Improving healthcare and benefits delivery in the US has been such a drawn out, slow moving process that, at times, progress feels like sitting in gridlock on a family road trip during the hottest day of summer. As we begin 2023, I feel like the tired child in the backseat loudly pleading, “are we there yet?”
As 2020 set in and employers entered the initial fog of the pandemic, the safety of their teams became paramount. By the second quarter of 2020, companies had become more responsible for the health and well-being of their employees than ever before. They needed to react swiftly; the benefits package became a clear place to initiate change, with benefits like telemedicine and mental health becoming top priorities.
The increased focus on building out benefits packages brought about an “additive” approach. The question became, “what is our benefits package missing?" As companies added benefits and employees were introduced to new services, they felt more heard by their employers, but not all employees adopted them.
As we move on from the pandemic and the economy continues to perplex the market, those same benefits teams are feeling pressure to cut costs. That’s hard to manage without making employees, even the ones yet to adopt the services, feel like something is being taken away. How can employers lower costs without removing benefits solutions? By focusing on delivering better healthcare value.
When employers initially considered solutions, vendors presented lucrative savings projections and major improvements in the health outcomes of their teams. But are the solutions they selected actually driving the results they were promised? Does the data back up the projections with demonstrable results? How much value has been generated?
To answer those questions, employers must shift from an additive approach to a value-driven approach. This requires employers to evaluate each of their benefits solutions based on the value it’s creating and deliver unique benefits strategies that meet the total well-being needs of their employees. Evaluating every vendor may feel daunting, but it shouldn’t be. It’s data that employers should feel empowered to request and vendors should be eager to provide.
So why now? Beyond the cost-cutting implications caused by the current economic climate, the last five years have introduced a major influx of refined benefit models. Until now, many legacy solutions have forced employers into “vendor-first” delivery models: models designed to prioritize value-generation for the vendor over the employer. In a recent interview, Jordan Feldman, co-founder and CEO of Rightway, told Jessica DeMassa of WTF Health that we are at an inflection point in employer-sponsored healthcare. Employers are starting to see that many of the newer solutions were founded as “client-first” models: models designed to optimize for value to the client and their employees, which translates to meaningful financial and better healthcare outcome-based results.
We see this all over the healthcare landscape, including the two sectors we focus on: care navigation and pharmacy benefits. Legacy care navigation services maximize their profits by using a large call center model, complete with automated IVR and bot-driven technology. If an employer wants to include clinical services, they must often work with certain partner carriers or TPAs, partners that give these vendors preferred pricing. On the contrary, a value-driven care navigation platform prioritizes the members’ needs, using technology to enhance the member experience rather than to cut costs. Both types of solutions call themselves “care navigation,” but the delivery of their services varies greatly, as does the impact they make.
Similarly, legacy “Big Three” PBMs have exploited a vendor-first value model to an alarming degree: they drive towards their own assets, they require exclusivity, and they push off-the-shelf solutions to maximize their profitability. New PBMs are employing entirely different models, focusing on cutting costs for employers through transparency, flexibility, specialty pharmacy management, clinical rigor, and member support. With scrutiny from the media and the federal government at an all-time high, some employers are starting to realize that the models their PBMs are using are not serving them and have begun to seek alternate arrangements. But other employers are so afraid of the “Big Three,” their relationship with them teeters on the verge of Stockholm syndrome: they’re sympathizing with the “Big Three’s” tactics while convincing themselves that these convoluted PBM models are in their best interest.
Will 2023 be the year that employers start demanding better healthcare models? Will we finally buck the norm of outdated benefits solutions that have been asleep at the wheel, collecting their monthly margin while delivering meager value?
This is a call to action and a plea to decision-makers across the country. It’s time to say, “enough is enough.” Better healthcare benefits solutions are out there. Solutions that have been working hard to put your needs and the needs of your people first. Deploy your team and advisers to evaluate innovative approaches that have been creating meaningful value for the organizations they serve.