All Employers are in the Business of Health Care
Washington Health Alliance Executive Director Nancy Giunto led a panel discussion on the role of employers in health care reform at the recent virtual State of Reform conference. The discussion included the challenges facing small businesses, the need for access to health care data to support making purchasing decisions, and the challenges facing employers and employees. Giunto recognized that “There are still too many employers who don’t understand that whether they are in the business of health care or not, they are in the business of health care because they spend an incredible amount on coverage and other things related to the health of their employees.”
Rick Abbott, founder and Chief Executive Officer of Lyn Health, a new health care company supporting patients with multiple chronic conditions, said, the amount of power employers have to influence the health care delivery is “unprecedented,” but acknowledged it is “very difficult terrain” for small employers because they are at a significant disadvantage. “One of the things that will be critically important in the coming years is figuring out how to take the leadership position from so many employers in the Washington state market that are large and be able to take some of that benefit and disperse it across employers of all sizes, small, medium, and large.”
Washington State Director of the National Federation of Independent Businesses (NFIB) Patrick Connor agreed. The NFIB represents more than 7,000 small-business owners in Washington state. Connor acknowledged that big employers have “a lot of opportunities to be directly involved in reform and to take a lot of health care needs for yourself and your workers into your own hands.” But for small employers, “it is hard to have any kind of market power, when you are purchasing a policy individually or for a family as opposed to being able to bundle hundreds or thousands of covered lives.”
President of Healthcare Management Administrators Lindsey Harris said size has no bearing on one problem facing employers, the cost of health care is increasing faster than their budgets. “All of the health care reform that we’ve had has really made a difference on access to care. We’ve certainly seen enhanced coverage for things like mental health, expanded eligibility so that more people are covered, but what reform hasn’t done is really have an impact on cost for them. So those employers have faced ever-increasing costs year after year that is quite unaffordable for them.”
Giunto said one of the hurdles employers have is understanding that cost and quality are highly variable and “if we could implement value-based benefit design more broadly, rather than simply agreeing the concept is a good idea, it would be terrific.” Unfortunately, understanding value is heavily dependent on size and whether they are self-insured with access to data, according to Harris. “If you ask any self-insured customer that we work with, do they have a perspective on where is it expensive to seek care and where is there higher value, they generally do have a perspective on that, they know where their members want to seek care, they know where things cost more—they understand some of the dynamics of those types of things, but that’s because they have access to more data.”
On the question of which is the higher priority for health care consumers, choice or cost, Connor said, “It’s a difficult balancing act, but I think ultimately cost has continued to the overwhelming driver of health insurance purchasing decisions both on the employer and individual level and will continue to be so for the foreseeable future.”