Healthcare is traditionally one of the top issues voters say they want Congress to address. This year, the sentiment has intensified. From presidential town hall meetings to congressional hearings to recent public opinion polling, an overwhelming majority of Republican and Democratic voters want Congress to address rising healthcare costs.
But employers and their employees have more at stake than just the cost of utilizing a drug or service, the narrative that is driving today’s healthcare discussion in Congress.
Indeed, employers are at a crossroads in addressing the critical issue of healthcare costs. The fact of the matter is that most employers have no idea how their benefit programs affect employee health outcomes. While it sounds logical that employers understand the link between the benefits they purchase and their employees’ long-term health status, they don’t. Most employers manage their benefits program in separate silos with a single-minded focus only on short-term costs.
When employers focus only on unit costs and transactions in healthcare, employees are undertreated and employers overpay.
Instead of a short-term cost approach, designing healthcare benefits that align the interests of employees and employers around health, and focus on connecting employee health status, care options and outcomes will help employers attain the ultimate goal of a healthy, productive workforce that drives business value for the company.
Employers are recognizing the urgency of this choice but aren’t yet doing enough to address it. If employers don’t start doing a better job of purchasing benefits that help keep employees healthy and productively at work, in part through effective treatment of manageable diseases, our future global competitiveness will be greatly challenged.
For example, better use of medicines can improve health and overall quality of life, which can lead to improved productivity from lower disability and fewer missed days of work. A study found adults with multiple sclerosis that improved medication adherence by 10 percentage points decreased the likelihood of an inpatient or emergency room visit by 9% to 19% and days of work lost by 3% to 8%. Another study found that for workers with asthma or chronic obstructive pulmonary disease, better medication adherence resulted in less time out of work and more than $3,100 in savings on average per worker annually.
Yet, time and again when it comes time to decide on benefits coverage, the choice offered to employers by payers centers on the cost of therapy and not the value it delivers.
What should employers do to define the best path ahead? We believe that when it’s time to negotiate benefits packages with payers, employers must take a more holistic approach to foster key components of healthy, productive workers by addressing the following guiding principles:
- The health and well-being of a workforce is a long-term investment for employers.
- Tangible outcomes for both employers and employees should be clearly defined and include input from both stakeholder communities.
- Benefits should be designed to optimize positive outcomes (both health-related and readiness for work) for the heterogenous population of covered lives.
- Employers should be able to access data to see both unit cost and total cost of care for any given mix of interventions. Employers should evaluate currently available data to define gaps and call on vendors to aid in bridging those information voids.
As price and upfront cost continue to dominate the headlines, a substantive policy conversation among all different healthcare stakeholders about what constitutes value is needed. Without such inclusive dialogue, the value narrative will continue to revolve solely around “whether to pay or not to pay” for a particular intervention. For employers at the crossroads who know that determining value isn’t a binary exercise, the correct path forward is focusing on a definition of value that includes broader outcomes and recognizes the heterogeneity of covered lives.
Our employees depend upon it.