'Change isn't easy, but we have no choice': NAHU Convention Coverage
The discussion at this year's meeting focused on affordability solutions and the changing role of brokers.
The soaring cost of health care, cost-containment strategies and the fast-changing role of brokers spurred lively discussion and outside-the-box thinking. One thing everyone agreed on is that the current economic trajectory is unsustainable.
“The cost of health care is increasing astronomical,” said Daniel Meylan, national sales director for Allied National in Overland Park, Kansas. “In 2010, the average American family spent about $18,000 a year on health care. By 2017, that number was $27,000. If you take those two numbers and project them out to 2022, we’re going to spend $33,000 a year on health care per family in the United States. Does anybody believe that is sustainable?”
Countless experts have crunched numbers to try to define affordable health care, but Meylan has a practical answer. “The definition I heard from my mother is, `I can buy health insurance and still buy groceries’,” he said. “That means it has to fit in the budget of the American family. How are we going to achieve affordable health care?”
David Contorno, president of Lake Norman Benefits in Mooresville, North Carolina, asked the same question. “I think everyone in the industry agrees that health insurance is expensive because health insurance is expensive,” he said. “It’s the No. 1 underlying cost. The No. 1 thing our clients want is to control that cost, and it’s probably the No. 1 thing we fail at as an industry. Very few of us know how health care is paid for, so how can we possibly fulfill our duty to our clients?
“There is a line in the sand,” Contorno added. “On one side of that line are the people who are hurt by rising costs, the employer and the employee. On the other side of the line are people who are helped by rising costs, and that is everyone else in the health care continuum.”
Christopher Yarn, managing partner of WalkOnClinic in Winter Park, Florida, asked the question that is on everyone’s mind: “What the heck can you do when you go to work every day to influence people and change things?”
Creative thinking
The long-term answer to this question may include redefining not only health insurance, but the relationships among brokers, employers, consumers, carriers and providers. Attendees and speakers presented several promising ideas.
Level-funded plans. Mehlen’s colleague at Allied National, CEO Bill Ashley, believes level-funded plans can provide a better pathway to the consumption of care. “These plans provide an alternative for employers to provide health care in a more cost-effective manner,” he said. “By itself, level-funding does not address the health care cost problem, but it is part of the solution to the affordability problem, because it’s a way of financing those costs.”
Direct pay. Dr. Josh Umbher of Atlas MD in Wichita, Kansas is a nationally recognized authority on health care that is paid directly by the consumer. He understood the irony of being a presenter. “It may seem odd for an insurance-free clinic to be speaking at an insurance event,” he said. “Some people may assume we are anti-insurance, but the message we try to deliver is that we are pro-efficiency. We want health insurance, but we want it to work better and be more affordable.
“We have been putting the cart ahead of the horse for a long time by trying to pay for health care with health insurance,” he said. “The assumption was always made that that was the best and most -efficient way. But we don’t have car insurance that pays for gasoline, so why have health insurance that pays for medicine? “
Atlas MD members pay a monthly fee that ranges from $10 for children to $100 for adults ages 65 and older. They receive unlimited home, work and office visits, as well as telemedicine. Any procedure done in the office is free of charge, with no copays, and the practice recently added wholesale pharmaceuticals.
“There can be up to 95 percent savings,” Umbher said. “In one example, we provided a patient with breast cancer her chemotherapy medication for 99 percent less than she was quoted at the pharmacy with her insurance. She went from name-brand retail to generic wholesale and from $600 to $6 a month.”
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Dr. Sean Kelley follows a similar model at Texas Free Market Surgery in West Lake Hills, Texas. “We address the inexplicably high cost of surgery,” he said. “It doesn’t have to cost that much. Most of our clients save between 40 percent and 50 percent.”
Value-based insurance. “Since I went to a performance-based compensation model, my average revenue per client is up 22 percent,” Contorno said. “Our average reduction in employer cost by implementing these value-based programs is 47.5 percent from the prior year. The worst we have seen is a 21 percent reduction and the best is 59.8 percent. We typically see another 10 percent to 20 percent in year two and then a 0 to 3 percent trend. Except in pharmacy, I can absolutely guarantee that.”
Reference-based pricing. “How does reference-based pricing help?” asked Jon Jablon, director of provider relations for The Phia Group in Braintree, Massachusetts. “First, it reduces cost to the plan and members. If the plan is paying less, the members can pay less. Payers are able to provide more cost-effective care to members by virtue of paying less for medical care.
“It virtually eliminates medical trend increases. If all the hospitals in a given area decide to raise pricing, if you are using reference-based pricing, you are using Medicare rates. So if rates increase, the amount you are paying does not necessarily increase. Prices are based on something the plan has deemed objectively reasonable,” Jablon said.
Changing role of brokers
Where these innovations ultimately will lead is anyone’s guess. However, everyone agrees that brokers who fail to adapt will be left in the dust.
“Your competitor in the next five to seven years won’t be the person sitting at the table with you; it will be affordability,” Mehlen said. “At what point does the employer say, `No more plan’? At what point does the employee say, `Take me off the plan”? At what point do you as a broker run out of affordable solutions for your clients?”
The encouraging news is that although the role of brokers is in flux, brokers are more valuable than ever. “You have to realize that you are probably ten times more influential than you think,” Yarn said. “You’re the expert when it comes to health care. What I see in the marketplace is a massive shift between brokers who are delivering products and selling products one way and brokers who are taking a role in supply-side health care chain management. There is a major shift in how successful brokers in the marketplace are positioning themselves.”
Contorno agreed, adding, “”There is not a single professional who touches an employer’s company as holistically, deeply and thoroughly financially as we do. We have a tremendous responsibility that we have been deferring to other people who are damaging the system. That responsibility also creates a huge opportunity to impact the financial well-being of the company, the financial well-being of every employee and their families, and physical outcomes,” he said. “Don’t take that responsibility lightly. Stop just taking what you have been given. Start asking questions, and start doing things differently.”
Brokers must think of themselves as educators, not simply vendors, Yarn said. “You can choose how you want to consult and advise your clients. The question is, do you want to help the people you sell insurance to? Do you know how to leverage the position you are in to help them? The things you can influence come down to educating the client and the end-user, but you have to educate yourself first,” he continued. “You have to understand how the system works and why it works that way. How much time are you spending ensuring that the employer understands the same things you do? You know 20 times more than the CFO you are working with about health insurance. How much time are you spending educating that employer and their employees?”
Looking ahead
David Berman of Assured Partners in Indianapolis has been a broker for 46 years. He looks at the brave new world of health care not as a threat, but as an opportunity.
“Our principle job is to find solutions for our clients,” he said. “In today’s environment, that has to have something to do with costs. We live in a world where we’re being told what will be available in plans for clients, so what we have to be concerned with is cost for clients to provide insurance to their employees. Change is not easy, but we have no choice. We can continue to do things the way we did in the past and lose, or we can plan to change the way we provide our services to our clients and prospects and win.”