Posts Tagged ‘McKinsey’

Diving into Cost Transparency

With the passage of the Affordable Care Act in 2010 and the monumental changes likely to occur in how healthcare is purchased, delivered and reimbursed, it only felt natural for me to make a change in my career.  

I’ve spent the past eight years in the pharmacy benefit management industry with CVS Caremark, so I was fortunate to work with a broad cross-section of health plans and large self-insured employers who were all interested in better managing healthcare costs.

While some focused on reducing pharmacy utilization to curb costs, others took a more holistic approach by seeking to drive better adherence and higher rates of gap-in-care closure as their way to ‘bend the trend.’ Although I may have chosen pharmacy, this same debate exists in many other areas of the healthcare universe, whether you look at diagnostic imaging services, wellness programs, or disease management. Essentially, you’re either focused on the near-term or you’re focused on the future.

Regardless of the approach, there is a general lack of understanding among employees about what their care actually costs. I constantly heard from HR benefit managers, “Our employees don’t understand that their $30 co-pay is not the entire cost of the prescription!” or, “If our employees only knew what prescriptions cost us, they might make a different and less expensive choice.”

For me, this is how change:healthcare is changing the game. Not only are they making personalized, plan-specific, cost-and-quality information available to the employees, they are also highlighting savings opportunities to make them understandable and actionable.

As I started to think about this in the context of healthcare reform and what some have referred to as the “retailization” of healthcare, I was drawn to the proactive, personalized approach change:healthcare is taking.

By 2014, healthcare exchanges will likely be a reality, and the individual market will likely be a more meaningful segment of the healthcare marketplace. Whether you believe the McKinsey survey that predicts 30 percent of employers will drop coverage or the Mercer survey (PDF) that indicates only 8 percent will drop, the individual market only will continue to grow and a greater number of individuals accustomed to having their benefits chosen for them will now shop and pay for those benefits themselves.

With this change comes the need for education, information and tools to assist those individuals with how best to spend their hard-earned dollars on healthcare. As employees continue to bear a greater portion of healthcare costs each year and with the market clamoring for this information today, we are in a great position to help fill a major gap in the healthcare system.

If my first month at change:healthcare is any indication of the marketplace’s demand for healthcare cost transparency, I can’t wait to see what the future holds. And with that, all I can say is get ready – it’s going to be an exciting ride.