Bring us your overweight, double cheeseburger eating, lazy, smoking, drug/alcohol abusing employees and dependents…

Why your group health insurance really keeps going up!

You may be thinking:

  • Physicians income and lack of efficiency – So What?
  • Increasing drug prices – So What?
  • Insurance company profits – So What?

While these factors certainly contribute to your increasing premiums, they have been debated for at least the 20 years that I have been in the healthcare industry with no resolution.  The only potential solution was that government could do a better job and we all know how that worked out..

You are successful at business because you control the controllables.  In my experience, there are two ways to manage your healthcare costs.

  1. 7 out of 10 deaths are caused by chronic diseases – Effectively manage your sickest members that are driving the vast majority of your claims costs.  We all learned the 80/20 rule growing up and it isn’t that far off in terms of where your health care dollars are being spent.  According to the CDC, half of Americans have at least 1 chronic disease, such as diabetes, heart disease, cancer, etc. If your disease management program can embrace your employees and dependents with chronic diseases to reduce hospital stays and return visits to the hospital, they will be earning their money, which a topic for another posting.
  2. 70% – 90% of chronic diseases are caused by poor health choices – Lack of physical activity, obesity, poor diet, tobacco use, excess drinking and substance abuse are the key drivers in developing chronic diseases.  

If you really want to positively impact your health costs, I would ask myself two questions:

  1. Do I have the right wellness strategy?
  2. Is wellness and improving the health of your employees truly part of your corporate culture?

There are literally thousands of wellness companies out there and more than ⅔ of companies offer some type of wellness program, but that doesn’t mean that they are effective.  In my experience working with my clients and some of the largest wellness companies in the country is that many of them rely on self reported data and offer silly incentives that help clean out the corporate promotional items closet, but don’t do much for changing behavior and more importantly, reducing your healthcare costs.

In terms of culture, I have seen many times with my clients that while everyone wants to have a healthy, happy workforce, the #1 reason that corporate wellness programs fail is that there is a lack of support from the top of the organization to truly embrace wellness as a core value.  If you promote work life balance and leading a healthy lifestyle, but the unwritten rule is that you sit at your cubicle for 10-12 hours per day, your employees may be getting a mixed message.

I have had recent success with programs that leverage activity trackers such as Fitbit and Garmin, in order to create challenges among employees to exceed fitness goals while getting them fully engaged with their peers with leader boards and recognition.  

If you have ever wondered why the default on these devices is 10k steps per day, which is roughly 5 miles, the American Heart Association uses the 10k metric as a guideline to follow for improving health and decreasing risk of heart disease, the number one killer of men and women in America.  This is also consistent with the Surgeon General’s recommendation to accumulate 30 minutes of activity most days of the week to reduce your risk for disease and help you lead a longer, healthier life.  Studies have shown that the 10k day challenges can lower BMI, reduce waist size, increase energy and have less risk for Type II diabetes and heart disease.

For employers trying to do the right thing, an aligned wellness strategy can not only improve the health of your employees, but also drive improved morale and teamwork by engaging everyone to create and achieve their fitness goals.  The bonus is a more productive workforce that is truly engaged in working together to achieve goals.

Please leave comments on the topic and if you would like to discuss your wellness strategy further, please contact me at dsb@nl-hc.com or visit our website at https://nl-hc.com.  

My goal is to help you focus on growing business and having healthy engaged employees is a great place to start!

Derek S Bridges, CEO, Next Level HealthCare

 

Top 5 Things CEOs should worry about with TrumpCare

While everyone agrees that Obamacare was a disaster, there is high uncertainty as to what the replacement will look like. My biggest fear in its replacement is that in an effort to stabilize the individual market and ease the burden on insurance companies, it is at the expense of employer based coverage.

Here are the 5 things I would worry about the most while you are trying to offer competitive health insurance to your employees.

1. Potential taxing on health care premiums will make it more expensive to offer benefits to your employees – There is a general worry that Republicans, in order to raise money for the replacement plan, will be more than tempted to limit the exemption from income and payroll taxes that employer coverage has enjoyed for decades. The current exemption benefits individuals and employers, but critics argue that there should be an equal playing field to foster competition with government options. In addition, the current tax exclusion is $250B, which is the single largest tax break according to the CBO. It is also part of the reason employees don’t realize how expensive healthcare is for employers.

2. The “Cadillac Tax” isn’t being eliminated, just delayed – Under Obamacare, an employer excise tax of 40% is being introduced in 2020 for plans that cost more than $10,200 for individuals and $27,500 for families. The current proposal from the Ways and Means Committee would still impose the tax, but moving it back to 2025.

3. In order to make the economics work, Congress will have to find new or continued sources of revenue, most of which will be at the employer’s expense – Individual tax credits make care more expensive for companies – The insurance term is “adverse selection” and has been around for years and is the reason that it is so difficult to have association or cooperative plans. It is human nature that when you can get a better deal, you do it. In other words, when one of your employees can get a favorable tax credit for moving to the exchange combined with a discount for being healthy, they have a financial incentive to move away from the group plan. These are the same people that are offsetting your sickest members.

4. If 20MM people lose insurance, health providers must pass along the cost to someone that can pay – It is estimated that more than 20 million people would lose health insurance if the current replacement proposal passes. If you are a hospital and the percentage of patients with no ability to pay increases significantly, they must renegotiate their contracts with insurance companies. It would be great to think that a hospital or physicians could just be more efficient, but they have a lot of fixed costs. The easy answer for them in the short term is to ask for a 20% increase in their employer based contracts with the insurance companies. This means increased short term costs for employers that have the ability to pay.

5. Insurance companies must remain profitable- If insurers are losing money on their individual and exchange based business, trust me that they will find somewhere to make it up. Some companies such as Aetna and United are withdrawing from most of these markets, plans such as Blue Cross Blue Shield are doubling down on this business. Don’t confuse my message, insurance companies can’t and won’t lose money, but that doesn’t mean that they can avoid being competitive and taking better care of their members. In my experience, there is nothing more profitable than a healthy member, so as they begin to focus on the overall health of a member, profits will follow.

One of the primary reasons that fixing healthcare is so challenging is that it currently appears to be a zero sum game where one constituent must lose in order for others to win. So whether you are the patient, the employer, or the insurance company (which now includes the government), If you lower reimbursement too much, providers will stop participating, if you treat insurance companies like a utility, they will move to profitable markets, so the most stable group left standing is the employer, so watch out.

Next Level HealthCare believes that in order to make health insurance more affordable for everyone, the focus needs to be on improved outcomes for patients and leveraging competition and technology to make the system more efficient.

For employers, the focus should not be on additional regulatory paperwork and limited options, it should be the focus on growing their business with healthy, motivated, productive employees.

If you share any of these worry items, please contact me personally for a free analysis of your health reform readiness as well as your overall benefit package competitiveness or visit our website at www.nl-hc.com.

My goal is to help you focus on your business, by letting me focus on your employee benefits!

Derek S. Bridges
CEO
Next Level HealthCare
dsb@nl-hc.com
www.nl-hc.com