards for quality and service and are open to meaningful measurement of their performance. We will see more companies move away from one-size-fits-all arrangements with large health systems and health plans that continue business-as-usual. And they will work with providers willing to move away from the fee-for-service system (to which employers recognize they have contributed), which doesn’t allow for the kind of care they know will keep their employees healthy. Some large companies are making a firm commitment to change payment within 3 years so that integrated care focused on health outcomes and wellbeing can flourish.

Resisting Provider and Payor Consolidation

Large employers will continue to scrutinize further consolidation in the healthcare system, despite the unfounded argument that it is somehow better for the consumer. And they’ll push for limits on anti-competitive business practices that have needlessly and intentionally increased costs, using the Sutter Health lawsuit as a template.

Disciplined Purchasing of Digital Disruptors

As enormous sums of money continue to pour into so-called “digital disruptors,” large employers want to know which solutions actually do what they claim, and they are turning to outside organizations to help them deal with the onslaught of sales pitches and to assess new companies with clinical rigor and outcomes data. These evaluations will help large companies make buying decisions.

Holding Intermediaries to Account

Large employers are also more aggressively holding industry middlemen they hire to fight for them and their employees accountable for performance on costs and quality, whether they be consultants, health plans, or pharmacy benefit managers. The historically unmet expectations of employers that their vendors be transparent about how their money is spent will transform with the fiduciary requirements of the Consolidated Appropriations Act of 2021 and as self-insured employers face new obligations to demonstrate the value of the services they buy.

Targeted Public Policy Initiatives

Finally, with support from skilled coalitions, large, self-insured employers are more vigilant in looking for policy solutions where the market has failed. This has been the route to success in advocating for an end to surprise billing, demand for hospital price transparency, and provisions in the Balanced Budget Act to extend negotiated pharmacy discounts to commercial payors.

In the end, failing to take bold action to fix healthcare and change the “Game” employers fund while others profit is now a greater threat to their business and their employees than continuing along the current path. But even the largest employers know they cannot change the system alone. The way to get it done is to increase their firepower by joining together with other private and public purchasers to put pressure on the healthcare system to improve its performance. The “Game” has to change, and many of this country’s largest employers are taking bold steps to do just that.

Elizabeth Mitchell is CEO of Purchaser Business Group on Health, a member coalition of some of the largest employers in the U.S. Ian Morrison, PhD, is an internationally known author, consultant, and futurist specializing in long-term forecasting and planning with particular emphasis on healthcare and the changing business environment.

Disclosures

Morrison has for decades been a paid speaker and advisor to many parts of the healthcare ecosystem including hospitals and health systems, health plans, employers, and pharmaceutical and medical technology companies. He is currently a Board member of the independent non-profit Martin Luther King Community Health System in Los Angeles, a senior advisor to Leavitt Partners, a member of the Founders Council of the United States of Care, and a senior advisor to Concord Health Partners, a private equity firm.

Note: This article have been indexed to our site. We do not claim legitimacy, ownership or copyright of any of the content above. To see the article at original source Click Here

Related Posts
Baby naps: Daytime sleep tips thumbnail

Baby naps: Daytime sleep tips

Baby naps can be a restful time for you and your little one — but the process of getting your baby to sleep during the day can be just the opposite. Consider these tips for helping your baby get the daytime rest he or she needs. How many naps a day does a baby need?…
Read More
Young people were hospitalized following the use of "Nice Guy" mixed with anticoagulants thumbnail

Young people were hospitalized following the use of “Nice Guy” mixed with anticoagulants

בעקבות אשפוזים של צעירים במהלך סוף השבוע בחשד להרעלה בעקבות שימוש בסם מסוג "נייס גאי", נפתחה בדיקה וחקירה משותפת למשטרת ישראל, אגף האכיפה וחטיבת הרפואה במשרד הבריאות וכן עודכנו כל חדרי המיון בישראל בהתאם. המשטרה עצרה שני חשודים באספקת החומרים המסוכנים. 12 צעירים אושפזו וחלקם מאושפזים עדיין בבתי חולים באזור הצפון, לאחר שככל הנראה עשו…
Read More
Index Of News
Consider making some contribution to keep us going. We are donation based team who works to bring the best content to the readers. Every donation matters.
Donate Now

Subscription Form

Liking our Index Of News so far? Would you like to subscribe to receive news updates daily?

Total
0
Share