“When spring comes, snow melts first at the periphery, because that is where it is most exposed.”
Andy Grove
Vocalizing has reached a fever pitch across the entire healthcare ecosystem as laws surrounding pricing and payment transparency begin to become fully implemented and enforced. Hospital pricing transparency was the first to hit and then we started to hear more about the Consolidated Appropriations Act (CAA). Supposedly written in response to employers’ cries for “transparency,” the CAA seeks to create transparency on pricing and incentives by forcing employers to demand these things in their contracts with vendors.
In this new world of transparency, the “plan-sponsor,” typically an employer or union, is held responsible for getting better deals, service, and support, from its vendors and then showing compliance to federal officials. Curiously, the law does not address bad behaviors directly with the health benefits vendors who are accused of being the problem. In another interesting twist: the law will be enforced by the Department of Labor. Here is an article that talks more about the CAA.
Will this law disrupt the entire healthcare ecosystem in the United States? Probably not. Will it further complicate an already over-complicated mess? Certainly.
Massive Problems
The main problem with the blanket legislative response to waste, obfuscation, mis-aligned incentives, and myriad other bad behaviors is that, it is, by default, a mass industrialization approach to massive entrenchment and only mass producers can massively respond to massive calls for massively better compliance. In other words, we are trying to collar the industrialized system of medicine and benefits with requirements that demand big organizations with the ability to respond in big ways. Big legislation begets big orgs needed to manage big demands for compliance.
We’re adding complexity to a system that needs simplicity. We’re creating blunt instruments to fix gaping holes rather than doing the really hard work of repairing and rebuilding the underlying firmament. Sometimes the fixes are repairs to existing structures and sometimes we need to look at complete redesign. At the heart of it all, we need a profound shift in mindset in terms of how we approach risk, healthcare, benefits, and the end-game of actually serving employees in the most efficacious and cost effective ways.
The entrenched mediocrity (thank you John Singer) of our current system will not be undone with legislation. We need innovation. We need new ideas. We need new approaches. We need to change bad habits with positive disruption, not by destroying all that exists, but in re-deploying its best parts while creating the missing pieces of a more compelling ecosystem. In this case, compelling means the good stewardship of our resources and the health of those we seek to serve. Lower costs, higher value, and better outcomes.
Starting to Melt
The really good news is that the ice is starting to melt at the edges. We see progressive plan sponsors in our employer and union clients who are finding ways to get the most for their money while creating opportunities for individuals and their families to thrive. These are groups who are not yelling from the rooftops, complaining about naughty vendors, or begging for government intervention. They are simply vetting new ideas, testing new innovations, and taking chances on non-status quo partners.
They are also reaping the benefits of their willingness to innovate in lower costs and better health outcomes.
In this new world of innovation, employers seize the initiative around healthcare costs and outcomes by looking for points of influence. Progressive employers are no longer sitting back waiting for frustrating rate increases, incomplete regulations, unintended legislative consequences, or the good heartedness of vendors who have been obfuscating, misleading, and disingenuously advising. They are seizing the initiative and demanding more. In what way? In many, many ways.
How do we exert more influence on healthcare costs and outcomes?
- For many, this means starting with an onsite or nearsite health center and using primary care to be the overall nexus of care for employees and their families.
- What chronic conditions are impacting us the most? Employers are using data to identify problem areas, then coordinating care and support for those who need it with their primary points of influence. Some kind of direct primary care is the place to quarterback the care for employees most in need.
- How do we cut across the silos of medical and pharmacy to serve our employees better? Self-funded plan sponsors are re-aligning contracts and service providers to integrate the services they need in new ways. Volume-based, fee-for-service medicine, is replaced with a form of value-based care coordinated through primary care pathways that are aligned with employer and employee priorities. This isn’t risk shifting for the sake of risk-shifting, it is finding economic and values-based alignment in which each stakeholder wins when the other stakeholders win.
- How do we know what we’re getting for our money? Direct contract approaches to all services are paramount to good stewardship. Hidden schemes like AWP-discounting on drugs or mysterious network contracts that don’t give clear pricing must be eliminated. Transparency is really about knowing what something will cost before it is purchased. It is now possible to go direct on everything in the healthcare ecosystem. And, there are partners who can make it easy.
- How do we help employees be good stewards of their health, money, and the benefit we are sponsoring for them? Get rid of the shiny object point solutions that create complexity and make it easy. Easy to know the plan. Easy to access care. Easy to understand options. Easy to navigate uncertainty. Easy to be a good steward. Part of this involves designing a great user experience, part of it is providing education to enable self-services, and part is offering navigational support. The nexus of care approach is about making it easy.
- How do we measure success? Visibility and understanding. We have to have our data, it must be clear, and we must be able to find meaning in it. There are tools and approaches in existence today that give us real-time access to data, outcomes, and insights. There are partners who are willing to help interpret, guide, and make it easy.
- Who can we trust? The CAA and other legislation is an attempt to rebuild trust by forcing a requirement for transparency. But we all already know how to build it. Trust and verify. Understand the incentives. Understand how others make money. Ask who is being paid for what. Listen to the words and then compare with results. Who is coming with ideas? Who is removing barriers? Who is showing up everyday and doing the hard work of effecting change, finding opportunities, highlighting problems, and jumping in the fox hole with you to fix any ugliness?
- Where do we find the new ideas? A trusted advisor should be a great source of new ideas. Alas, we need to make sure we understand incentives. Conferences. Periodicals. Vendors. The reality is that it takes work to stay up on what’s happening in the world of healthcare and health benefits. Plan sponsors have to do the work to become and remain experts in their fields. It is one of the best defenses against status quo and/or obsolescence.
Yes, the ice is starting to melt. Where are the edges? You can find them with the innovators, those progressive plan sponsors who choose to be good stewards of their financial and health resources. It is melting with the question: how do we do this better? And following with the will to try new ideas and iterate. There are novel approaches out there. There are options. There are partner organizations who are willing to do the heavy lifting to change things and make life better for employees, their families, and the plan sponsors investing in their health.
Who Wins?
Who wins when the ice melts? You do. Your employees do. Your shareholders do. Today, we are all in the business of healthcare and we must all be innovators. Buck the status quo. Not in a “bet the farm” approach, but in a progressive, iterative fashion. Innovation does not have to mean high risk. There are strong, compelling, and proven options that step away from the mass industrialized approach evolved over the last 50+ years. There are strong and creative partners willing to help you along the way. Don’t wait for legislators, judges, or those living off of the status quo to fix it. We’ve got this.
