Posts Tagged ‘ACA’

“The Birth of the Healthcare ‘Consumer’”

Doug Ghertner President and CEO

Doug Ghertner
President and CEO

Last month, RBC Capital Markets released a research paper titled “The Birth of the Healthcare ‘Consumer’ and the Evolution of PopHealth.”  In it, the monumental changes underway in the healthcare industry are likened to the changes experienced by the music industry over the last 10+ years.  “Much in the way the digitization of content upended the music industry in the last decade, the ACA and new information tools focused on the healthcare consumer are disrupting the healthcare market,” the authors write.

I’d never really thought about it in this way before, but, yes, the parallels between the music industry’s technology-driven revolution – which forced a shift from a label-centric business model to a consumer-centric business model (one in which consumers enjoy tremendous freedom in choosing how, when and what they consume) – and the evolving healthcare industry are clear.

With the implementation of the ACA – and resulting growth in high-deductible health plans, as well as public and private exchanges – the consumer becomes the primary economic decision-maker in healthcare. What does this mean for plan sponsors? Many things, among them:

  • A need for support in transitioning consumers to new health plan types, exchange-based or otherwise.  High-deductible and defined-contribution health plans are experiencing record growth nationwide. To ensure consumers understand the dimensions on which they are choosing and how to maximize the value of their healthcare dollar, educate, educate, educate. (RBC’s research, in fact, calls education a critical component of the equation.)
  • A need for more and better consumer-friendly tools to enable intelligent healthcare purchasing decisions. Unfortunately, the “if you build it, they will come” approach is unlikely to work. To successfully engage today’s healthcare consumer – and drive long-term behavior change – efforts must be proactive, personalized and easy to understand.
  • An understanding that population health will play an increasingly important role in the future of healthcare. To maximize the value of investments made in this area, either in the form of additional wellness offerings or incentives to promote them, plan sponsors must engage consumers in a sustainable way.
  • Whether you’re a health plan competing on an exchange or an employer moving lives to one, today’s healthcare consumer needs a fundamentally different set of tools and resources if we want their experience to be a positive one.

Yes, the consumer will soon be the core of the healthcare market and plan sponsors must adjust accordingly.  As was the case with the music industry, it’s an evolve or die proposition.  To that, Change Healthcare says “Evolve!”

Saving the Affordable Care Act

In a recent Wall Street Journal op-ed in which he redefined the President’s national healthcare program – ACA, the Affordable Care Act – into something that could actually be both workable and cost-effective, Indiana Governor Mitch Daniels was onto something.

Along with 20 other sitting US governors – including Tennessee’s Governor Bill Haslam – Governor Daniels challenged HHS Secretary Kathleen Sebelius to redefine and restructure this new law. Rather than just saying no, Daniels – on behalf of his fellow governors – detailed a series of six changes that will be needed to make the ACA work for America. What caught my eye – and one that I felt was key:

  • The law’s provisions discriminating against consumer-driven plans, such as health savings accounts, (would be) waived.

In short, these Governors, representing states with 115 million Americans, have endorsed the same consumer-driven approach to healthcare that other companies, and our own, have been advocating.  We know and believe that given the choice, the motivation and the right pricing information, Americans can – and will – lower their own healthcare costs.

Governor Daniels said that consumer choice – and the motivation provided by health savings accounts and other programs giving patients a stake in seeking out the most cost-effective care – will drive costs down.  And he’s right on target.

Americans are world-class shoppers.  When given the motivation to price-shop and the transparent pricing information needed to make informed decisions, they will invariably make cost-effective choices.  I know this from experience.  It’s the value we deliver to employees across American as we deliver very specific, actionable, healthcare product and service pricing information on a very local basis.

For instance, through our client Thompson Machinery – a seven-year veteran of Consumer Directed Health Plan (CDHP) advocated by Governor Daniels – we’ve been able to generate annualized savings of at least $200 per employee, with some achieving savings of from $800 to $1,000 per employee.  Imagine if the 115 million Americans represented by these 21 Governors were to achieve those kinds of savings?  In round numbers, we’re talking about $23 billion dollars per year in real-world, provable savings.

Here’s the bottom line – with a series of fiscally-sound adjustments to the ACA (such as those advocated by Governor Daniels), and accurate and local pricing information, the American people can make the ACA work for themselves, and for our country.  Savings will not be realized by bureaucratic mandate, by Congressional law or by court rulings.  Instead, savings will be realized when individual patients – transformed into informed and price-conscious consumers and provided with the pricing data they need – make individual buying decisions based on both quality and price.

I applaud Governor Daniels. With leaders like him and his 20 fellow governors, what we have done with more than 100,000 American consumers can just as easily be done by 100 million Americans.