jump to navigation

A Dangerous Exchange in Healthcare October 3, 2012

Posted by medvision in Uncategorized.

Why private insurance exchanges utilizing an employer-defined contribution will NOT lower healthcare costs nor promote health.

Recently, a big announcement concerning a private insurance exchange was made.  AonHewitt’s exchange will feature five different national managed care organizations with multiple healthcare choices for employees of organizations sponsoring this plan.  A full story regarding this exchange is at Modern Healthcare’s website: http://tinyurl.com/97bjqef.

Notably, Orlando-based Darden Restaurants and Sears Holding Company are among the first large employers to “jump in.”  From a political perspective, the right seems very happy, as they believe a prior exchange is far superior to the ones mandated in 2014 under ObamaCare.  The left, however, is wishing they’d waited until 2014.

I’m fairly confident this model will not work, as it will increase member population care fragmentation,  eliminate workplace wellness initiatives, accelerate chronic disease, and increase cost while sequentially lowering employee productivity.  Let me illustrate:

(1)    Direction in darkness: A total lack of clear information concerning pricing, quality and best health outcomes is not choice – it’s chaos!  Just look at your own health plan’s website and go to the tool purported to provide price transparency and quality.  If you’re not versed in insurance terminology and coding, then it’s going to be challenging for you to navigate.

For example, imagine you’ve just returned from the local hospital emergency department with a torn Achilles tendon.  Your leg is immobilized, taped and your instructions are to find an orthopedic surgeon to repair your injury in the outpatient surgery setting.  Which CPT codes will describe the procedures necessary to repair your ankle? How do you identify the surgeon who has performed the most procedures successfully? Okay, now you cave in and call your insurance plan’s nurse call line. Maybe this is too serious a condition so substitute anything else that comes to mind. This is complex stuff.

(2)    Risks in the workplace:  Let’s consider the restaurant worksite setting.  Most of individuals covered will be younger and likely work 8 to 10 hours on their feet per day.  In turn, musculoskeletal issues, specifically back and neck pain, will be a large percentage of both healthcare costs and workers’ compensation costs.  Younger people will also make less money and will likely be attracted to the lowest premium plans, probably high-deductible plan designs.  Back pain literally has hundreds of various treatment options including fusion disc surgery, minimally invasive surgery, MRI plus physical therapy, chiropractic and multiple other options including combinations of all the above.  Again, too many choices in the darkness.

(3)    Loss of fellowship: How do teams accomplish goals in the work setting? One thing definite is they know their contribution’s impact to the attainment of a common goal. One of the reasons successful wellness programs have such an impact on member health is members/employees look out and assist each other. Now, under this private exchange program, no two employees have the same benefits package. Back to the restaurant work setting, how would the team perform if they all could come to work at different times regardless of guest volume?  What if they can pick their own days off without any coordination from management?

With this in mind, how does it seem logical to give exactly the same contribution to members possibly suffering from multiple stages of differing diseases or conditions? Who will pay when a diabetic fails to take needed medication and ends up in the intensive care unit suffering from a diabetic coma? One may think if the product is fully-insured the insurance company pays; however, large claims always seem to come back in higher premiums at renewal.

Pitfalls of exchanges

Exchanges are essentially telling employers to “wash your hands of the benefits administration, member communications, contribute “X” dollars, and allow your employees to make their own choices.”  Sorry, as they say in the south, “this dog won’t hunt.”  The idea of sick/hurt members being true consumers with the same behaviors exhibited while purchasing a car or a computer is a fallacy.  Patients enter a complex marketplace often in a very involuntary manner.  Financial and personal costs are higher in healthcare, with greater risks than in any other consumer marketplace. (See this article discussing Why Patients are Not Consumers: http://tinyurl.com/3fk5w5q).

In sum, it’s easy to understand attractiveness to employers of dumping responsibility pertaining to their employer sponsored health plans.  But employee health is a corporate asset necessary to provide the best service to customers.  When employers stop caring about the health and wellness of employees – all sides lose.  Employees lose the time and opportunity to improve their health and business loses customer focus and competitive advantage.



No comments yet — be the first.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: