Here we are in the midst of the 2021 NCAA Tournament and employers are starting to see the results of the Q4 benefits renewal bets they placed. You picked your bracket. How will those picks perform in 2021? Late last year, large employer’s surveyed by Business Group on Health (BGH) expected health plan costs to rise 5.3% in 2021. In projecting possible scenarios for 2021, consultancy PwC suggests the possibility that avoidance of care during the pandemic in 2020 could drive the medical cost trend up by 10%.
As we move through another year with increasing costs and begin to look toward what we do next year, will we move into another cycle of “grin and bear it” or look for innovative ideas to change the game? Some advisors will propose carve-outs, caps, cost shifts, and high deductible plans that shift costs to employee’s and create issues around compliance (not to mention barriers to engagement). All the while, we wring our hands and point at health systems, insurers, PBM’s, and drug manufacturers as the root of all evil.
The 4th Quarter
Yeah, it’s the 4th Quarter and we’re down with time running out and asking ourselves once again: “Why do we continue to play the same game?”
Like it or not, as employers, we are in the health care game. And, in most cases, we continue to lose as costs rise, employee health (mental and physical) gets worse, and we feel powerless to affect either. We didn’t intend to be in the health care game but here we are, realizing just how challenging it really is. Again, we ask: “Why do we continue to play the same game?”
Imagine what would happen if we approached our health plan costs like a market opportunity. First, we’d vet the opportunity. How big is the opportunity? What will it cost us to enter the market? Do we have a differentiated solution? What does the competition look like? How do we position against alternatives? Who do we put on the team to help us make it happen? Are there products or services out there that help us? What does the financial model look like? How do we win?
Necessary Evil or Opportunity?
The problem with an expense like health care is that we approach it as a necessary evil. We approach it as someone else’s game, complete with rules of its own. We don’t really want to play but we have to, so we lace up, jump in, and do the best we can – knowing that we won’t win but must press on, regardless. Often, we find that we don’t even have the right equipment, right knowledge, right players or right strategy to play it effectively. Every 12 months, we revisit it, hoping something changed but knowing the score before it even hits the board.
However, there are also opportunities in the health care game. We just need to make it our game. We need to take the same strategic view of it that we bring to any critical initiative. A longer term, strategic perspective demands a broad view of the challenges as well as an understanding of the opportunities. Then, it needs to be coupled with a multi-year approach complete with short-term and long-term tactics. We have to acknowledge that employee health is a long game, that we are in it, and that we can play it our way.
Consider this: According to the BGS survey referenced earlier, employer health care spending per employee for 2021 will be $10,850. In addition, the CDC estimates productivity losses related to personal and family health problems cost U.S. employers $1,685 per employee per year. Even aside from the direct financial impact, employee health is a major strategic factor for employers. It’s a game that we need to master…
Read this post in full on Northwind Pharmaceuticals’ web site.
Phillip Berry is Founder and CEO of Northwind Pharmaceuticals, a high growth provider of pharmacy services to self-funded employers. A graduate of Butler University, he has served on the board of advisors for the College of Business and is an active Butler alum. An ardent blogger on healthcare and business topics, Phil has authored two books, Stones Across the River and Every Day is Gameday, each a collection of essays on business, leadership and personal growth.
