In the 1993 movie, “Groundhog Day,” actor Bill Murray plays a Pittsburgh TV weatherman who finds himself in a comical time loop while covering the annual Groundhog Day event in Punxsutawney, PA. Murray’s character wakes up each day to relive February 2 and eventually learns how to use his prior-day experiences to make a difference within Punxsutawney. But it takes him many, many attempts and frustrations before he realizes he must re-examine his life and priorities before he can make desired progress.
I was recently approached by a very large Iowa organization interested to know my ‘take’ on the next phase of employer-based health coverage. Specifically, I was asked how to break the endless cycle of doing the same things over and over again to control health costs – as current attempts seemingly do not move the cost needle.
This particular organization assuredly represents most employers when it comes to the frustration of offering health coverage to their workforce. Much like the Murray character, employers continue to relive their renewals, year-after-year, only to repeat past practices that invariably result in a similar and familiar fate. A handful of these annual activities typically include the following:
- Changing insurance companies or third-party vendors, including pharmacy benefit managers, wellness vendors, insurance brokers, etc.
- Increasing employee cost-sharing components, such as deductibles, co-payments and out-of-pocket maximums
- Limiting (or expanding) provider networks
- Embracing consumer-driven health plans
- Converting to a new financial mechanism to pay for coverage, such as self-funding, partial self-funding and a host of other hybrid funding arrangements
To avoid repeating similar (and predictable) results from these practices, employers should take a page from Murray and re-examine their priorities. Here are three ‘takes’ that I shared with this particular organization:
Employers Must Recognize and Accept that Preventable Medical Mistakes is a HUGE Problem
Employers should not assume employees and their family members will consistently receive safe and appropriate care from the local provider community. Even the best and most prestigious hospitals are not immune from committing these errors. Preventable mistakes are VERY costly, both in lives and in money. According to the Robert Wood Johnson Foundation, poor quality-of-care costs employers at least a third of the single-health premium. In Iowa, this would conservatively amount to $1,850 per employee each year. The social costs due to preventable medical errors dwarf this amount.* Just as importantly, eliminating preventable mistakes will also result in employees and family members living healthier and more productive lives.
Insist that Patient Safety becomes a PRIORITY
In the past, employers have relied on healthcare providers and insurance companies to control costs and quality, assuming that patient safety was naturally baked into the services we purchase. Yet, employers unknowingly pay for medical errors – albeit at the lower-negotiated fee available through insurers – but such discounted ‘savings’ are eventually negated due to paying for undocumented preventable mistakes. Employers and employees (not insurers) are the ultimate payers for this wasteful and unnecessary cost through higher insurance premiums. And, because of this, they must insist that new health plans deny payment for preventable medical errors. At the very least, this should be a minimum requirement. Few private plans attempt to do this, primarily because they have scant metrics to detect these errors. How would they know?
Require public TRANSPARENCY from local providers
The word ‘transparency’ has become an overused word – especially within healthcare. But for the ultimate payers of healthcare (employers and employees) to determine the value they receive from the ‘investment’ they make, the provider community must enter the 21st Century and demonstrate their value by publicly reporting comparable and usable safety information. This should also be a minimum requirement.
Offering and paying for expensive health insurance coverage year-after-year is the ‘Groundhog Day’ confronting frustrated employers. Unless a new mindset takes hold in the employer community that can forever alter our perpetual ‘Groundhog Day,’ very little will change in our ‘town’ of Punxsutawney.
*Additional details to follow over the next month.
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