The clear consensus among brokers is that the delay in the employer mandate is a good thing. There are still regulatory issues to deal with, and subsequent decisions may affect the timing of other provisions, but all-in-all this is a welcome interlude. And may be a good time to assess the trends in employer-based health care benefits and to adjust your business strategy accordingly. We are on the cusp of the convergence of various trends that are reshaping our industry and giving each of us the chance to grow our businesses in new and innovative ways.
The concept of convergence has shaped other industries. For example, the technological convergence of voice and data is well documented and we are all experiencing the benefits and enjoyment of the many products and services that resulted. I suggest that the convergence of technology and ideas in the health care industry is a prelude to the next wave of opportunity.
For a variety of reasons, employees in the U.S. have not been good consumers of health care. Unlike almost all other markets, most employees don't shop for health care the way they shop for other consumer items. However, as consumers become empowered with tools like technology, knowledge and experience, the health care industry will be driven to a new market-based dynamic. The rules of the game will be different, but they will be the familiar rules of a free market economy. Innovation and entrepreneurism will abound. Here are the trends that are converging and shaping the new dynamic:
The economy. Potentially poised for a growth spurt fueled by new health care innovations.
The ACA. If nothing else, health insurance reform has sparked change and driven innovation. Think about it, our industry was plodding along with no significant change in results, the cost curve steeper than every other part of the economy, spend higher than any other country, and a generally unhealthy population.
Private exchanges. Already more than a million lives are on private health care exchanges, with projections for exponential growth in the next two years.
Decision support tools. Combining the technology of how people make purchasing decisions with the latest in UX (user experience) design provides better and easier-to-use tools for consumers.
Spend control. Employers are shifting some of the cost, risk and responsibility of health care to their employees. Defined contribution is not new, but it does help put some control of spend back into employers' hands.
Price transparency. This much-debated topic has received more visibility this year with mainstream media articles such as Time's "Bitter Pill" cover story and, most recently, The New York Times story "The $2.7 Trillion Medical Bill." Educated consumers will require the necessary information crucial to their decision making.
The Internet and social media. More fair price tools and calculators are coming online. Both non-profit and for-profit organizations are providing them, and the use of social media will quicken the information dissemination.
As these trends converge, opportunity will arise and much of it will be related to the change in consumer awareness. Convergence is about change and change is difficult. We are all looking for ways to adapt our businesses to the changing market. Perhaps the best approach is to embrace new technology and ideas driving the empowerment of consumers.
Lamb is VP and group head of the EbixBenergy business unit at insurance software company Ebix Health. Reach him at email@example.com.
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