Status quo disrupted: Holding consultants accountable for rising health care costs

Mark Twain quipped that everybody talks about the weather but no one does anything about it. All too often, the same is true when it comes to health care benefits.

“Change is hard,” said Chris Cigarran, chief  commercial officer for Imagine360. “The data have been staring us in the face, but fear of the unknown is keeping us from doing anything. Because of that, a lot of us just cycle through the solutions that are out there, and generally, they are carrier solutions. As leaders, when do we get to the point where we say the risk of trying something new is much less than continuing with the status quo, which is clearly broken/?”

Cigarran moderated “Status Quo Disrupted: Balancing Health Plan Costs and Employee Satisfaction,” an April 26 webinar sponsored by Imagine360. He shared several statistics about the high cost of health care:

• Health care accounts for 19% of GDP.
• The annual cost is $8,346 per employee and is increasing every year.
• On average, commercial insurance plans pay 224% of Medicare rates for the same services.
• Many employees have become functionally uninsured.

“We are doing everything perfectly to get exactly these results,” Cigarran said. “And by the way, brace yourselves. Not only is winter coming eventually, but rate increases are coming. If you look at the popular literature right now, we are hearing 7%, 9% or even more than that this year.”

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Candace Jodice tackled those challenges when she was vice president of benefits for CVS Health. She explored options to drive members toward high-value, cost-efficient care and away from low-quality providers.

“When you start looking at these big increases, the bottom line is that there are a lot of great levers that have been out there for years that we go back to, but many of those levers are broken,” she said. “If you want to make meaningful changes, you have to be willing to do something that will actually change the way the system is functionally working.”

This change process taught Jodice several lessons. When determining goals and scope:

• Identify your plan goals and any pain points to be solved upfront.
• Work with consultants and brokers to evaluate the market.
• Understand what makes sense for your population.
• Evaluate options with current partners to determine if the strategy needs to be adjusted.

The lessons she learned for implementation and communication include:

• Use change-management resources to ensure that all stakeholders are educated and will help cascade messaging.
• Ensure that you have a continuous feedback loop in place.
• Establish oversight of the program and a governance process to monitor and track outcomes.
• Continue education beyond initial implementation or annual enrollment. People need support throughout the plan year.

“When employees see the data, it opens their eyes to say, `Holy cow, I could have made

a different decision,’” she said. “Even if it doesn’t affect their out-of-pocket cost, it affects the plan and ultimately affects cost in the long run.”

Finally, she learned the importance of gaining buy-in from leadership. Before seeking leadership approval, have your business case ready. Include migration assumptions, define how you will measure success and identify the length of time needed to determine success or the need to change directions.

“We needed to engage not only overall leadership of the company but also the local leadership in the markets where we were making those changes,” Jodice said. “We had the leaders say why it was so important that we were making this change and why they bought into it.”

Jodice and Cigarran agree that although change is not easy, it has become essential in today’s health care environment.

“Shop around to make sure you have a consultant or broker who understands that you are going to be the type of customer who is going to push the status quo and that you want them to be willing to do that with you,” Jodice said. “But you are not going to rely just on them. Also use industry groups such as the Business Group on Health and benchmark with other customers to find out what they are doing. This is important for holding your consultants accountable for `here is what’s going on in the marketplace.’”

Perhaps the most important step is overcoming inertia by realizing that change is not only desirable but possible.

“A dollar that’s going to benefits is a dollar that’s not going to wages or investment in the business,” Cigarran said. “Assuming that just because the national trend is 7%, that that’s OK and the business should just absorb it, is a belief we have had for a long time that is just not true. There are things that you can do.”