The cost of healthcare in the United States is rapidly rising with no end in sight, and this problem is hitting the American worker’s pocket in a more profound way than ever in history. Healthcare in the U.S. is now at 18% of US GDP at a cost of over $10,000 per person annually. To put this into perspective, healthcare costs in 1960 were 5% of U.S. GDP ($170/person).
Here’s what not everyone knows: on the other side of this problem of rising healthcare costs are pockets of people effecting serious change—these people are employers.
Forward thinking employers and the HR leaders responsible for making their healthcare decisions are thinking outside of the box to find health care models that are more effective at keeping employees healthy. These are people who are rejecting the traditional benefits model of disjointed, piecemeal solutions. Instead, these employers are using data to form a comprehensive strategy to ensure their healthcare dollars are keeping members healthy.
Consider the following developments in 2018 alone as an indication of the trends we’re seeing in the employer market:
· Solution Scale: Amazon, Berkshire Hathaway and JPMorgan Chase announced in early 2018 their formation of a healthcare alliance to tackle finding more effective care models for their combined employee base of 1.2 million people.
· Accountability: The National Drug Purchasing Coalition (NDPC), whose members include employers like PepsiCo and ExxonMobil, has partnered with Express Scripts to form a fully-transparent model where the NDPC pays what Express Scripts pays for prescription drugs. In turn, Express Scripts will administer a pay-for-performance clinical care model that shifts the financial risk previously borne by employers onto the prescription drug plan administrator.
· Emphasis on Health Outcomes: GM announced a deal with the Detroit-based hospital system Henry Ford Health System for a direct contracting healthcare model for its 24,000 employees and family members
· Using Data to Guide Health Strategy: Morgan Stanley recently announced that they have created a chief medical officer role to oversee their use of HR data and analytics. Said CHRO Jeff Brodsky, “Harnessing our HR data, we can achieve better wellness for our employees and address rising healthcare costs.”
· Making Healthcare Easier for Employees: Amazon and Apple have joined the 30% of employers that offer onsite medical clinics for employees and their families.
If your company is looking to help to effect change in this healthcare revolution, here are a few ways to start:
1. Shift financial risk. Seek partners who are willing to step outside of the traditional fee-for-service healthcare models that currently put the highest financial risk on the employer (and in turn, employees). Instead, shift financial risk to care providers and other partners who directly impact health outcomes. Direct primary care is a great example of this type of accountable care model.
2. Gain data transparency. Get access to timely and ongoing data to drive your healthcare benefit decisions. It is easy to get inundated by mountains of complex data and trying to aggregate it with location and other benefits data, so we recommend that employers assign a strategic data subject matter expert to drive the discussion. This is what the team at BetaXAnalytics does—as data scientists with clinical, pharmacy and wellness expertise, our deep-dive into employer data is more comprehensive than any data platform on the market today.
3. Remove barriers. Think about ways to remove the barriers that prevent employees and their families from getting the care that they need—the financial barriers, the time constraints and convenience barriers. Onsite clinics and telemedicine are just a couple of examples of strategies to make healthcare convenient and inexpensive for employees.
“Employers taking healthcare into their own hands is the most meaningful way we can change healthcare in this country,” Bret Jackson, president of The Economic Alliance for Michigan, a member of the National Alliance of Healthcare Purchaser Coalitions
This week we presented at the Strategic HR Conference at Mount Washington with CHROs and HR leaders throughout the Northeast to share best practices on how HR leaders can use data to drive their health and benefits strategy in a way that maximizes their healthcare budget. If you’re interested in learning more, email me.
Who pays for healthcare in the U.S.? We all do. By way of taxes and out of pocket premiums, we pay for the costs that flow largely through the government and employers. And the more informed the people are who are paying for healthcare, the more we can effect change.
—Shannon Shallcross, Co-Founder of BetaXAnalytics
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If you're an employer who feels there's got to be a better way to control health care costs, you're on to something. And we can help. BetaXAnalytics partners with employers to use the power of their health data "for good” to improve the cost and quality of their health care. By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, to save health dollars and to better target health interventions to keep employees well. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.