For most employers, offering a competitive and innovative health benefits program is a business necessity. It has also become a “second business”. Not only did the recent pandemic force employer health benefits leaders to become de facto public health officials, it also brought forward the reality that these same HR leaders are actively operating mini subsidiaries that spend literally hundreds of millions of dollars on healthcare inside of the core business. Given that both nominal and healthcare inflation are climbing, we can expect double digit healthcare cost increases in the years ahead. As a result, CEOs and CFOs are appropriately taking a deeper look at the strategic role of their human resource leaders and their healthcare spend.
Due to the size of this spend, employers (typically above 1,500 but can be as small as 50-100 employees) have found it advantageous to take on the health risk liability of their employees by self-insuring (or “self-funding”). With self-insurance, the employer sets aside funds in a medical “checking” account, and then contracts with a health plan to “administer” its various health service functions for and on behalf of eligible employees and their dependents. The health plan is responsible for negotiating pricing with providers, creating a reasonable network of providers with good access, providing payment and reconciliation services, and offering “add on” programs to address specific needs like case management, clinical programs, and other related health services. Every year the health plan comes back to the employer and goes through the process of trying to explain why the rates are going up (again) and how they will be adding value to the employer “next year.”
The reason the rates go up is that no one is really accountable to or responsible for coordinating the actual care delivery and the subsequent health care costs. In fact, the spending of this second business is basically “waved” through with little to no fan far. There is quite a bit of trust (mis)placed in traditional “healthcare establishment” to be good stewards of both the care and the payment, and the parlor trick of traditional fee for service architecture allows the music to continue playing. However, the employers looking for a partner to dance with are surprised when no one really seems to be dancing at all:
- Health Plans talk aspirationally about driving efficiency, pushing for cost savings, and finding improvements but often don’t have the impetus to change without strong competitive pressure.
- Health System and Providers intermittently soiree about prices and promise better performance but end up driving clinical “transactions” as a primary means to increase revenue.
- Individual Patients who are not exposed to any real market prices (the piecemeal pricing mechanisms in healthcare don’t enable anyone to see the full cost…ever), have limited ability to “shop” for good healthcare (extremely challenging despite significant investments over the last 20 years), and bear none of the financial burden of their health or care choices (there are no economic calculations when there are no economic costs).
Health activist employers trying to achieve the Triple Aim are often confounded by the (in)actions of the Triple P’s above.
As such, they have determined that in order to control health care costs they must get involved with health care delivery. This requires that they both recognize and begin to manage their “second business”—providing healthcare benefits—as an integral part of their core business to be successful in the future. This requires a good understanding of network pricing, provider contracting, benefit designs, member incentives, and the key cost drivers that are subject to intervention and impact (trauma cases no; mental health yes). And, the most successful employers always start with foundational Primary Health.
Primary Health is an advanced form of primary care that is intended to be a comprehensive, integrated, coordinated, and accountable form of care delivery, with providers working together to deliver exceptional care while proactively attending to the health, wellness, and vitality of each member. It includes primary care, nursing, mental health, physical medicine, health coaching, fitness, and care navigation. It is delivered in person, online, and anytime—the Primary Health team of providers is here for members 24/7, 365, through every season, any weather, and all conditions. It acts as an organizing catalyst or platform for other services and point solutions that have proven their value and can be integrated into the care workflows and patient journeys. Given the level of commitment, Primary Health is all in, always on, and ever ready. The entire premise is built on a true relationship, addressing real health problems as they exist in the real world—in which real humans live their real lives.
One final comment . . . as a healthcare provider, I view our Primary Health service as our second business. I believe Crossover does it better than anyone—from our care teams, to our care model, to our technology, to our proactive focus—and I am proud of the work that most can see. But what you don’t get to see as often is what I describe as our first business: The privilege of establishing meaningful relationships with our members—to be there when they need us most (and I can tell you it isn’t on weekdays between the hours of 8am and 5pm!) and to consistently help them achieve meaningful progress in their own lives no matter where they are on their health journey.
Primary Health is more than a bolt-on. It’s more than an app. It is the foundational means by which we’re helping our employers’ second business become both a strategic and competitive asset that supports the success of their first business!
Scott Shreeve, MD 