Archive for October, 2010
OPEN LETTER TO CEOs: PART 2 – YOU MUST DRIVE HEALTH CARE STRATEGY
HOW TO DO IT
Dear CEO:
In Part 1, I wrote about why you must take the lead to drive a new health benefits strategy for your company. Now, I’d like to talk about both the short- and long-term components of that strategy.
Short-Term: Turn your employees into savvy medical purchasers.
1. Implement universal High-Deductible Health Plans (HDHPs). Your current rite of annual, bit-by-bit increases in deductibles and copayments is like cutting off a dog’s tail an inch at a time. Stop doing that. Move all your employees now to HDHPs and health savings accounts (HSAs). Ideally, implement the maximum medical-cost-sharing allowed by the new health reform law (i.e., same as current HSA maximums of $5,950 for individuals, $11,900 for families), and get rid of all fixed-dollar copayments in favor of deductibles and coinsurance to communicate actual medical prices.
2. Maintain employee premium contributions. Despite the much lower premiums for the new HDHPs, don’t reduce employee premium contributions. Keep them at current levels.
OPEN LETTER TO CEOs: PART 1 – YOU MUST DRIVE HEALTH CARE STRATEGY
WHY YOU MUST DO IT
Dear CEO:
Reality check
It’s time to face the hard truth. For too long, you’ve sidestepped the issue of soaring health insurance costs by handing the problem over to HR managers who lack the means, motivation, or strategic authority to fix it. As a result, your company’s standard coping mechanism has become an annual ritual of hiking employee deductibles, copayments, and premium contributions to defray the costs of an increasingly unaffordable benefit. Such actions—all under your nominal stewardship—amount to nothing more than tactical responses to a strategic problem that demands a strategic solution. I know you don’t want to hear this, but you’re the one who has to drive that solution.
HOW HEALTH REFORM CAN WORK: PART 5
THE CHALLENGE
Despite deep flaws that will have to be corrected, the Patient Protection and Affordable Care Act (ACA) has three aspects that make me optimistic about medical entrepreneurs being able to surmount the law’s barriers and create a consumer-dominated, market-based system of medical care and health insurance that will ultimately deliver high-quality, affordable medical care to everyone:
1. The creation of consumer value
2. The rise of high-value local health plans
3. The achievement of effective disease prevention
Recap
In Part 2, I discussed the creation of consumer value as an unplanned result of ACA’s forcing individuals—and not their insurers—to pay for their normally consumed medical services. In Part 3, I described how new local health plans built around these providers will be able to displace national PPO-based carriers by creating a virtual cycle of ever higher medical quality and constantly improving affordability. In Part 4, I addressed how these innovative health plans can dramatically move the needle on effective disease prevention. In this concluding installment, I’ll talk about the challenges facing the innovators who will be responsible for achieving these benefits.
