Tuesday, 25 October 2016 04:54

Value is in the Eye of the Beholder

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Well, it is that time of year for many of us who are thankfully employed by companies small and large alike – it is open enrollment season! 

Human resources departments around the country will once again vet various health insurance companies, either directly or through agents, then review benefits and premium costs. Those employers will finalize their selections and execute group agreements with their chosen health and dental insurance companies.

Next, those departments will communicate health and dental insurance options to their employees – with methods including but not limited to brochures, benefit plan overviews, enrollment forms, employee contribution statements, comparison charts, provider network overviews, etc. Employees will attend overview sessions seeking answers to their questions and talk to co-workers, family, and friends about their experiences. Finally, selections will be made and enrollment forms turned in (or default options chosen for the employee).

For me, going through this annual process for the 30th time, I am always grateful for the generosity of my past and current employers for providing (and, more importantly, subsidizing) this benefit for me. As we all know and respect, it is truly an invaluable benefit to have insurance that protects both our personal health and our financial health. But with my recent experience writing for VBPmonitor about value, this time I viewed this process through a different set of lenses. I asked myself, “how am I measuring value as I go through this decision process to pick a health insurance option?” The brutal fact is that, in the past, I did not consider value in my decision making – I solely considered my cost share, plus metrics such as payroll deduction, deductibles, and co-insurance percentages. Why do I know that I did not consider value when making my decision? It was easy to determine, because I didn’t ask or investigate any of the following questions:

  • Was the health plan NCQA or URAC accredited?
  • Which benefit plan or insurance company would help ensure my compliance with annual physicals and other preventative activities?
  • Which health plan has the best customer service rating and offers the most self-servicing options such as digital tools?
  • What are the STARS and HEDIS ratings of the provider network, and who has the most in-network doctors and hospitals?
  • If I have a chronic disease, which payor and provider relationship will help me deal with my condition so I can enjoy a normal lifestyle?
  • Which provider has a 24-hour “ask a nurse” program?
  • Which in-network doctors and hospitals most effectively use electronic medical records and health information networks, so my holistic health record is available to them to ensure that the best decisions are made for my care and to avoid unnecessary or repeat tests?
  • How do health plans integrate clinical data from providers to provide more informed care and disease management services?

Why was this the case?  Why did I not act as a true consumer, as if I was shopping for home/car insurance or a new refrigerator? It’s simple. I am still not acting like a consumer, since employer-sponsored health benefits continue to be paternalist. The bottom line was that I truly did not have to “shop.” My employer did everything for me – they picked the health insurance company, the programs (e.g. POS, HDHP with an HSA, etc.), the benefit levels, the payroll deductions for each option, etc. Moreover, a simple chart was provided, highlighting comparisons and financial impacts. It was so easy, and, frankly, there was very little decision-making that I had to do other than having a 15-minute conversation with my spouse.

Think of it in another manner. Let’s say you need groceries. If I told you the specific store to go to, what aisles to enter, provided one to two options for up to a dozen grocery staples, and gave you a dollar limit, you would not do any of the following: look at the Sunday ads for price comparisons, check out hours between stores, clip coupons, compare driving distances from your home or office, consider the helpfulness of the employees, etc. In essence, you would not shop and would not consider value. You would simply buy the items that were available to you with an emphasis on cost.

How do we change this model in healthcare? The best motivation for change is through the pocketbook. This may seem radical to some, but I am convinced that the only way to transform the healthcare purchasing system to become more value-based is to eliminate the employer-sponsored model and replace it with an employer-provided tax-free stipend for employees to purchase health insurance from any company and at any benefit level. 

Now, don’t get me wrong, I recognize the importance of a health insurance benefit to attract and retain great employees, and I am not suggesting that the ability to purchase health insurance be abandoned. I also recognize that before taking this radical step, the individual insurance marketplace needs significant fine-tuning so all insurance companies remain involved and choice and premium rates are better controlled. Regardless, until employees are provided with an employer-sponsored stipend, tax-free, to purchase health insurance ourselves, consumers will never recognize or appreciate value as described in the aforementioned examples regarding service and outcomes. It will simply and solely continue to be a cost decision. 

The Triple Aim measures value as service, outcomes, and cost. Once costs and choice are normalized among options, then consumers will consider overall customer service and the outcome of that service. If your employer didn’t provide annual insurance benefits, how would you determine value to make your health insurance decisions? It was a sobering awakening I went through this year. Look at it through a different set of lenses and evaluate your decision process as you go through open enrollment season this year, and you will realize that value is indeed in the eye of the beholder.

About the Author

As senior vice president of healthcare solutions for HighPoint Solutions, Jim is responsible for business and financial growth, new product/service development, strategic planning, business partnerships, and staff development across our healthcare practices. Prior to joining HighPoint, Jim spent 14 years as CIO and VP of enterprise operations at Priority Health. He has also held senior positions at JS Advisory Services, Ernst & Young, and the Henry Ford Health System.

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Last modified on Wednesday, 26 October 2016 00:25

As Senior Vice President of Healthcare Solutions, Jim is responsible for business and financial growth, new product/service development, strategic planning, business partnerships, and staff development across our healthcare practices.  Prior to joining HighPoint, Jim spent 14 years as CIO and VP of Enterprise Operations at Priority Health. He has also held senior positions as JS Advisory Services, Ernst & Young, and Henry Ford Health System.