Employers and unions have begun to realize that they are very much in the business of healthcare and that they are the “payer.” The move toward self-funding continues to build momentum as costs increase and employers discover that the healthcare universe revolves around a few massive payers.
American healthcare has become a $4.5 trillion galaxy revolving around a BUCA center that continues to extract more and more value from the system. Stuck in it’s gravitational pull, employers and unions are scrambling to figure out how to address ongoing issues with rising costs and increasing complexity amid decreasing access to timely and quality care. For all employers, the big movements around that center have outsized impacts on budgets and reinforce a sense of limited options.
To increase options, and leverage, more and more employers are moving toward self-funding and discovering a new universe of options for increasing their ability to influence costs and outcomes. In this move, they realize that they are the “payer” and the control point begins to tip with more visibility on the moving parts that create a medical and pharmacy plan. Today, every employer is in the business of healthcare and few can afford to accept the rising tide of increases with little hope of innovation or mitigation.
Self-funding is just the ante to the game. To create the necessary leverage to shift toward a new center-of-gravity requires a new point of view, new partnerships, and the willingness step away from the perceived safety of the traditional insurer. Necessity is the mother of invention, and of boldness. Opportunities to create leverage are no longer limited to large employers as groups of all sizes are seizing the initiative to make meaningful changes.
As self-funded plans evolve amid the changing healthcare landscape, the notion of health stewardship is becoming the watchword as it captures the essence of both financial and member health journey responsibility for the plan sponsor. Recognition of the growing barriers related to access, cost, and complexity, are redefining the self-funded plan sponsor’s role in helping members navigate options responsibly and effectively.
What are the elements of a health stewardship point of view?
- Systemic healthcare problems of access, cost, complexity, and outcomes, cannot be “fixed” with a top-down approach. There is a growing understanding that regulatory and statutory intervention are exacerbating issues by adding complexity and limiting plan sponsor flexibility. Siloed fixes create new problems and generally serve the special interests sponsoring them.
- The massive, fixed structures currently operating as the backbone of American healthcare cannot make the changes needed to remove the barriers. Self-funded plan sponsors are realizing that the financial and competitive incentives to keep things as they are, work against plan and member interests and the need for innovation.
- Existing systems and approaches to healthcare must be reimagined in new ways, centered on the needs of those paying for healthcare in the form of self-funded plans and their members, and incorporating fundamentally different models for access, experience, outcome, and payment. In this way, innovation will be led bottom-up by plan sponsors themselves and their demand for new options. Options that are appearing rapidly.
- Self-funded plan sponsors need effective points of influence and compelling programs to engage members as a steward of financial resources and their personal health. Strong primary care is a key part of the equation but must be paired with the right health solutions horizontally coordinated rather than vertically siloed. Data access coupled with meaningful insights become the backbone to direct stewardship in this new healthcare world order.
- Plan sponsors and their members must be empowered in new ways to make better decisions and enabled with less complex pathways to the overall production of better health. Digital technology is part of this but must be effectively integrated with the analog world of high-touch healthcare and experience management.
Self-funded employers and unions are embracing health stewardship in the form of directly contracted healthcare relationships to increase their influence over costs and outcomes. Local hospitals are a key point of influence, but the move toward direct relationships, and the creation of a “nexus of care” for total healthcare influence, requires municipalities to embrace a new care and stewardship infrastructure to support it. This approach is fundamentally shifting the health benefit, the cost model, and the plan sponsor’s ability to influence both.
