If you haven’t heard, Apple is launching Apple HealthKit, a mobile heath tracking system that will enable people to gather information on their health via their iPhone or soon-to-be released Apple Watch and, in time, automatically route that information to an online health record that can be accessed by their primary care physician immediately. While it may take some time to create this portable, web, and mobile health information environment, I believe what Apple is doing is one of three main drivers that will move health insurance from being employer based to consumer based. This may forever change the way health care is financed and delivered.

The idea of getting employers out of the health insurance business is not a new idea. But the pieces are now in place to enable employers to get out of the health risk business within 5 to 10 years, if not sooner. Notice I use the term “health risk,” by which I mean the cost of the employee’s health insurance will not be priced by employer. It will no longer be based upon average age of the employee population, claims experience, or any of the standard underwriting/pricing rules today.

See related story: Success of consumer-based Apple Watch tied to health care stakeholders

That does not mean an employer will not contribute to some of the cost, but I am saying that the employer will not have to worry about setting their budgets based on their medical renewal. They won’t have to worry about managing large claims, employee wellness (unless they want to), hospital networks, or plan design. While I do think employers don’t mind helping employees pay for health care, I don’t think they ever wanted to be in the health insurance risk business, or the claims management business, or the wellness business, or wonder if the person they just hired has a wife at home expecting triplets.

This gets me to the three main reasons why employer-based health insurance is coming to an end. These reasons include reductions in Medicare/Medicaid reimbursements, the advancement of mobile technologies by firms such as Apple, and the cost shift to employees.

Medicare/Medicaid reimbursements

The combination of the expansion of Medicaid under Obamacare along with the reduction in reimbursements for the services provided under the government programs is forcing hospital systems to change the way they do business. In fact, hospital systems are looking to get into the insurance business (ala Kaiser) because they need to get the money from the healthy people and not just less money from the sick people. The thing about it, almost everybody wants this to happen. Employers want out of the risk business. Hospitals need and want the capital. The government wants the relationship to be between the doctor and the patient, and the employee wants lower health care costs. (Let’s not debate this now.) And I don’t know about you, but I would prefer that my primary care physician worry about my health and wellness and not my employer. So, in my opinion, the nation is going Kaiser, the staff model HMO route, because that’s what the market will want.

Advancing mobile technologies

The first reason above is made possible by what Apple is trying to do with their HealthKit product. If a provider system is responsible for my health care then they need access to my information to manage my health. Apple and others want to make it easier to gather a person’s health information and make that information available to the provider responsible for caring for that person. Kaiser is one of the first provider systems on board with Apple. I am not surprised.

Today I can get on a scale in the morning and my scale can send my weight via Bluetooth to my smartphone. Blood pressure tests, blood glucose tests, and other relevant health information can be also easily be sent to my cell phone which I can then make available to my doctor in real-time. The doctor would be responsible for my wellness, because he/she is working for the system that is responsible for keeping me healthy and hopefully out of the hospital. Imagine the doctor having a system that would house all this information on his/her patients. The system could automatically send me an email or text message to call and set an appointment because I put on 10 pounds. Today I get an email from Jiffy Lube saying I need an oil change for my car but never get an email from my doctor saying I need a physical. This is about to change.

Employees want to pay less

I’ve heard this before. HMOs were tried in the '80s, but they really didn’t totally grab the market. Well things are different now. In the '80s the employer paid close to 100% of an employee’s health insurance costs. So, the No. 1 variable when selecting a plan back then was provider access. Is my doctor/hospital in the network? That is all I ever heard. As a result every doctor and hospital joined every network. Today it is different. Employees are paying 40-50% of the costs and it’s going up. Cost has become the No. 1 variable for an employee when making a health insurance purchase decision. The statistics are out there, when given a choice in plans employees are choosing lower cost options. They are now willing to change doctors and sign-up for smaller networks for lower costs.

See related story: Apple Watch: 'Seminal event' for employer wellness market

What we have is the perfect storm; government intervention - advancing technology - and a cost conscious consumer. This combined with the fact that everyone wants it, including the government, employers, employees, provider systems, and the technology companies. I want it too. I don’t want my employer knowing my health information or worried about my wellness. I want my doctor to know. I want my doctor to see me because he thinks I need to see him. I want a test because I need it. I don’t know what I don’t know so I need someone to tell me. The shift from the risk being on the employer, employee, and insurance company, to the provider of care, is a welcome one. I want my physician to want me healthy too.

In this new scenario there is a role for the insurance companies (look at what Aetna is doing), the brokers, and even the employers. I do believe the government and the providers will want the employer engaged in educating employees on what, for many, will be a new health care system. Employees will have to learn how to use the technology. How brokers can participate in this process is another article.   

I will end this by using an often used quote, “Health care should be between the patient and his/her doctor.” The stars are aligning for this to happen.

Markland is president of HR Technology Advisors, LLC. He can be reached at jmarkland@hrtadvisors.com.

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