By Evan Falchuk
I was interviewed today by Employee Benefit Adviser, one of the leading publications in the employee benefits market. I spoke with EBA’s Editor in Chief, John Ortman about trends in the health care market, problems with the quality of health care around the world, and, of course, Best Doctors.
The podcast is here.
By Evan Falchuk
Fortune magazine has made some news recently about the impact of health care reform on large employers:
Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill’s critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.
The only trouble? There’s no way these employers are seriously thinking about doing this.
By Evan Falchuk
I gave a speech yesterday at the Midwest Business Group on Health’s 30th Annual Conference. The MBGH is one of the country’s leading organizations on health care, and its members include the leading innovators and thought leaders on health care in America. It was a privilege to present to them.
I spoke about why health care just isn’t a consumer business, in spite of all of the efforts to turn people into health care “consumers.”
Read the text of my remarks below the fold, it was a very interesting day.
By Evan Falchuk
Giving people “incentives” to spend their money wisely is a growing part of the solution to rising health care costs. Give people financial responsibility for their health care decisions, the thinking goes, and they’ll make cost-effective choices.
It’s usually done by having people pay part of the cost of their employer-provided health coverage, and through things like higher deductibles and co-pays. Today, on average, people in the private sector pay 20% or more of the cost of their coverage. The trend is for this number to go up.
But it’s not true everywhere.
If you look in the public sector you see a different, more troubling story. It’s a lesson in what can happen when incentives go wrong in health care. (more…)
By Evan Falchuk
Over at The Corner, Ramesh Ponnuru theorizes that people want more control over how they spend their health care dollars:
[Ezra] Klein’s argument is that if employees understood that the employer’s alleged share of their health-care costs are really part of their wages — and if they saw it on their paychecks — they would be more supportive of cost control. I agree with that. But I assume he means (based on his examples in this op-ed) that they would be more supportive of cost controls imposed by HMOs or Congress. I think they would be more inclined to favor turning over control of health insurance from their employers to themselves, and making the cost-quality trade-offs for themselves with their own money. Under the status quo, those trade-offs are made by other people and the fact that it’s the employees’ money is obscured.
It sounds nice in theory. But in practice it seems to be exactly wrong.
By Evan Falchuk
The strangely out-of-touch comments by proponents of reform legislation continue.
Yesterday, Christina Romer, the head of the President’s Council of Economic Advisers was asked about the proposed excise tax on so-called “Cadillac” health plans. Romer said:
Part of the idea of how that is going to work is precisely because it does empower consumers. It empowers each of us to have an employer-sponsored plan to call our HR office and say, ‘Would you negotiate harder? Would you think about (whether this) is the most efficient plan out there, because I don’t want my plan paying an excise tax.’ So I think that’s something that is very much empowering consumers.
It’s a bizarre statement. Roemer has impressive academic credentials, but this kind of statement betrays a profound ignorance of how employers actually buy health benefits. She’s not the only one with such strange beliefs.
So, let me make it simple.
Companies across America use skilled and experienced benefits professionals to design and implement their health plans. The bigger the employer the better they are at this. In fact, big employers are such smart negotiators that they manage to get the services of the insurance companies without paying them a dime for health insurance. It’s true: they just use the insurance companies to mechanically pay for the cost of their employees’ care, which comes out of the pocket of the employer.
Now, the smaller an employer is, the more difficult it is. If you’re a company with 20 employees, your problem isn’t whether you are any good at negotiating. It’s that you probably live in a state where one or two insurance companies dominate the market. Your choices are limited, and because you’re too small to self-insure, you need to buy insurance from one of them.
But it’s worse than that. State laws make it so that even if you were to try to “negotiate harder” (whatever that means), there isn’t much the insurance company is allowed to do.
So what is Professor Romer talking about? Frankly, I have no idea. So many reform proponents in Washington have never run a business or designed a benefit plan, so I’m becoming less and less surprised when they come to strange conclusions about these things. But what doesn’t help is that they seem to prefer to spend so much time behind closed doors in Washington, or on TV, and so little time out talking to people actually in this business to see what works and what doesn’t.
This is hubris. And it bodes very ill for the likelihood that plans coming out of Washington are going to make things better and not worse.
By Evan Falchuk
A new poll by NPR, the Kaiser Family Foundation and the Harvard School of Public Health asks how health care reform is playing in the public.
The answer: really badly. How badly?
Almost no one thinks Congress is listening to them. You could have predicted that self-described “conservatives” would feel that way, 79% of them said that. But what about self-described “liberals,” they should feel pretty good, right? Not exactly. Seventy-three percent of them said the same. So “moderates” must be the happy ones getting all the attention? Nope – 64% of them felt that way, too.
What’s going on is something other than politics.
As I’ve pointed out many times before (like here, here and here) reformers are ignoring the lessons learned by U.S. companies about how people react to changes to their health benefits. Benefits executives who have been through it will tell you that doing anything that affects people’s health care is delicate business. They know that you had better be awfully sure you know what you are doing, and that you explain your plans in simple, clear, understandable ways. They’ll tell you that if you don’t do that, even the most well-intentioned, thoughtful plan will go awry.
So far this is exactly what has happened. There are multiple proposals, thousands of pages of legislation and a never-ending variety of mixed and changeable messages as to what reform is all about. It’s precisely what you should not do if you are trying to implement even the smallest change in your benefits program. It’s a recipe for alienating everyone involved, even those who would otherwise be supportive of what you are trying to do.
To be fair, all of this work has accomplished something. In spite of all of the complaints we hear about how politicians focus too much on polls, Congress has gotten the public to change its mind.
Fifty-six percent surveyed said Congress needs to pay more attention to public opinion polls.
UPDATE: This video of Senator Thomas Carper of Delaware explaining why no one should want to read legislative language illustrates the kind of disconnect I’m talking about. According to Carper:
When you get into the legislative language, Senator Conrad actually read some of it, several pages of it, the other day and I don’t think anybody had a clue–including people who have served on this committee for decades–what he was talking about. . . . So, legislative language is so arcane, so confusing . . . and it’s just, it really doesn’t make much sense.
So, he’s against the Baucus plan? No, he’s actually arguing in favor of it, even though he hasn’t read it, won’t, and doesn’t think whatever it will say will be understandable. Now, in the corridors of the Senate this may be a perfectly reasonable point. But to the average American, hearing that your health care is going to change in ways no one understands is not comforting. It might even make you believe stories about nasty provisions being snuck in there that no one knows about.
By Evan Falchuk
AllBusiness’ Nancy Germond writes about health care quality in her Risk Management for the 21st Century column. Best Doctors gets prominent billing:
Employers are buying Best Doctors services as an employee benefit to ensure their employees receive a higher quality of medical care, according to Falchuk. “If you feel unsure about your diagnosis or treatment, you are entitled to feel confident.”
Also, at Wired magazine, Curtis Silver interviewed me for his blog, Geek Dad. We talked about using social media in business and how important it can be for your family, too.
Everyone struggles with work-life balance. We care deeply about our business and our families. And the realization is this: you have as much of a moral obligation to build a successful business as you do to build a successful family life. Technology and social media help make this possible. I wish more people saw it that way.
In both cases, read the whole thing.
UPDATE: The Wall Street Journal reviews my brother’s new TV show, Glee. They like it.
The Boston Globe, too, with a mention of Best Doctors and the work we did to help my brother with his health crisis last year.
By Evan Falchuk
Bad news in the paper today: health care costs are expected to rise another 10.5% next year. It’s a serious problem that affects businesses and families across the country.
But the headlines miss something important: the rate of increase has been steadily slowing.
Are we already bending the health care cost curve?
By Evan Falchuk
As I’ve blogged about before (here, here, here and here), a big reason reform is going so badly is this: Reformers don’t understand how people react when you try to make changes to their health benefits.
Companies across America have been making changes to health benefits for years.
Reformers seem to have ignored the lessons of their experience.
