Five Reasons the Time Is Now For Consumer Driven Disruption of the Health Care Status Quo
Health care has been unaffordable for decades. But employers and working Americans have new leverage to push back.
I had a fascinating conversation with a team of lawsuit-hungry litigators a few weeks ago.
Their targets: employers who sponsor health plans for their employees.
The attorneys were searching for legal angles to sue employers for violating their fiduciary duty to protect their health plan’s assets.
The federal law known as ERISA requires each employer to protect their health plan’s assets and operate the plan prudently, in the sole interest of its participants. But employers have been allowing the health care industry to get away with deceptive schemes that exploit their health plan. It’s resulted in runaway health care costs and debt for working Americans.
The attorneys I spoke to, and others like them, may soon give employers a wake-up call.
I recently wrote a newsletter that I called, The Consumer Driven Disruption of the Health Care Status Quo. I wrote about the early warning signs that an industry is likely to be disrupted and how those signs show up in health care. I showed how innovative employers and their advisors are delivering better benefits at a lower price.
This is part two. I want to do a reality check. People have been talking about the burden of health care costs for employers and working Americans for decades. But the problem has only gotten worse. Am I delusional to think that things will change now? Fair question. But yes, the stage is set for this disruption to gain traction and accelerate. Here are five reasons why things are different now:
Reason one: Attorneys are rallying to sue employers for violating their fiduciary duty.
I don’t think the lawsuits must be successful to be effective. Merely filing the cases will jolt employers. Employers need to demand accountability for the health care industry’s deceptive methods. They and their employees need to change the way they engage with the health care system. My book, Never Pay the First Bill, lays out what employers can do to protect their plan assets. Need a quick primer? Check out my health literacy videos, The Never Pay Pathway, which are based on the book. There’s no excuse for ignorance at this point in the game.
Reasons Two and Three: Hospital and health plan price transparency
In the past two years we’ve seen some key policies come into effect that are upending the status quo. The Hospital Price Transparency Final Rule required hospitals to post their prices on their websites. Compliance has been spotty, but CMS has issued penalties and the OIG has publicly announced an audit. Also, members of Congress have urged the GAO to audit compliance. Compliance will improve.
The prices we are seeing are revealing and outrageous. Prices for the same services at the same hospital vary – sometimes exponentially – depending on a patient’s health plan. Working Americans are forced to pay significantly more than Medicare patients for the same services. This is price discrimination against working Americans. Seeing the price variation empowers employers, benefits advisors and patients to demand a fair deal.
The Transparency in Health Care Coverage Final Rule goes even farther. It requires insurers to show members their out-of-pocket costs for medical services and prescription drugs. The rule also requires health plans to produce machine readable files that show their negotiated prices.
Tech start-ups, data scientists, journalists and researchers will be feeding on these troves of data. This information will eventually become digestible for employers and consumers.
Reason Four: Brokers must now disclose their compensation from the health care industry
The Consolidated Appropriations Act of 2021 requires brokers to disclose to each of their employer-clients the direct and indirect compensation they are being paid by vendors who help operate the employer’s health plan. This requirement came about in part because of my 2019 ProPublica story about the lavish bonuses, commissions and other perks that health insurers and other benefits vendors bestow on brokers. The brokers are supposed to be working on behalf of employers. But they’re typically paid by the industry players who need access to the health plans. It’s a deep-seated conflict-of-interest.
It's going to be awkward for some brokers to disclose their compensation to employers. Each employer will see how industry-money may be influencing the broker’s advice. For some employers, it may be “the business equivalent of finding out your spouse was cheating on you,” said Dave Chase, founder of Health Rosetta, when he spoke to me for my ProPublica story about the new law.
This new transparency will spur brokers and benefits advisors to deliver better value to their employer clients. It will nudge them toward the many innovative solutions that exist to lower the cost of the benefits. Brokers that don’t innovate risk losing their employer clients. The disclosure may also lead more brokers to get paid directly by employers, which eliminates the conflict-of-interest.
Reason five: Employers now have access to their health plan’s claims data
I spoke in October at a conference sponsored by 4C Digital Health. The day before the event, I sat in on a presentation where they introduced their new data analytics platform, Symphony.
The Consolidated Appropriations Act also gives employers a right to obtain their claims data from their insurance carrier. Previously, insurance carriers and medical providers often prohibited sharing the data. Sorry, you can’t look at your own data, even though you’re paying the bill, insurers have been telling employers. No more.
4C’s data team said during their presentation that they are using the new law to obtain health plan data on behalf of their employer-clients. Then they run it through their analytics platform to identify billing and adjudication errors and excessive carrier fees. 4C’s team said they are identifying millions of dollars in overpayments and questionable fees for employers, and helping the employers recoup the money.
Other vendors and employers are doing similar data analytics, and more will be coming on board.
Those are my five reasons why I believe meaningful change is in the works now. Employers and their advisors are being empowered with the data they need to bring about true reform – and they’re being held accountable as they never have been before.
Employers and advisors: Let’s work together to empower your employees
I’m looking for disruption-minded employers and benefits advisors who want to embark on a pilot project with me. Let’s equip your employees to navigate the health care system with my Never Pay Pathway health literacy videos.
The videos are based on my book, "Never Pay the First Bill,” which is showing patients how they can save hundreds or even thousands of dollars per health care encounter. My vision is to make employee health literacy an essential part of employer sponsored health plans.
Sound interesting? Let’s make it happen! Email us at neverpay@marshallallen.com.