The Top 7 Health Benefit Trends of 2016
Antarctica and HR?
Meteorologist Dar Gibson walked outside his lab to make some routine observations, slipped on the ice, and blew out his knee. While plenty painful and potentially debilitating, this wouldn’t have been such a big deal if his lab wasn’t the Amundsen Scott South Pole Station.
As in, “The South Pole.” Antarctica.
It was the dead of the Southern Hemisphere winter, a brisk 90-below, and a good three months before weather conditions would allow anyone to leave or arrive on the dark, icy continent. But the longer his knee surgery was postponed, the more likely Gibson, then 29, would face a lifetime of pain and limits to his mobility that could make it darn near impossible to do the job he loved.
This fateful stroll on the tundra happened in 2002 — years before health care reform and concepts like improving access, quality, efficiencies, and preventive care started dominating the national health conversation. But way down there at the end of the Earth, Gibson and his rag-tag medical team set a precedent for one of several healthcare trends that are impacting the offerings HR leaders need to consider for their employees.
One week after Dar’s fall, the research facility’s family physician, physician’s assistant, and cook (a former veterinarian) scrubbed in and reattached the tendon that once connected Dar’s kneecap to his lower leg. They performed the surgery under the constant supervision and guidance of the Chief of Sports Medicine and an anesthesiologist at Boston’s Massachusetts General Hospital, via telemedicine video link. The surgery went off without a hitch.
Telemedicine began decades ago with leading health systems extending care to patients in remote locations. But it was used mainly for expert consultations and diagnoses. Gibson’s was one of the first surgical applications of telemedicine. Today this technology is becoming more common in the treatment of acute conditions, as well as monitoring chronic conditions and post-surgery patients. It’s also a fast and more affordable alternative to costly emergency room visits by patients with minor ailments.
And it’s good timing, too. The Association of American Medical Colleges predicts a shortage of up to 90,000 physicians in the US by 2025, (1) which means telemedicine will soon become more a necessity than a fad.
Trend in action
Mercy Health of Missouri recently opened Mercy Virtual — the world’s first telemedicine center. Here, doctors and nurses consult with patients via video apps. Critical care providers monitor patients’ vital signs, medications, blood tests, etc., via computers and video connections. Once patients are discharged, online-enabled scales, blood pressure cuffs, and other medical devices keep doctors abreast of the recovery process. (2)
The American Academy of Sleep Medicine is launching a new telemedicine platform called Tell A Sleep Doc in January 2016. Using a web-based video platform, patients can access sleep medicine providers for live consultations and follow-up visits. Tell A Sleep Doc syncs with Fitbit® sleep data and features an interactive sleep diary, sleep log, and sleep questionnaires. (3)
Some organizations are using telemedicine to combat repeat trips to the hospital and to help patients transition from hospital to home. The Avery Telehealth 30-day Readmission Avoidance Program focuses on proactive care transition plans and guarantees clients a 30% reduction in readmissions. The system takes the hospital discharge orders, executes them, and proactively coordinates care with patients’ primary care and other community health providers.
What’s an HR director to do?
1. There’s no single, widely accepted reimbursement standard for telemedicine. Some insurers see the value of telehealth and reimburse for a wide variety of services, while others restrict reimbursement to what may be required by state law, which varies state-to-state. Ask your insurers which kinds of telemedicine services they cover, whether they have geographic restrictions (like rural coverage only), what types of providers they cover, and what mode of communication is covered, ie: audio-video, audio only.
2. Twenty-three states and the District of Columbia have enacted full parity laws. Which is to say, insurers must cover and reimburse telemedicine services comparably to in-person services. But again, laws vary state to state. Sixteen states provide state-wide coverage with no provider or technology restrictions. The State of Maine has top grades for their telemedicine laws and coverage based on 13 measured indicators. Maine Telemedicine Services offers clinical, educational, and administrative services via telemedicine across the state — they have no limits on patient setting, covered services, or eligible providers and provide coverage for interactive audio-video as well as audio-only under certain circumstances. (4) Work with your insurer to understand how state-by-state telemedicine laws affect the offerings available to your employees.
There’s a whole slew of devices that allow for real-time, no-hassle communication of a person’s state of health. Doctors can monitor weight, blood pressure, and glucose levels, heart rate, sleep and more, all while their patients go about their daily routines.
Most of the tracking devices on the market today are fitness related. They target the young and active (the image of, say, a 29-year-old polar meteorologist comes to mind). And that marketing approach is working. Roughly 45% of Millennials used some kind of fitness tracking device in 2015. (5) That said, a recent study by Endeavour partners, reveals that more than half of people who own a tracker no longer use it. And a third of owners stopped using the device within six months. (6)
For those with chronic disease, the value in these devices is less in tracking steps than in tracking health indicators. Pew Research data shows that people with chronic conditions are actually more likely to track a health indicator than their active counterparts. So it makes sense that the healthcare industry is pushing to invest more research and development into tracking devices to support this segment.
It took a while, but the age of information finally caught up to healthcare. Patients no longer have to wait until their (often astronomical) bill arrives to know how much their medical procedure or office visit will set them back. Transparency tools now allow consumers to compare providers based on value: They can see which physicians or facilities have the lowest prices and the highest quality. So they can make better, more cost-effective healthcare decisions.
But there’s more to be transparent about than just pricing. A recent study looked at the way cost and quality information affected consumer decision making. (7) For many folks in the study, high cost was a proxy for high value. However, when cost and quality information were reported side-by-side in an easy-to-interpret format, more respondents made the high value choice. What’s more, labels showing that providers made “appropriate usage” of resources or that they were “careful with your healthcare dollars” also led people to make a high-value selection.
Price transparency tools are likely to become more readily available. As of October, 27 states have proposed price transparency legislation in 2015. (8)
Trend in action
While price transparency tools have been shown to decrease spending, the approach can backfire when consumers make price-based decisions in a vacuum. (“A flu shot costs how much?! Forget about it!”) A study by the National Bureau of Economic Research looked at the impact of pairing transparency tools with different insurance plans. When consumers shifted from no-cost-sharing insurance plans to high deductible plans, the savings was primarily based on a reduction in care overall, including preventive care — a move that can actually increase long term costs. Covering preventive services can help support access to the important stuff while making consumers sensitive to the actual costs of discretionary treatment.
What’s an HR director to do?
1. Work with insurers on the presentation of cost information to make sure it’s presented alongside quality data. This way, consumers don’t automatically equate high cost with high value.
2. Increase the impact of transparency tools by moving away from fee-for-service payment models and toward models that incentivize outcome over volume.
3. Read The 2015 report from the American Health Policy Institute, Knowing More, Managing Better: Transparency and the Emergence of Enterprise Healthcare Management.
Some employers are turning to private exchanges to administer their employees’ benefits. Private Exchanges work just like public exchanges, with a few important differences.
- They’re set up by organizations, primarily insurers and consultants, not the government.
- They can offer several plans from a single provider or many plans from multiple providers, and even go beyond medical coverage to include dental, vision, life insurance and other products.
- Instead of government subsidies, employers contribute a defined subsidy to cover a portion of their employees’ plan costs.
The benefits of private exchanges include the potential for lower costs, more health plan options and a lighter administrative load for employers. What’s not to like? According to midsize employers, who are driving the growth of this market, nothing.
But ask large employers, who’ve been slow to embrace the private exchange model, and they’ll likely cite a preference for more customized benefit designs, the complexity of the selection process, continued regulatory uncertainty, and the need to see proof of savings before taking the leap. (9) In addition, any savings may be short-lived. Aon Hewitt, which runs its own exchange, found that during the first two years, employers saw premiums grow by a compound annual rate of 2.6%. However, the 15 companies that joined the exchange in 2014 saw second-year cost increases averaging 5.3% for 2015, compared to a 5.5% increase Aon Hewitt projected for all employers in 2015, adding to questions about how much cost-savings private exchanges can deliver over the long run. Curious? See more here.
While private exchanges have had limited uptake, interest remains high. And as more providers enter the market, mature, and consolidate, they’re beginning to address large employers’ concerns. (9)
What’s an HR director to do?
1. Read Examining Private Exchanges in the Employer-Sponsored Insurance Market published by the Kaiser Family Foundation.
2. Talk to private exchange providers about their strategies for managing the proposed Cadillac Plan tax. Implementation of the tax has not been pushed back to 2020.
3. When considering private exchanges, understand specifically which cost categories would generate savings by making a switch.
Remember Dar Gibson? He’s back in Antarctica again, discovering subglacial lakes. So it’s safe to say that his knee surgery was a success. His medical teams, both at the research station and in Boston, did what they were paid to do: fix Dar’s knee so he could continue doing what he loves, pain-free. Everybody wins! It doesn’t always work out that way, though.
Outcomes-based payment models are emerging across the board in healthcare. These models focus on efficiency, quality, and outcomes to assess fees, versus the traditional unit of service model. And it’s about time. Paying for performance is the cornerstone of the consumer market. We don’t pay for mittens with holes that don’t protect our hands; we switch cell phone companies if they don’t provide consistent, strong service. Why shouldn’t the same principle apply to healthcare?
There are challenges to establishing an Outcome-based Payment model that works. But they aren’t without possible solutions.
Trend in action
Omada Health offers a digital intensive behavioral counseling solution that helps participants reduce their risk of type 2 diabetes and heart disease through weight loss and lasting lifestyle changes. Its performance-based fee structure ensures that partners only pay when the program actually works. So how do they track success? Each participant works closely with a health coach and receives a wireless, digital scale that seamlessly reports results with every weigh in.
What’s an HR director to do?
1. Talk to your insurer or private health exchange to understand their value-based program offerings and the performance of each one.
2. Ask your pharmacy vendor what their negotiation strategies and payment arrangements are with drug companies related to outcome and quality metrics.
3. Work with your vendors to establish outcome-based pricing, so you pay for success, not simply for access.
4. Understand how your insurer or private exchange’s approach to value-based offerings has affected employees (considering overall health outcomes, use of preventive services, and employee satisfaction).
The Baby Boomer generation is retiring. As their numbers dwindle, we’re seeing an unusual shift in the workforce. Typically the shift in majority moves gradually from one generation to the next. However, today’s Generation X is being skipped over, as they will never be the majority in the workforce, and the 80 million Millennials (10) are now the majority.
What makes this new workforce tick? Millennials are heavily focused on overall well-being, rating work-life balance as their top priority over health benefits and compensation. (11) They’re tech-savvy, multi-taskers who are more likely to use health related apps, look for 24/7 access and expect higher levels of personalization. (12) Employers need to start re-thinking benefit offerings that will attract and retain the younger generation.
Speaking of the workforce, how have they been feeling lately? Apparently, not so great. Chronic diseases have reached epidemic levels in the United States. We’re not just talking about older populations here. Adults of working age are suffering from these conditions, forcing employers to bear the economic burden.
Risk factors that can cause chronic conditions include lack of physical activity, poor nutrition, obesity/excessive weight, and tobacco use. Prevention can mitigate nearly all of them. Leading employers are beginning to adopt more comprehensive workplace health strategies that include preventive care programs to help employees address these risk factors at the tipping point, before they become more significant health issues.
Several provisions in the ACA, including tax incentives and grants from the National Healthy Worksite Program support this trend. And sure enough, the Kaiser Family Foundation reports that 98% of companies with 200 or more employees offer some form of wellness program (13).
These comprehensive programs focus on three things:
Primary Prevention — keeping the healthy population healthy with physical activity programs, nutrition education, stress management programs, etc.;
Risk Reduction — detecting and tackling risk factors, such as prediabetes or prehypertension, to control or reverse disease progression;
Disease Management — reducing the impact of disease.
Traditional wellness programs focus on primary prevention. But data shows that they miss the
mark when it comes to addressing the risk factors for developing chronic disease, both in terms of meaningful outcomes and return on investment. (14, 15)
Wise employers want their employees to address risk factors before they develop into chronic disease. So they’re turning their attention to programs that are focused on risk reduction. These solutions offer the best opportunity to spare at-risk individuals, and our society as a whole, from the economic costs of chronic disease.
Chris Kay, Chief Innovation Officer of Humana, sums the situation up perfectly: “Our current health system grew up to serve episodic conditions; it wasn’t designed for chronic conditions. That’s a big miss, considering that chronic healthcare accounts for 3 of every 4 dollars spent across the industry each year.”
Kay continues, “To get a true return on health, we need to design healthcare differently. Through businesses like Humana at Home and partnerships with organizations like the American Diabetes Association and Omada Health, we’re learning a lot about highly personalized care, and it’s brought us a lot of insights.” (16)
What’s an HR director to do?
1. Ask solution providers about their demonstrated short AND long term outcomes with employee populations similar to your own. Are their outcomes clinically meaningful? And is the weight loss maintained? (17)
2. Look for solution providers with high levels of meaningful engagement that tie clearly to outcomes. Is the program designed to meet your outcome objectives? For example, the United States Preventive Services Task Force recommends high intensity behavioral interventions for people with a Body Mass Index (BMI) greater or equal to 30. High intensity is defined as 12–26 sessions in the first year. If you’re seeking a solution for obese employees, you want to ensure it’s been demonstrated to work in this population and that a high percentage of participants are actively engaging throughout the program to reach the weight loss goals. (18)
3. In addition to securing strong solution partners ensure that your overall healthcare strategy is supported by leadership, is effectively communicated, and that your workplace policies and environment support and encourage healthy choices. For more about the critical elements of effective health and wellness programs read the Seven Benchmarks of a Results-Oriented Workplace Wellness Program.
Conclusion
Healthcare is experiencing massive change. Unsustainable increases in costs are requiring employers to take matters into their own hands in order to shape how that change affects their employees.
Employers can improve the experience and cost of care by giving employees access to information and tools that allow them to obtain the care that offers them the best value.
With more than half of Americans at risk of future chronic disease, healthcare costs will continue to skyrocket. (19) However, outcomes-based, engaging solutions can help people make lasting changes that decrease their risk. And shifting to performance-based payment structures will help drive a focus on quality over quantity.
Here’s how employers can direct the future of healthcare:
1. Embrace technology like telemedicine that ensures high quality care that’s convenient while keeping costs down.
2. Shift the focus from treatment to prevention. Look for programs that help identify and support at-risk employees and help them head off future conditions.
3. Provide transparency into both costs and quality. When employers, employees and healthcare providers can see for themselves that high quality care can be obtained at a lower cost, it can have the effect of driving high-cost providers out of the market and overall costs down.
4. Start the shift away from fee-for-service and toward outcome-based payments. Make this criteria a priority when evaluating new programs.
The more employers demand this, the sooner providers will start to toward this direction.
The goal is supporting optimal employee health at realistic costs, which translates to high productivity and engagement along with strong overall company performance.
Works Cited
1. Association of American Colleges. Physician Supply and Demand Through 2025: Key Findings. [Online] 2015
2. Mercy Virtual. [Online] www.mercyvirtual.net.
3. Sleep Review. AASM Builds Telemedicine Platform “Tell A Sleep Doc” (Online) 2015. http://www.sleepreviewmag.com/2015/12/aasm-builds-telemedicine-platform-tell-sleep-doc/
4. American Telemedicine Association and US HHS — HRSA website
http://www.hrsa.gov/healthit/toolbox/RuralHealthITtoolbox/Telehealth/whatarethereimbursement.html
5. Deloitte Consulting. 2015 Survey of U.S. Health Care Consumers. s.l. : Deloitte, 2015.
6. Fox, S., Duggan, M. Tracking for health. [Online] Pew Research Center, 2013. http://www.pewinternet.org/2013/01/28/tracking-for-health/.
7. J. H. Hibbard, J. Greene, S. Sofaer et al., “An Experiment Shows That a Well-Designed Report on Costs and Quality Can Help Consumers Choose High-Value Health Care,” Health Affairs, March 2012 31(3):560–68.)
8. NCSL Transparency. http://www.ncsl.org/research/health/transparency-and-disclosure-health-costs.aspx
Centers for Disease Control and Prevention. National Health and Nutrition Examination Survey. Centers for Disease Control and Prevention. [Online] 2013. [Cited: April 9, 2015.] http://www.cdc.gov/nchs/data/hus/2013/069.pdf.
9. Accenture Consulting. Insight: Private Health Insurance Exchange Annual Enrollment (Online) 2015. https://www.accenture.com/us-en/insight-private-health-insurance
10. United States Department of Labor. U.S. Bureau of Labor Statistics. [Online] http://www.bls.gov/.
11. PricewaterhouseCoopers Health Research Institute. Top Health Industry Issues of 2015. 2014.
12. Abbott, Randall. Eight Macro-Trends Influencing Employer-Sponsored Health Care Strategies. s.l. : Towers Watson, 2014.
13. Kaiser Family Foundation. Employer-Sponsored Family Health Premiums Rise 3 Percent in 2014. The Henry J Kaiser Family Foundation. [Online] 2014 йил 10-Septembe. [Cited: 2015 йил 2-March.] http://kff.org/health-costs/press-release/employer-sponsored-family-health-premiums-rise-3-percent-in-2014/.
14. Mattke S, Liu H, Caloyeras J, et al. Workplace Wellness Programs Study. RAND Corporation. 2013.
15. Siyan Baxter, Kristy Sanderson, Alison J. Venn, C. Leigh Blizzard, and Andrew J. Palmer (2014) The Relationship Between Return on Investment and Quality of Study Methodology in Workplace Health Promotion Programs. American Journal of Health Promotion: July/August 2014, Vol. 28, No. 6, pp. 347–363.
16. Hospital Impact http://www.hospitalimpact.org/index.php/2015/12/17/title_148
17/18. United States Preventive Services Task Force Final Recommendations — http://www.uspreventiveservicestaskforce.org/Page/Document/RecommendationStatementFinal/obesity-in-adults-screening-and-management
19. Based on analysis of US adults above age 18 from National Health and Nutrition Examination Survey (2005–2012) and USPSTF guidelines eligible prevalences for overweight and cardiovascular disease.
