Self-insured employers play a big role in the U.S. health care system. As a group they finance 34% of total health care spending (see National Health Expenditures 2018 Highlights) and cover 56% of the population (see U.S. Insurance Coverage & trends, 2011-2018: An OPEN MINDS Reference Guide) and 59% of working aged adults. Annual per employee costs are now approaching $15,000 per year. So what employers do with health benefit management has a significant impact on the landscape.
What are employers planning? After reading the results of a new survey conducted by the National Business Group on Health (see 2020 Large Employers’ Health Care Strategy And Plan Design Survey and Large Employers Double Down On Efforts To Stem Rising U.S. Health Benefit Costs…), three planned employer cost containment strategies caught my attention. The first, more virtual care, was not surprising. 51% of employers will offer more virtual care programs next year. Nearly all of 147 large employers surveyed that represent more than 15.6 million employees and their dependents will offer telehealth services for minor, acute services while 82% will offer virtual mental health services, and that could grow to 95% by 2022.
The other two planned changes in employee health benefit plans strike at the fundamental structure of the employer-sponsored health care delivery system. First, nearly a third of employers (31%) plan to implement either accountable care organizations (ACOs) and high-performance networks (HPNs) in 2020 either directly or through their health plans. And that percentage could nearly double to 60% by 2022. The second is the plan to move to “advanced primary care strategies” in 2020. These non-fee-for-service arrangements for primary care are being planned by 49% of employers – and another 26% are considering one by 2022.
The effects of these changes on consumers with chronic conditions and complex support needs – and the provider organizations currently serving them – are clear. More volume of services delivered through telehealth and tech-enabled platforms is a given – and not just for consumers with employer-sponsored health insurance. The other strategies – ACOs, HPNs, and advanced primary care models – are more significant for all stakeholders. For consumers, this means even more limited choice of in the selection of health care professionals. For managers of provider organizations, the push for more ACOs and HPNs mean that referrals could be limited without formal relationships with these growing care delivery models.
Where to start in planning for this market evolution? Management teams need to make decisions about virtual care services. The market is moving quickly beyond the “pilot” stage and strategic decisions are required about whether to develop a service model that fully integrates virtual care into the consumer care experience. And, primary care is morphing – and will continue to morph (see Primary Care—The More Things Change… and Two Possible Opportunities In The Shift In Primary Care). The question for specialty provider organization executive teams is whether to develop primary care services in order to keep their consumer base. And if the answer is ‘yes’, the question is what type of primary care model – integrated, freestanding, virtual, in-home, collaborative… the available models are many.
I think the expansion of ACO and HPN models of service delivery present the most immediate threat to the revenue of many provider organizations. Both models limit choice for consumers – the ACO model is based on “membership” in the ACO organization and in the HPN by meeting the performance standards of the sponsor. To get on these more exclusive provider networks is a function of specialty, marketing, tech-enabled interoperability, and performance management. What we know is there is a general move by all payers to allow narrow networks of clinical professionals and provider organizations, which limits consumer choice and challenges referral development. A very big challenge.
Because of the competitive labor market and the high cost of health benefits, employers are experimenting with a wide range of new approaches to improve the value of their investments. We’ve covered many of these recent developments, which illustrates the wide range of employer approaches to health benefit management:
- Cigna Reports Combined Medical, Pharmacy & Behavioral Benefits Reduces Annual Costs By More Than $207 Per Covered Life
- BCBS To Launch National ‘High Performing’ Provider Organization Network In 2021
- Workplace Mental Health Programs Drive Significant ROI
- Blue Cross & Blue Shield Of Minnesota Launches Omada’s Type 2 Diabetes Management Program
- Blue Cross Blue Shield Of Massachusetts To Offer Online Cognitive Behavioral Therapy Service
- Livongo Health To Provide Chronic Disease Management Services For BCBS Federal Employee Program
- Walmart Employee Health Plan To Recommend Physicians Based On Performance
- New UnitedHealthcare App Now Gives Millions Of Plan Participants On-Demand Access To Virtual Visits
- The Age Of Priceline Health Care
- CVS Health Adds First Digital Health App To Benefits Offerings
And for a deep dive, join us February 12 for the “How To Build Value-Based Payer Partnerships: An OPEN MINDS Executive Seminar On Best Practices In Marketing, Negotiating & Contracting With Health Plans” during the 2020 OPEN MINDS Performance Management Institute.