The ongoing search for the triple aim 

A full 50 years after the advent of managed care, and more than 20 years since consumerism design was introduced, benefits professionals find themselves in an all too familiar place. Rising health care costs, lackluster outcomes, and plan member frustrations all remain stubborn obstacles that refuse to budge.

Worse yet, recent economic conditions have exacerbated the most weighty issues impacting  health care: high inflation, a tight labor market, rising interest rates, the rising cost of care, provider contraction, and inequitable access to care.

Consider these unwelcome data points:

• Health care spending now accounts for 17.8% of the U.S. gross domestic product, almost twice as much as other nations in the highly industrialized world.
• Among these countries, the U.S. has the lowest life expectancies at birth, the highest death rates for avoidable or treatable conditions, and the highest maternal and infant mortality rates.
• What’s more: the average Net Promoter Score for health care organizations in the U.S. is a measly 58, far below many organizations in other industries 

Of course, there’s no magic bullet when thinking through these challenges, but most industry experts have determined that a series of strategically placed interventions that are highly customized, thoughtfully executed, and carefully measured will provide the greatest chance of achieving success. 

Much as an individual investor needs to build a financial portfolio reflecting their objectives, organizations today must consider a number of solutions and build the right blend from among the broad ecosystem. This process involves identifying and incorporating new solutions that evolve the entire portfolio. 

For example, there are a growing number of new strategies and strategies that are showing encouraging early results, including health payment accounts,interest-free line of credit plan members can use to pay out-of-pocket medical, dental, vision, pharmacy, mental health, and vet care with flexible repayment terms via payroll deductions or a linked bank account. Here, we’ll explore how each element of the triple aim is effectively and efficiently impacted.

Cost trend mitigation

Recent data shows that 57% of Americans cannot afford an unexpected $1,000 emergency expense. It’s a startling number, considering the ongoing annual increases in deductibles and out-of-pocket maximum amounts for many employer-sponsored health care plans. Further, a recent survey found that 68% of U.S. employees feel challenged in getting the health care they need, with the most common challenge cited being able to afford health care expenses that weren’t covered by insurance.  

For plan sponsors that offer multiple health plan options, this dynamic can drive members at all utilization levels to lower deductible, richer plan designs – driving costs upward for both employer and employee. Providing interest-free credit for out-of-pocket expenses, however, can alleviate those concerns and influence employees to migrate towards more appropriate, cost-effective plans.

Better health outcomes

The linkage between timely access to care and better health outcomes is fairly self-evident. Appropriate action on acute conditions plays a key role in preventing chronic and catastrophic conditions in the future. Yet an astonishing 38% of Americans say that they or a loved one delayed care in 2022 because of cost concerns. 

With American medical debt approaching $200 billion, delayed care and medication non-adherence have outsized impacts for patients with a variety of conditions (e.g., diabetes, musculoskeletal, heart disease, mental health, etc.). Risks of hospitalization increase and, more concerningly, so do deaths.

Consider also that of the 1 in 7 adults who delayed or were denied an elective procedure during the COVID pandemic, 54% reported negative health consequences as a result. Beyond the raw data, common sense dictates that putting off care is a choice that puts both employees’ health and productivity at risk.

A health payment account can help free up needed liquidity for plan members to obtain the right care at the right time, even if it’s before payday – allowing for better outcomes while simultaneously bending the employer cost curve.

Greater member satisfaction

As access to credit becomes increasingly more expensive in today’s economic climate, the benefit of interest-free funds with flexible repayment terms is another self-evident feature worth consideration. This is true regardless of the individual plan member’s level of financial sophistication or overall access to liquidity. In fact, the most financially literate employees will best appreciate the value of interest-free funds as bank rates continue to rise.

From a financial wellness perspective, health payment accounts impact the Total Rewards value proposition, allowing employees with health savings accounts the flexibility to keep more money invested in their HSAs longer. 

And, at the end of the day, all employees gain greater flexibility to save in other retirement vehicles.

Increase employee engagement and productivity

Countless studies have demonstrated that reducing employees’ financial burdens reduces employee absenteeism. Productivity increases, and overall engagement is lifted when straightforward, user-friendly solutions are offered to alleviate stressful financial issues.

It is also worth noting that underrepresented populations are 10% to 15% more likely to carry high-interest medical debt than others and lower-income households, women, and younger generations are less likely than their counterparts to pay for emergency expenses out of their savings. As a credit-check free, no interest option, HPAs are helping pave the path toward stronger health equity for the employees who need it most. 

Conclusion

The quest for a triple aim remains elusive. There is no magic bullet. A successful benefits strategy involves a number of thoughtfully crafted approaches. There are, however, potential quick wins that impact the broader equation and promise immediate value.

Dan Bernstein is a strategic advisor. He has decades of employee benefit advisory leadership, and served as a partner at Mercer.