Employers Begin to Drive Change in the Healthcare Industry

Saturday, November 16, 2019

The way that healthcare is managed in the United States is largely inefficient, and can be costly for both the employee and the employer. Employers are responsible for paying for the large majority of the healthcare needs of their employees-- but the quality of what they are paying for has not only decreased over the years-- it has also lead to an increased dissatisfaction and remarkably less engagement with employees. This issue has caused a surge in employer interest to take the reins and stop waiting for the consultants, insurers, or other third parties to change the system. Employers both large and small see the benefit of revamping this system so that it functions better and more efficiently. 


There is no reason to keep applying a band-aid to each problem that arises-- as that will only create more issues down the road. Employers are turning to the data to see how they can tackle this problem-- and have already begun to make strides that will hopefully change the healthcare marketplace for the better.


American flag painted on brick wall
Healthcare in America has never been so expensive-- employers are starting to realize if any change is going to happen, it will have to be through them.

What Happened to American Healthcare?

The healthcare system in the United States has been going through a prolonged collapse-- and has gone through several “crises” in the past 50 years. Different issues have come to the forefront over the years, but all of them have contributed to the slow and steady decline of the quantity and quality of healthcare. Prices for services have escalated, and people struggle to afford services they need-- some of which can be the difference between life and death. Most Americans get their insurance through their employers, who have also been subjected to the tides of the insurance and health industries.


More and more Americans are having difficulty paying their premiums or deductibles-- which is largely because their employer sponsored plans have increased in price dramatically. Deductibles have noticeably increased over the past decade-- sometimes where a single employee is expected to meet a $5,000 deductible alone. What is being bought at this increased amounts to less and less-- and both employers and employees feel trapped in a system that doesn’t seem interested in changing. If the system was open to creating something that worked, insurance companies would need to examine the data behind the type and quality of care being bought-- and the cost of it. 


Because of the constant increase in prices and premiums, employers have been forced to make their employees pay more-- they are locked into a healthcare system that does not seek out improvement. Some employers cannot afford to offer health insurance to their employees-- and they are left to either find a separate plan on the open market-- or pay out of pocket. With the repeal of the mandatory insurance directive from the Affordable Care Act-- more and more Americans are opting to go without any healthcare.

desk by window with monitor and phone
Large employers have already realized the need to change the healthcare business-- regardless of the possible return on investment.

Employers Take the Lead

Contracting with providers directly

Some employers have had enough of this bloated and inefficient healthcare system, and have taken it upon themselves to come up with some innovative ideas for change. Insurance companies and consultants are being left behind as employers are opting to work with providers directly. Some larger employers such as Walmart, Boeing, and Facebook were fed up with seeing their cost savings taken away by benefit managers, payers, and consultants-- as well as with the limited amount of plans available in any given market. Employers typically take on three common types of relationships with providers:


  • Accountable Care Organizations (ACOs) which will cover the entire population of employees
  • Bundled payment or Centers of Excellence (COE) for specific conditions
  • An advocacy role that speaks with hospitals to consider changes to their current payment structures


Employers have made substantial strides with ACOs and COEs, and more and more employers are looking to deal directly with providers after years of dissatisfaction, poor patient experience, and increases in cost. Unless insurance companies want to see this continue, they should take a serious look at their data and provide employers with a customized structured cost of their healthcare and subsequent outcomes. This would allow the two to come up with a more personalized solution to an employer’s situation-- instead of creating a blanket plan for all kinds of businesses. This type of data analysis is lacking in the healthcare industry-- and it is obvious that employers are no longer interested in paying for things that do not solve the issues facing their employees.


Amazon--Berkshire Hathaway--JPMorgan

Taking it one step further are some of the largest employers in the United States-- Amazon, Berkshire Hathaway, and JPMorgan-- who have taken it upon themselves to find a better way to make healthcare more affordable. This jointure is aimed at creating a separate type of healthcare company that would take the for-profit incentives that are causing healthcare costs to rise out of the equation. The group intends to focus on how technology and innovation can stop the trend of less healthcare for more money, which is affecting most American employers and employees. 


These larger employers refuse to accept that lowering cost and increasing quality are mutually exclusive-- and are committed to fully incorporating technological advances to increase patient satisfaction.

keyboard with lights highlighting G key
New technology and an increase in data analysis tactics can help change the face of the healthcare industry.

Advances in Technology and Data Analytics

Employers should take note of the goals of the Amazon, Berkshire Hathaway, and JPMorgan group-- they should start seeking out technology without worrying about their potential return on investment (ROI). This tends to hold back employers from trying to fix their healthcare problem. The healthcare system is increasingly data reliant-- and since digitization-- there has been an increase in access to patient data and information. Data drawn from healthcare apps or software that shadows patient experiences can offer a wealth of information-- and provide direction for helping to foster change in employer provided healthcare and healthcare systems.


  1. Evaluate practitioner performance

The healthcare system is moving away from volume care to more value and evidence-based care. The data gathered from performance evaluations can be analyzed to see where improvements in patient care and experiences can be made. The providers can be made aware and adjust their performance based on this type of real-time feedback. 


A good way to build a customized solution to poor patient experience is gather the data from direct observations, complaints, patterns, outcomes, and resources. Analysis from these results can allow providers to see where they may have been lacking in their patient experiences. Allowing the data to help providers provide better care will lead to better patient outcomes.


  1. Cost

Analyzing performance data can incentivize improvement in healthcare. Interconnected healthcare records of patients can give physicians access to information about large populations-- which can help reduce costs and unnecessary care. The data can show patterns in a population that can lead employers to create customized and acute solutions to the problems facing their employees-- instead of broad plans that have no flexibility.


Using analytics to identify trends can also help estimate future patient costs for a particular problem-- and allocate the necessary resources accordingly. This allows for better planning and a reduction in wasted manpower and time. 


  1. Predict risk

Analyzing data can also provide information on the risk of certain populations to chronic diseases-- which are one of the largests costs to healthcare plans and providers. By studying the data from populations-- which include health history and socio-economic profile-- metrics like these can be used to predict the risk of chronic disease and future costs of treatment. If employers can work directly with the providers who have access to this data-- they can come up with a plan for their employee population that can offer quality care at a better price.


It is clear that the healthcare system in the United States is need of change-- it has been allowed to stagnate for decades and no longer meets the needs of employees in an effective manner. Employers are starting to take their futures into their own hands-- and with the powerful tools of technology and data analysis with them-- can hopefully find a solution that offers better, less costly healthcare.


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