Goering Center news: Fixing healthcare

By Erick D. Schmidt

The 2020 presidential election campaigns have already begun, and access to affordable healthcare coverage has again become a hot-button issue with politicians on both sides of the aisle.

Why? Because our current healthcare system remains in desperate need of improvement. While a single-payer system like Medicare for all will continue to be a talking point for some candidates, employers can’t wait for Washington and need to think differently about how they manage the rising cost associated with providing healthcare benefits to their employees. The fact remains that employers continue to be the main source for most Americans when it comes to where they receive their health insurance and other benefits.

To say it another way, employers, not insurance companies, are the real payors for healthcare.

Employers are in the best position to drive change if they are willing to think differently about their role. With lifestyle decisions linked to 70 percent of all healthcare costs, employers have an opportunity to design programs that identify risk and opportunities for healthier outcomes, lower their long-term risk and deliver healthier birthdays for their employees. With properly designed incentives, employers can drive compliance with preventive care in a way no one else can.

The good news is that despite the challenges presented by our current system, there are more options for employers today that should be considered.

Some options with risk and reward:

• For employers with fewer than 50 employees:
  Pooling arrangements like MEWAs, association and chamber plans often provide a good alternative to the Affordable Care Act's options. Level-funded plans are another option that allows shared risk and reward.
• For employers with 50 to 99 employees:
  Stacked HDHP/HRA plans allow employers to share in a small level of risk with the same level of reward. Level-funded plans allow shared risk and reward. Captive arrangements provide group purchasing and risk pooling to lessen some of the risk associated with traditional self-funded options while still providing an opportunity for reward.
• For employers with 100-plus employees:
  Captives are also a good option up to 250 employees.  Along with traditional self-funding options, alternative health plans are gaining popularity as another alternative to traditional health insurance carrier options. From referenced based health plans that tie provider reimbursements to Medicare pricing plus a certain negotiated percentage, to plans that steer employees to the highest quality providers, alternative health plans should be a part of the market review process.

With all these options, partnering with a knowledgeable and strategic benefits consultant has never been more important.

While many employers have used a formal RFP process to select their brokers or employee benefits consultants in the past, the complexity of today’s environment requires a deeper dive.

The deeper dive should include meeting the whole account team and getting answers to the following questions:

• What is the firm’s market share and size with predominate insurance carriers in our region?
• What experience do they have with companies your size?
• Does the firm have a process in place for determining the capacity of the client-facing teams?
• How many clients does the team assigned to you currently have and how many more will they take on before they are considered at capacity?
• Do they offer performance guarantees?
• How will they help design and support a long-term health risk management strategy? How will they measure success?
• Do they have experience with on-site or near-site clinics?
• What is the depth of their government compliance support? Do they have an attorney on staff?
• Do they have a data analytics system to measure initiatives and assist in plan design and decision making?
• Does the firm provide support for targeted communication strategies to drive engagement?
• How will the firm help your employees with escalated customer service issues? Do they track issues and can they provide reporting back to you?

Obviously, there are many more questions to consider in an evaluation, but a formal process that does not validate the responses to an RFP is lacking in today’s environment. The most important thing you can do is include an onsite visit to meet everyone on the team and see how they will deliver their services live in action.

Erick D. Schmidt is vice president and managing shareholder of McGohan Brabender’s Cincinnati region. Reach Erick at (513) 489-2700 or at eschmidt@mcgohanbrabender.com