With the flurry of consulting firms, insurers and brokers launching a private health insurance exchange in recent years, keeping track of their product offerings and services can be daunting. But a group of business coalitions is offering employers a way to navigate this complex and rapidly changing marketplace equipped with unbiased information.
The Private Exchange Evaluation Collaborative is a joint effort by PricewaterhouseCoopers, the Employers’ Health Coalition, the Midwest Business Group on Health, the Northeast Business Group on Health and the Pacific Business Group on Health. It will provide employers with a database of information on leading providers’ products, services, capabilities and administrative requirements so that they can comparison shop, officials said.
In the past year, four major human resources consulting firms — Aon Hewitt, Buck Consultants, Mercer and Towers Watson & Co. — have launched private exchanges. This has created concern among some employers that consultants might not always be objective when advising clients on their benefits strategies, said Mike Thompson, a New York-based health care practice leader at PricewaterhouseCoopers.
'As a coalition we can provide some natural and objective guidance to help employers decide whether or not they should be part of this strategy.'
—Larry Boress, president and CEO of the Midwest Business Group on Health
“It was becoming readily apparent in talking with employers that their traditional consultants were becoming conflicted,” he said. “Employers were concerned that their traditional advisers weren’t capable of being objective because they had a horse in the game.”
Thompson said that the collaborative conducted a survey to determine what employers expect from the exchange and plans to announce the results at the end of November. An initial evaluation of the exchanges is expected by year’s end.
“As a coalition we can provide some natural and objective guidance to help employers decide whether or not they should be part of this strategy,” said Larry Boress, president and CEO of the Midwest Business Group on Health, a coalition of large employers based in Chicago. He said that the private exchange market is complex, and employers are uncertain about jumping in.
“Exchanges have a lot of hidden costs,” such as a pharmacy benefit manager. “It’s not all very clear right now. The No. 1 question I hear is, ‘Why would I want to do this?’ ” Boress said. “People want to know, is it really going to save me money? They want to know the rules of the game. As a coalition we can provide some neutral and objective guidance.”
Thompson concurs that many employers are on the fence when it comes to private exchanges.
“They aren’t convinced that what is being offered will deliver, but they are intrigued enough that this could be a dramatic change in how benefits are delivered. We are in the early days. There’s a lot of wait and see.”