Why is providing employers with transparency around their healthcare costs still a challenge? And what role will advisers have when Amazon, JPMorgan and Berkshire Hathaway start calling the shots for medical coverage prices? These were the topics of the EBA Workplace Benefits Renaissance panel entitled, “Make benefits great again: Differentiate through transparency and accountability.” Moderator Marlin Woods, CEO of Benefits Plus, interviewed panelists Neil Goldfarb, president and CEO of Greater Philadelphia Business Coalition on Health (GPBCH) and Shane Wolverton, senior vice president, corporate development, Quantros, Inc. The following excerpt was edited and condensed.
Marlin Woods: Let me hear your take on this trend of the two major initiatives going on right now with the Health Transformation Alliance and the Jeff Bezos, Warren Buffett and Jamie Dimon coalition, if you will. They've taken the position that business can transform healthcare and they're holding the system accountable. How do you see this playing a role in healthcare?
Neil Goldfarb: The main point is employers were really tired that they keep being told, “I've got something that's going to save you money. I deliver better care,” and yet costs keep going up. For many employers now, the mentality is, ‘If I don't see a double-digit increase then that's a good thing.’ They are ignoring the fact that 35% of healthcare spending is waste and that you should be seeing a downward trend if we're all effective at improving the healthcare system.
Employers are just tired of paying and not getting good value large employers are now stepping up and saying things have to change.
Woods: What are some of your employers looking for in this sea of potential solutions? How are your employers sifting through the offerings?
Goldfarb: Everyday there's some new solution. Everybody recognizes there are problems and so there are lots of venture capital companies and innovative startups and tech firms all saying, ‘We want to get a piece of that pie, but we also have a solution.’
It's very hard to sift through all of this. For a lot of our employer members, they're relying on their benefits consultants to come to them with the proven solution. They don't want to sift through all of that themselves. Some of the really large companies have a person on staff whose fulltime job it is to just sift through all of those opportunities in the in the vendor space.
Woods: Shane, describe what the issue is and then what role do advisers play in needing to move forward to change this reality?
Shane Wolverton: I would go back to a quote that Aristotle made. He said that quality is not an act, it's a habit. I would say — in a provocative way — that I think many of the people in this room have no material understanding of quality and resource utilization in the healthcare space.
A lot of what is presented to employers as products or services are largely unattached to the relative value that's being provided.
We talk about discounts and the brand equity or about organizations that have a heritage of delivering value, but if you actually measure that in a statistically and empirically sound way, much of what is being presented to the employer as a solution has so much variation in quality. It would be like buying a television that either doesn't come with the remote or doesn't work all the way to a 5K television that's kind of cutting edge.
Goldfarb: When we talk to our members, they still rely on their benefits consultants. Yet, when we ask employers for basic information, they'll say, ‘My benefit consultant gives me great data.’ OK, you've told us primary is extremely important — how many of your employees have had a primary care visit in the last year? Most of them say, ‘I don't know, I'll have to get that information.’
What's the obesity rate? Employers tell us obesity and diabetes are their top problems, so what's your obesity rate? No idea. OK, what are you spending on hip and knee replacements as we start to talk about direct contract inquiry for orthopedic procedures? No idea.
‘I'll get that information from my consultants,’ they say. It'll probably take a few weeks and a few hundred dollars and I'll get back to you on that that's what's got to change.
Wolverton: I'm dealing with a large state plan sponsor that's enrolled in a program with respect to joints and their allowed charge values ranged by five X for the same procedure and the quality ranges from literally falling into the first percentile across risk adjusted mortality, complications, readmissions, and serious preventable safety events to the 99th percentile. There's no correlation between what they're paying and what they're getting in terms of risk avoidance or quality achievement and yet they actually have a broker relationship that's very strong that has no knowledge of information that's been prevalent on the provider side of healthcare for 25 years.
This is not a surprise. If you were to ask me 25 years ago I would be having the same conversation that we're having right now. The choice for you guys is are you going to have a seat at the table by choosing to be informed and by presenting information to your employers or your stakeholders in a way that's objective, simple and compelling? Because if you're not, I promise you there are other organizations that are beginning to drive this home and they will make themselves present.
