We all know the problems. Rising costs despite declining value. Overutilization. Inadequate and impersonalized access. Lack of marketplace transparency.
Pardon the pragmatism, but we aren’t going to tweak the current, broken model and make it successful. It’s time for a total reset.
Whether due to legal obligation (large businesses), or due to the need to attract high value employees (small businesses), employers are pretty much forced into providing healthcare benefits. In fact, healthcare benefits are the second largest business expense for many employers.
Whether you like it or not, you are in the healthcare business. Employer-sponsored healthcare is the norm for people of working age. Why not redefine how it’s done? It’s broken, so let’s fix it. Together.
The current system is out of control. There are so many fingers in the pie it is downright absurd. Healthcare is a huge industry. If you're a vendor, supplier, or service provider, you can make a lot of money by having your finger in the pie of an industry that is highly regulated and mandatory. And that's exactly what's happening.
Employers are forced to provide compliant health insurance policies for their employees. Those policies are outrageously expensive and cost the employee a lot to use (copays, deductibles, and coinsurance). Yet, despite all the money being thrown at it, the value people derive from healthcare services is on the decline, according to the Commonwealth Fund and the Kaiser Family Foundation.
We have a lot of expensive technology, and we’ve got the highest cost healthcare system in the world, but Americans are very unhealthy, with a lower life expectancy and higher rates of suicide and chronic disease than other nations. High cost, low value. Our health systems are monopolized, so competition for cost and value isn’t the norm as it is in other industries. High cost, low value. We have a system where utilization is controlled by a third party (insurance carrier) and managed by many (billers, claims evaluators, etc), but those actually involved in receiving and paying for the service (patient and employer) are often not in control. High cost, low value.
The fix? Eliminate third party involvement in primary care. The financial transaction is exclusively between the patient, doctor, and employer. No need for insurance claims, billers, and all the other people involved in management of third party transactions. Employees have improved access to primary care and use emergency services 40% less, decreasing overall healthcare costs. Lower cost, higher value.
Medical decision-making is often made based on what is covered by insurance in the fee for service (FFS) model, where providers are paid for services rendered. But should it be? Consider where the medical industry gets most outcomes data. Research (especially that part done for FDA approval) is done by pharmaceutical companies, and venture capitalists. I don’t know about you, but I see a huge conflict of interest there.
Many commonly accepted and insurance-covered medications and procedures, including specialty medications and surgeries, are really not that helpful or necessary. Overutilization is a huge issue for employers. These are huge contributors to the overall cost of healthcare but have not been shown to be of high value for many patients who receive these treatments, especially if delivered in a setting that isn’t well equipped.
The books Unaccountable (Makary, 2012) and The CEO’s Guide to Restoring the American Dream (Chase, 2017) address these issues and are highly recommended reading for businesses who provide healthcare benefits to their employees. More than information and data, these books are a wake-up call and a behind-the-scenes look at why employer-sponsored healthcare is increasingly unaffordable.
And what about a visit to the Emergency Room for something that is not really an emergency? That happens all the time. It’s expensive, inefficient, and invaluable to use high cost intensive care settings and treatments when something less expensive, less invasive, and more preventative will work better. Asthma is a common reason for ER use that can most often be managed in the primary care setting. The average cost in the ER is $1502, but the same treatment in the doctor’s office is less than $200.
Fee for service (FFS) rewards providers, vendors, and everyone else with a finger in the pie for increased utilization. More business equals more revenue.
This in no way means to disparage doctors who operate in the FFS system. It is what it is. In most cases, providers are just trying their best with the tools they have available to them to help their patients get well. Yet, the growing rate of burnout and suicide among physicians is alarming, and the system needs to change for them, too.
Table Health and its founders are grateful and have great respect for our healthcare system when it comes to evaluation and treatment of emergencies and other acute illnesses. Our system excels at getting the job done when someone’s life is hanging in the balance. And it is believed, at least in part, to be due to private investment in industry and the financial rewards inherent in such a system. So despite earlier comments, we don’t disparage the process.
We just don’t want to exclusively rely on this process for all types of healthcare, especially that which is common sense and preventative in nature, and which does not require technology for healing.
The fix? Place the burden of controlling utilization on the provider and patient with a membership based primary model at the center of the plan. Employer sponsored membership-based healthcare is where the employer pays an affordable monthly fee directly to the primary care physician. That fee pays for all of the care the employee or member needs, with no copay and no deductible. This model ensures no financial or time barrier to access for the member, so there is less use of higher cost services, and overall costs decrease. Physicians are mindful of cost because they are not rewarded for increased utilization. Lower cost, higher value.
High touch, high value, easily-accessed primary care has been shown to reduce overall healthcare costs and result in higher patient satisfaction. But despite knowing this, what have we done? We have created plans with high deductibles with copays at the primary care level, and we have overloaded primary care physicians with high volume practices, often with 3500 patients or more, with little time or availability, and a lot of burnout.
Despite the obvious and well-studied importance of high quality primary care, we have placed financial barriers and actual access barriers between employees and their primary care providers. This results in lack of true relationship-based preventative care, and it results in desperate, last-minute use of higher cost care settings like urgent care and emergency departments of hospitals where nobody knows your name.
The fix? Membership-based direct primary care physicians have smaller patient panels (usually 500-600 instead of 2000-3000), which allows them to know their patients better and be more available. Physicians can take time to listen during longer appointments, and patients wait less. Services are more robust, delivered on site, and patient satisfaction and convenience is high. Lower cost, higher value.
From a patient’s perspective, it’s almost unheard of to know the actual cost of a service until it’s obtained and billed to insurance. This applies to doctor visits, labs and other diagnostic services, procedures, and medications. The insurance gets the bill, applies the rules, and the patient gets the bill (sometimes many bills) for what they have to pay weeks and even months afterward.
From a physician’s perspective, it’s nearly impossible to keep up with the details of all the insurance policies their patients have, so they can’t often advise patients about the cost of any service or whether or not it will be covered or paid for by insurance. Their billers often don’t know, either. Additionally, physicians are shielded from knowing the cost of what they order for their patients. Insurance companies have contracts with health systems where labs, x-rays, and other diagnostics and procedures are often obtained, and it can be difficult to find information about cost.
There are also a lot of deals going on behind the scenes that employers, employees, and physicians are not in on, but that's beyond the scope of this article. Read the books I recommended for an eye opener.
The fix? Total financial transparency, which is possible with direct, cash-based service models. The doctor knows how much his or her services, labs, and medications cost and communicates it to the patient. The patient knows how much services or procedures cost before purchasing. The employer knows how much all the services they will be paying for costs.
The membership-based Direct Primary Care (DPC) service model embodies all these fixes, and has delivered amazing results across the country when used in employer-sponsored plans.
DPC is a growing movement driven by individual physicians who are fed up with the current system and want more for themselves and their patients.
DPC is membership-based, so costs are predictable and known up front. Many DPC practices have lab services and dispense medications right on site for much less; and most have an expanded level of services available compared with other primary care offices.
There is no interaction with third party payers in a DPC, which means incentive pay and its scourge of documentation and nonclinical decision-making is a non-issue. Billers and other extra staff are not needed, which reduces overhead and ensures relationship-based care between patient and doctor.
DPC is high value, low cost primary care, delivered by physicians who aim to make a difference in their industry.
Some DPC practices have the desire and infrastructure to work with employers, recognizing data and cost containment are important.
At Table Health, we have started at square one to redefine healthcare with transparency, authenticity, and value, with DPC-based comprehensive plans for businesses of all sizes.
Find out today how you can achieve higher value, lower cost primary care for your company.
Healthcare and health insurance are different. Completely different. Yet we confuse these two ideas and often use them interchangeably. Let’s explore the differences, starting with a very brief history of health insurance in America. (A less brief history can be found here.)
A century ago, almost nobody had health insurance. They didn’t need it, because healthcare costs were minimal, affordable, and hospital care was inexpensive. As hospital care became more advanced and expensive, insurance for hospital care grew to become the norm.
By the beginning of the 21st century, most Americans had health insurance, and coverage was quite broad, for outpatient services and rehab as well as hospital care. Today, we have broad mandates and regulations governing health insurance, and healthcare costs have skyrocketed, being a significant portion of household income and being a huge factor in many bankruptcies.
Back to the topic at hand. Healthcare and health insurance are different.
Historically, health insurance was meant to be a method of risk sharing when something big and bad happened. American employers began providing health insurance for employees at a time in history when they were competing for high quality employees and raising wages wasn't an option. (See details here.) It was a lot more straightforward then.
Even now, whether you are a self-funded or shared funded employer with a big business and it’s mandatory to provide insurance or meaningful coverage, or whether you are a fully funded small business voluntarily providing health insurance for your employees, the fundamental idea is the same:
Straightforward and easy to implement.
But somewhere along the line, we began thinking that ALL of our healthcare had to be covered by insurance - quick visits with the doctor, preventative care, routine medications, and the like. And voila! Overnight, health insurance became thought of as a necessary means to access healthcare.
So often people (doctors and patients alike) make a healthcare decision solely on the basis of whether or not it’s covered or paid by health insurance. Somewhere along the line, we collectively started thinking we can’t pursue healthcare if we don’t have access to a particular service through insurance.
And this kind of thinking is really taking its toll on employers, who are funding most healthcare for working age Americans.
Health is what you do for yourself to stay well. It’s getting your sleep, your nutrients, your exercise, your stress management, your social needs met. Healthcare is when you seek the services of a healthcare provider in order to help you with your health.
Sometimes little things go wrong and you need your doctor’s help - strep throat, a cut that needs stitches, an ankle sprain. That’s healthcare. Sometimes you’re fighting something more chronic and you need a little more of your doctor’s help - high blood pressure, anxiety, arthritis. That’s healthcare. Occasionally, something happens and you need to be hospitalized, have surgery, and see a few specialists - pneumonia, heart attack, joint replacement. That’s healthcare, too.
It can be said with fair certainty most employers want to help their employees achieve excellent healthcare.
The question is, does it make sense for all healthcare to be administered through insurance? Or does the old model of risk sharing for larger expenses make more sense?
In the case of a high deductible plan when all healthcare is subject to and managed by insurance but isn’t actually paid by the plan until the employee meets their deductible (which most don’t), does using insurance add more roadblocks and expenses than the value derived from it? Does it actually aggravate the process of seeking affordable routine healthcare?
Despite all the money being thrown at it, the value people derive from healthcare services is on the decline, according to the Commonwealth Fund and the Kaiser Family Foundation. So it’s not just employers feeling the burn. Their employees’ families are feeling it, too, with skyrocketing out of pocket costs for healthcare.
Could it actually be more affordable, streamlined, and convenient to pursue routine outpatient healthcare without insurance?
As a means to answer these questions in a very real way, let’s look at what it might look like if your homeowner’s insurance worked like your health insurance.
First of all, all the roofers, plumbers, and builders would be very happy, and a lot of work would get done, whether your house needed it or not. They might offer to do expensive repairs that may or may not work, and you might agree to it, because you aren’t paying for it and these kinds of repairs have become commonplace.
In the healthcare world, that’s called overutilization, and it happens a lot. In a fee-for-service system with third party payers, everyone benefits from you using a lot of services and being “in the system”. (By everyone, this means providers, pharmaceutical companies, hospitals, insurance companies, agents, medical IT companies….the list is frighteningly long.) The only people who pay more are employers and you.
Now let’s say you have a leaky faucet in your kitchen sink and can’t figure out what’s causing it. You’d call your in-network plumber to come and take a look. He comes over a few weeks later - you miss work to meet him at your house. He diagnoses the problem.
Turns out it’s just a corroded washer. The plumber also recommends changing the out of date faucet. He doesn’t tell you this, but the plumber doesn’t get paid his incentive bonus if he leaves the old faucet in place, because those old ones aren’t in the current guidelines. A study done by the faucet manufacturer shows the new ones to be statistically significantly better at not leaking.
Now you have to call your homeowners insurance company for prior authorization for the recommended washer and faucet. After some phone tag, and after your plumber’s office sends in paperwork proving the necessity of such products, the insurance company sends your auth to the nearest in-network hardware store, which is a terribly big store with poor customer service and not in your neighborhood.
The store would call you for an appointment. It’s in three weeks, and you’ll have to miss work for it. When you go to the store to pick up your supplies, you’ll have to fill out a bunch of paperwork and then wait for an average of 47 minutes before having access to your products. And only certain faucets are covered by your insurance, but you’re not sure which ones those are, and your plumber and the store employees don’t know either. Also, there are no prices on the faucets or washers. You have to purchase them in order to find out how much they cost.
Once you decided on a faucet, you’d pay a small amount at checkout (your copay), but the store wouldn’t give you the final bill until after they sent a bill to your insurance company. This takes a long time, about 60 days. You haven’t met your deductible yet, so even though you chose “covered” products, you have to pay the whole cost for the washer and faucets. You’re floored at how much they actually cost - the price has risen dramatically in the last decade - and are totally unprepared to pay the whole amount.
Meanwhile, you’re supposed to meet the plumber a few days later at your house at noon. You leave work at noon and rush home, just in time. Boss isn’t happy about a third missed workday for this problem. The plumber is an hour late. By 5pm, you finally have a new faucet.
The plumber’s biller sends his bill to the insurance company. They hear back several weeks later. The biller then sends a bill to you. Turns out your deductible still hasn’t been met, so now you’ve also got to pay for the two house calls the plumber made. Again, you’re surprised and disappointed about the high cost. It doesn’t add up, but when you ask him, the plumber tells you he needs a lot of extra staff to work with your insurance company.
You and your spouse argue about how to pay the plumber and the store, the escalating premium for the homeowner’s insurance, and still pay the mortgage too.
Sounds insane, right? But this is exactly what we do when we confuse routine healthcare with healthcare insurance. We let our health insurance manage our healthcare.
You have homeowner’s insurance for when something bad happens - a storm drops a tree on your roof, a theft of all your valuables and identity, a big plumbing leak that soaks your entire house. When these things happen, you get help paying for the big bills because you’ve been paying your homeowner’s insurance faithfully, and it’s affordable enough to keep doing so. The underwriter essentially administers risk sharing for its customers.
For routine home maintenance and small repairs, you just pay out of pocket to stores and service professionals that bill you directly, not through your insurance. And you do it on your own time. It’s both convenient and affordable.
Health insurance, while it’s nice to have when the wheels come off the bus, is crazy expensive. Modern policies have broad “coverage” (in quotes because “covered” doesn’t mean insurance is going to pay). In fact, most people with high deductible plans don’t usually meet their deductibles, so they have to pay for pretty much all of their routine care despite it being “covered” or managed by the insurance company.
When you’re the employer paying for this “coverage”, you wish your employees didn’t have to pay, too.
Also, routine healthcare, when run through insurance, is more expensive than direct pay services. If you haven’t met your deductible, you’re paying that aggravated higher cost for your day-to-day health needs.
When you’re the employer, you’re paying that aggravated higher cost.
What if we moved toward a more straightforward model of healthcare? What if your business had a direct and affordable financial relationship with your employees’ healthcare providers and for routine services like medications and labs? What if you only had to use healthcare insurance when something big and bad happened?
You don’t have to ask anymore, because it’s a reality. Table Health was created so people could pursue excellent primary healthcare without all the fuss and expense, and so primary care doctors could do what they do best without all the distraction inherent in working with insurance. When a conscientious referral is needed, then health insurance or medical cost sharing is there.
Full access, membership-based primary healthcare is at your fingertips. Learn more at today!
Affordable options exist for both small and large businesses. And don’t worry, we get you. We know you need transparency, data, and compliance. We are employers ourselves, seeking the best for our own company’s workforce and understanding the unique challenges faced by employers.
It’s important to keep in mind that health insurance is not the same as healthcare. We’ve come to use the terms synonymously, but they are very different. Everybody needs healthcare. But pursuing it doesn’t necessarily have to mean doing it like you’re doing it today.
Health is personal. Managing and financing it should be, too. To get more information for you, your family, or your business, or just to chat about options you might not know existed, reach out today.
Don’t settle for higher cost and lower value. Your business and the people in it are far too important. Redefine how your company does healthcare.