Healthy ROI: Employers are fighting a losing battle against healthcare costs
Healthcare benefits are investments in employee productivity. Yet, rising costs and a complicated healthcare system allow for little return on investment (ROI). Most employers struggle to change this dynamic. However, despite the challenges, some employers have implemented a proven way to save money, increase productivity, and generate significant healthcare ROI.
ROI is a function of benefits and costs – the greater the benefits per cost, the greater the return. A positive healthcare ROI includes reasonably priced benefits that help attract talent and keep employees healthy, happy and productive.
In recent years, employers have focused on lowering their cost input to ROI by raising employee deductibles, co-pays and coinsurance contributions. Unfortunately, these higher employee burdens have made little progress in reducing overall costs as healthcare spending continues to rise 2-5 times inflation every year. Instead, cost-cutting efforts have disproportionally reduced employee benefits by forcing them into “coverage without care” – health insurance coverage that they can no longer afford to use because the out-of-pocket costs are too high. Moreover, employees are less productive as they are stuck in a healthcare system where they must call weeks in advance to see a doctor, miss work, sit in waiting rooms, see a doctor for only 7 minutes, and receive perplexing bills that arrive weeks later. The combination of lower employee benefits and heavier burdens has made employees neither happy nor healthy.
Recognizing the employee burden, the latest trend to boost ROI is for employers to offer low co-pays for preventive primary care. Although a noble idea, employers have inadvertently raised overall costs by using health insurance to pay for routine primary care. They have simply turned health insurance into a prepaid health maintenance plan rather than insurance against risk. For comparison, imagine filing an auto insurance claim for every oil change or tire rotation. Car maintenance costs would regularly increase as the auto mechanic frequently battled the insurance company middleman for payment. Meanwhile, premiums would explode if employers paid for this type of auto insurance since employees would experience little noticeable penalty for changing their tires every year!
Proven ROI reforms build on the idea of convenient access to primary medical care that is proactive and coordinated. Not merely an annual wellness physical, true access provides an employee/patient the opportunity to develop a trusting relationship of mutual respect with her physician when, where and how it best fits her life.
IBM recognized this when they reviewed the $2 billion they spend on healthcare globally and found the better the primary care access for employees, the healthier the population. They changed their healthcare benefit to center around primary care and even factor in primary care accessibility when deciding where to locate future operations. Additionally, Denmark’s same-day/24 hour access to primary care has led to the highest public satisfaction with healthcare in the world and reduced overall costs by significantly decreasing hospital admissions. Having the resources of IBM or a country like Denmark is one thing, but how does a small employer make similar reforms?
In cities like Seattle, San Francisco and Boston, employers have saved 10-40% on overall healthcare costs while increasing the satisfaction and health of their employees with a new concept called Direct Primary Care. The key is freeing primary care from health insurance restrictions and expenses. With Direct Primary Care, employers or employees contract directly with a primary care provider, consequently removing the insurance middleman standing between them and their doctor. This arrangement provides employees unlimited, 24/7 access to a physician, 30-60 minute same-day/no wait/in office or online appointments, comprehensive care coordination with necessary specialists, wellness counseling, and disease management. When combined with high deductible health insurance, Direct Primary Care provides the access patients need with the necessary protection for catastrophic health needs, thus turning health “insurance” into insurance once again. The healthcare ROI increases through better convenience, quality and lower cost.
BlueSky Health, a healthcare innovator since 2006, is now introducing BlueSky Direct. This Direct Primary Care offering builds on BlueSky’s recognition as a Patient Centered Medical Home by Blue Cross Blue Shield and selection as one of 900 practices nationwide to participate in the Medicare Primary Care Transformation Project. BlueSky Direct, currently offered at BlueSky’s Howell and Houghton, Michigan locations, can be expanded to nearly any community or company. BlueSky Direct can boost employee productivity and help employers achieve a healthy ROI.