The start of something big
More than ever before, benefits advisors will be called on for answers and need to deliver tough truths.
This autumn is shaping up to be one of the most momentous open enrollment/annual renewal cycles that any benefits professional has ever seen.
Already, the post-COVID-19 predictions are shaking up the marketplace. One widely publicized report by Covered California predicts insurance premiums could increase by up to 40 percent next year. Those numbers sound terrifying for businesses already grappling with what could be an extended macroeconomic slowdown.
In truth, I believe those predictions are likely to be overblown. As I write this in early April, we don’t know how the path of the disease will progress or whether the many steps governments are taking to “flatten the curve” will work in controlling its spread.
Related: 5 ways benefits consultants can become more valuable during trying times
At the same time, we are seeing signs that overall health care spending might not rise that much this year. This belief is evidenced by the fact that patient inflows at many hospitals outside of the virus hotspots have slowed due to people fearing entering environments where the disease may be present. Similarly, primary care and family physicians from Little Rock to Los Angeles are being forced to cut staff, skip payrolls and plead for loans as patients skip visits in droves and most elective procedures are canceled. This could actually have a positive impact on health outcomes; after all, many elective procedures are high-dollar but low-value, rendering them useless or harmful anyway.
Another thing to keep in mind is that not every organization will be equally hit by these events. Organizations with a younger, healthier workforce that didn’t hesitate to social distance will likely have fewer coronavirus claims than organizations with an older workforce that either chose to keep their brick-and-mortar office open or were considered essential.
In the end, it’s plausible that net claims could actually go down in all this, not up. We’ve known for a long time that at least 30 percent of high-cost procedures are inappropriate. Almost all of those aren’t happening now and likely won’t happen for a full quarter. In fact, some will never happen.
Regardless, this is the uncertain situation into which benefits advisors are stepping. More than ever before, they will be called on for answers and need to deliver tough truths. It won’t be easy.
Business owners have been dealing with exploding health insurance costs for years, but nothing has prepared them to deal with the price increases they’re hearing about right now. Employers, many of whom have had to lay off employees in the age of social distancing, are going to be very motivated to change. They’re going to have significantly less financial flexibility. They are going to scrutinize every cost, and they’re going to do their research on alternatives. They’re going to ask their broker why they’re paying so much for health benefits their employees aren’t even that happy with. They’re going to want to know if their broker is making a commission or bonus by keeping them on that plan, and also why that money isn’t staying in their own pockets.
Some benefits professionals are going to have to make significant changes if they want to be successful. First, they’ll have to be transparent by disclosing commissions. Second, they’ll have to exercise extreme diligence in designing coverage that incentivizes beneficiaries to choose high-quality, lower-cost providers. That’s where the real savings are. It’s also where health care structure comes into this conversation.
Fee-for-service is a concept that has refused to die. In it, physicians got paid for each individual thing they did, and if they didn’t have patients repeatedly coming in, they couldn’t make money. That’s not how health care is supposed to work. There’s no well-functioning health care system in the world not built on a foundation of value-based primary care. And a large part of the reason why the pandemic had such a negative impact on the United States is because its health care system isn’t organized in this way; patients skipped valuable, less intensive and less expensive care settings that could have helped them recover from home and slow the spread.
Thirteen Italian clinicians said it best in the NEJM Catalyst Innovations in Care Delivery, writing: “Hospitals might be the main COVID-19 carriers, as they are rapidly populated by infected patients, facilitating transmission to uninfected patients … Pandemic solutions are required for the entire population, not only for hospitals.” [emphasis in original]
Soon, our health care system will change. Clinicians are bravely putting their lives on the line during the COVID-19 crisis. Meanwhile, in aggregate, clinicians only received $0.27 of every dollar ostensibly spent on health care. Sadly, in many cases, the executives benefitting from the other $0.73 are failing to keep clinicians safe, and they are taking note. They will push for reform. After some much-needed rest, they will emerge from battle with a determination for change and a deep unwillingness to return to the status quo ante; and the people they save, employees and employers alike, will undoubtedly support them.
This is all the more reason for benefits advisors to demonstrate value now. By seeking out the physicians who have broken away from fee-for-service so they can to do the lifesaving, rewarding work they signed up for—many in direct primary care models—benefits advisors will be aligning themselves with what will be an overarching goal for the year ahead: Creating a higher-quality system that supports health care heroes and doesn’t bankrupt businesses.
Some advisors have already done this. Starting with value-based primary care and including but not limited to transparent open networks and transparent pharmacy benefits, they’ve helped their clients use their health care savings to weather our most recent storm.
One company I know about was unfortunately forced to furlough employees because of stay-at-home orders, but in an unprecedented, admirable way was able to use previously squandered health care dollars to continue to pay for those individuals’ medical expenses.
That right there is what every advisor should strive toward: freeing up so much money in their client’s health care budget they enable them to positively change—if not altogether save—lives. It may have taken a crisis to help them realize it, but benefits professionals have that power. They have the tools at their disposal. Health care has already been fixed. Advisors must simply replicate those fixes.
Dave Chase is co-founder of Health Rosetta, which aims to accelerate the adoption of simple, practical, nonpartisan fixes to the U.S. health care system, and author of “The CEO’s Guide to Restoring the American Dream.”
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