Spiraling health care spending threatens the long term economic solvency of the U.S. government as well as the global competitiveness of American corporations. Where health care goes, so goes the economy. By now you've probably heard this repeated over a thousand times.
To Whom Should We Look for Solutions?
Despite the largest Democratic majority in a generation, Congress was for the past year unable to pass health care reform legislation. And even if they had, the proposed reform was more oriented towards improving access than containing costs.
In a recent interview with The New Yorker, Harvard Health Care Economist David Cutler -- the senior health care adviser to the Obama presidential campaign -- described Medicare as "a robotic program that collects bills and pays, collects bills and pays," adding that, "Medicare has been essentially brain dead, not doing a thing to promote quality."
So much for government leadership. What about employers?
Most Americans get their health insurance through their employer. Employers, along with their employees, pay, through premiums and taxes, for the vast majority of the now $2.5 trillion spent annually on health care. It's therefore in employers' best interest to curb not only their own spending but spending on health care overall.
However, employer health care spending continues to rise at a rate of about 10% annually, and it seems that for a long time many employers have been resigned to the fact that this is a trend over which they have zero influence. It's hard to imagine a company looking at 10% annual inflation in its costs without taking drastic efforts to intervene, but many employers have been afraid to get their hands dirty with health care delivery. As a result, large employers pay millions -- some even billions -- of dollars on health care for populations of employees and dependents that can exceed those of some states, often with full knowledge that they are not getting value for their money.
What about private sector transparency, competition, innovation, and efficiency?
Increasingly burdensome health care spending might have awoken a sleeping giant in employers. To protect their own interests, U.S. companies are being forced to deliver innovative solutions that will increase health care efficiency, lower costs, and indirectly provide solutions and leadership that this country desperately needs.
Large self-insured employers in particular are uniquely positioned to lead the way, as they have both the means and the motive to significantly improve the health and care of their employees. Here is a sampling of what these employers are already doing.
Championing Health and Wellness
Perhaps more than any other health care stakeholder, employers' financial incentives are aligned towards keeping their employees healthy as lower demand for care and increased workplace productivity are good for the bottom line.
Workplace health promotion programs consistently demonstrate a positive ROI, and are attracting increasing investment from employers. On-site fitness centers, healthful cafeterias, financial incentives for wellness programs, and value based insurance design programs are just a few things employers are doing to promote employee health and remove barriers to high value care.
These are positive steps toward a more rational balance in our nation's investment between treating sickness and promoting wellness.
Putting Employees in the Driver's Seat
Information is fundamental to knowledge, power and good decision making, but it can be next to impossible for individuals to aggregate their personal health information from multiple providers, payers, labs and pharmacies.
Even though the HITECH Act, part of the American Recovery and Reinvestment Act of 2009, mandates that individuals have access to a copy of their digital health information, numerous barriers often preclude this from happening.
Employers can help. For instance, Dossia is a consortium of large employers that is using employer leverage to aggregate digital health information on behalf of employees in the form of a private and portable personal health record.
Armed with their personal health information, employees become better informed consumers and more active participants in their care. A PHR also can serve as a platform from which to deliver employees personalized tools that enable them to achieve their health goals, as well as information about health care -- quality and price -- that empowers employees to become discerning consumers. Combine this with consumer-driven health care plans, and employees become the real health care consumer, able to force the system to compete for their business.
Engaging Providers Directly
Though self-insured employers pay for their employees' health care, they have historically tended to outsource the design and administration of health plans to third parties that might not necessarily share an employer's motivation to improve efficiency and lower costs.
Increasingly, however, employers are taking a more proactive role in employee health care. Employers save money by encouraging their employees to use retail clinics for basic care, and many employers have set up company-run clinics to provide such care on-site.
In addition, employers are beginning to bypass their health plan administrators completely and negotiate directly with providers. This will enable employers to reduce spending on overhead and secure better contracts with providers.
It also will give employers a channel through which to promote innovation in health care delivery, for instance by requiring providers to participate in patient centered information connectivity, and coordinated care delivery.
Where Do We Go From Here?
Employers cannot offer all the solutions. But by taking a more proactive role in the health and care of their employees, employers have an opportunity not only to reduce their own spending, but to provide leadership and innovation that will provide a model for improving efficiency across the entire system.
By investing in employee health, empowering employees with information, and contracting directly with health care providers, employers have the potential to demand greater efficiency and innovation from health care -- something from which we would all benefit.