Data Driven Healthcare Solutions for Employers
We all know the problems. Rising costs despite declining value. Overutilization. Inadequate and impersonalized access. Lack of marketplace transparency.
Employers are getting priced out of the market, employees are paying a huge portion of their take home pay on healthcare, and yet value is low.
Pardon the pragmatism, but we aren’t going to tweak the current, broken model and make it successful. It’s time for a total reset.
Whether due to legal obligation (large businesses), or due to the need to attract high value employees (small businesses), employers are pretty much forced into providing healthcare benefits. In fact, healthcare benefits are the second largest business expense for many employers.
Whether you like it or not, you are in the healthcare business. Employer-sponsored healthcare is the norm for people of working age. Why not redefine how it’s done? It’s broken, so let’s fix it. Together.
Rising costs despite declining value.
The current system is out of control. There are so many fingers in the pie it is downright absurd. Healthcare is a huge industry. If you’re a vendor, supplier, or service provider, you can make a lot of money by having your finger in the pie of an industry that is highly regulated and mandatory. And that’s exactly what’s happening.
Employers are forced to provide compliant health insurance policies for their employees. Those policies are outrageously expensive and cost the employee a lot to use (copays, deductibles, and coinsurance). Yet, despite all the money being thrown at it, the value people derive from healthcare services is on the decline, according to the Commonwealth Fund and the Kaiser Family Foundation.
We have a lot of expensive technology, and we’ve got the highest cost healthcare system in the world, but Americans are very unhealthy, with a lower life expectancy and higher rates of suicide and chronic disease than other nations. High cost, low value. Our health systems are monopolized, so competition for cost and value isn’t the norm as it is in other industries. High cost, low value. We have a system where utilization is controlled by a third party (insurance carrier) and managed by many (billers, claims evaluators, etc), but those actually involved in receiving and paying for the service (patient and employer) are often not in control. High cost, low value.
The fix? Eliminate third party involvement in primary care. The financial transaction is exclusively between the patient, doctor, and employer. No need for insurance claims, billers, and all the other people involved in management of third party transactions. Employees have improved access to primary care and use emergency services 40% less, decreasing overall healthcare costs. Lower cost, higher value.
Overutilization
Medical decision-making is often made based on what is covered by insurance in the fee for service (FFS) model, where providers are paid for services rendered. But should it be? Consider where the medical industry gets most outcomes data. Research (especially that part done for FDA approval) is done by pharmaceutical companies, and venture capitalists. I don’t know about you, but I see a huge conflict of interest there.
Many commonly accepted and insurance-covered medications and procedures, including specialty medications and surgeries, are really not that helpful or necessary. Overutilization is a huge issue for employers. These are huge contributors to the overall cost of healthcare but have not been shown to be of high value for many patients who receive these treatments, especially if delivered in a setting that isn’t well equipped.
The books Unaccountable (Makary, 2012) and The CEO’s Guide to Restoring the American Dream (Chase, 2017) address these issues and are highly recommended reading for businesses who provide healthcare benefits to their employees. More than information and data, these books are a wake-up call and a behind-the-scenes look at why employer-sponsored healthcare is increasingly unaffordable.
And what about a visit to the Emergency Room for something that is not really an emergency? That happens all the time. It’s expensive, inefficient, and invaluable to use high cost intensive care settings and treatments when something less expensive, less invasive, and more preventative will work better. Asthma is a common reason for ER use that can most often be managed in the primary care setting. The average cost in the ER is $1502, but the same treatment in the doctor’s office is less than $200.
Fee for service (FFS) rewards providers, vendors, and everyone else with a finger in the pie for increased utilization. More business equals more revenue.
This in no way means to disparage doctors who operate in the FFS system. It is what it is. In most cases, providers are just trying their best with the tools they have available to them to help their patients get well. Yet, the growing rate of burnout and suicide among physicians is alarming, and the system needs to change for them, too.
Table Health and its founders are grateful and have great respect for our healthcare system when it comes to evaluation and treatment of emergencies and other acute illnesses. Our system excels at getting the job done when someone’s life is hanging in the balance. And it is believed, at least in part, to be due to private investment in industry and the financial rewards inherent in such a system. So despite earlier comments, we don’t disparage the process.
We just don’t want to exclusively rely on this process for all types of healthcare, especially that which is common sense and preventative in nature, and which does not require technology for healing.
The fix? Place the burden of controlling utilization on the provider and patient with a membership based primary model at the center of the plan. Employer sponsored membership-based healthcare is where the employer pays an affordable monthly fee directly to the primary care physician. That fee pays for all of the care the employee or member needs, with no copay and no deductible. This model ensures no financial or time barrier to access for the member, so there is less use of higher cost services, and overall costs decrease. Physicians are mindful of cost because they are not rewarded for increased utilization. Lower cost, higher value.
Inadequate and impersonalized access.
High touch, high value, easily-accessed primary care has been shown to reduce overall healthcare costs and result in higher patient satisfaction. But despite knowing this, what have we done? We have created plans with high deductibles with copays at the primary care level, and we have overloaded primary care physicians with high volume practices, often with 3500 patients or more, with little time or availability, and a lot of burnout.
Despite the obvious and well-studied importance of high quality primary care, we have placed financial barriers and actual access barriers between employees and their primary care providers. This results in lack of true relationship-based preventative care, and it results in desperate, last-minute use of higher cost care settings like urgent care and emergency departments of hospitals where nobody knows your name.
The fix? Membership-based direct primary care physicians have smaller patient panels (usually 500-600 instead of 2000-3000), which allows them to know their patients better and be more available. Physicians can take time to listen during longer appointments, and patients wait less. Services are more robust, delivered on site, and patient satisfaction and convenience is high. Lower cost, higher value.
Lack of marketplace transparency.
From a patient’s perspective, it’s almost unheard of to know the actual cost of a service until it’s obtained and billed to insurance. This applies to doctor visits, labs and other diagnostic services, procedures, and medications. The insurance gets the bill, applies the rules, and the patient gets the bill (sometimes many bills) for what they have to pay weeks and even months afterward.
From a physician’s perspective, it’s nearly impossible to keep up with the details of all the insurance policies their patients have, so they can’t often advise patients about the cost of any service or whether or not it will be covered or paid for by insurance. Their billers often don’t know, either. Additionally, physicians are shielded from knowing the cost of what they order for their patients. Insurance companies have contracts with health systems where labs, x-rays, and other diagnostics and procedures are often obtained, and it can be difficult to find information about cost.
There are also a lot of deals going on behind the scenes that employers, employees, and physicians are not in on, but that’s beyond the scope of this article. Read the books I recommended for an eye opener.
The fix? Total financial transparency, which is possible with direct, cash-based service models. The doctor knows how much his or her services, labs, and medications cost and communicates it to the patient. The patient knows how much services or procedures cost before purchasing. The employer knows how much all the services they will be paying for costs.
The membership-based Direct Primary Care (DPC) service model embodies all these fixes, and has delivered amazing results across the country when used in employer-sponsored plans.
DPC is a growing movement driven by individual physicians who are fed up with the current system and want more for themselves and their patients.
DPC is membership-based, so costs are predictable and known up front. Many DPC practices have lab services and dispense medications right on site for much less; and most have an expanded level of services available compared with other primary care offices.
There is no interaction with third party payers in a DPC, which means incentive pay and its scourge of documentation and nonclinical decision-making is a non-issue. Billers and other extra staff are not needed, which reduces overhead and ensures relationship-based care between patient and doctor.
DPC is high value, low cost primary care, delivered by physicians who aim to make a difference in their industry.
Some DPC practices have the desire and infrastructure to work with employers, recognizing data and cost containment are important.
At Table Health, we have started at square one to redefine healthcare with transparency, authenticity, and value, with DPC-based comprehensive plans for businesses of all sizes.
Find out today how you can achieve higher value, lower cost primary care for your company.