Investing in Employees to Invest in Health Care
There seems to be an endless quest to get employees to care more about their benefits. Explaining their importance is becoming increasingly valuable.
Executives at New York-based publishing house John Wiley & Sons Inc. tried with little success to get employees enthused about their benefits and health care, from a nurse hotline to a disease management program to an employee assistance program, but nothing seemed to spark interest.
The first year after its debut in the early 1990s, just 52 of Wiley’s 2,500 U.S.-based employees called the 24-hour hotline. Last year, just two employees called, despite the fact that many of the employees suffer from diabetes and other chronic conditions. Not surprisingly, the hotline was dropped. A disease management program came next. Only 12 people responded.
“One year we got it to 18, but 18 out of 2,500 isn’t much,” said Patrick Nevins, Wiley’s director of benefits. “While some of these programs sound good on paper, colleagues didn’t seem to be interested. We also have an EAP, and while people had positive things to say about these programs, not enough were using it.”
Employers like Wiley seem to be on an endless quest to get employees to care more about their benefits and health care, giving rise to a booming multibillion-dollar wellness industry and an array of online tools and gadgets that help workers track steps, choose benefits or pick a doctor. And yet, employee engagement remains a frustrating mystery to many employers. But finding a way to connect with employees is becoming increasingly important as companies usher in an era of health care consumerism.
‘It’s like you’ve been driving an automatic your whole life and now you’ve been given a stick shift.’
— Jim Skinner, president, JMS Benefits Solutions
Passive patients and apathetic employees who for decades chose their benefits on a sort-of autopilot mode now are being asked to start thinking like smart shoppers when it comes to their health care. The philosophy of following doctor’s orders and not knowing the true cost of an emergency room visit is giving way to informed purchases based on factors like price, outcomes and negotiation — much like buying a car. Experts say this is the future of employer-sponsored health care, but just how prepared employees are for this transformation is unclear.
“It’s like you’ve been driving an automatic your whole life and now you’ve been given a stick shift,” said author and consultant Jim Skinner, president of JMS Benefits Solutions in central Texas. Skinner founded the Smart Patient Academy, a division of his consulting firm that specializes in teaching employers and employees how to use consumer-driven health plans — high-deductible plans that were designed to give consumers more control over their health care decisions.
“The holy grail is employee engagement, because without it there’s no management of cost and no responsibility on the part of the consumer,” he said. “Corporations are shifting risk to their employees and giving them little in the way of tools. They might offer a price shopping service but that’s just one part of it.
“As soon as you get into a chronic condition, your focus on money starts decreasing and your focus on outcome starts increasing. And when you get into life and death you don’t give a damn about the money. You’re talking to different consumers with different perspectives, and employers need to know how to communicate with all of them.”
Despite the failed programs, Wiley executives believe they’ve begun to solve the problem in the form of an online tool called WiserHealth, which matches patients with treatments that are most likely to work. Wiley launched the cloud-based platform created by Washington, D.C.-based tech firm WiserTogether Inc. on Jan. 1, and in the first two months more than 450 employees had logged on, Nevins said. WiserHealth allows consumers to research medical conditions, find the treatments and providers with the best outcomes, learn how much it will cost them, and what patients with similar conditions have to say about the treatment, among other information.
“I believe that most of us are on information overload,” Nevins said. “Most of us just Google [conditions], and we’re not so sure about the reliability of the information we get.”
Nevins said that WiserHealth encourages employees to “become active participants in decisions about their medical care,” by understanding all their options.
So Many Choices, So Many Tools
The health care technology market is going gangbusters, and tools to help employees pick their benefits, find treatment options or compare prescriptions are flourishing. Here are a few tools from some of the biggest players:
Alex: Chicago-based Jellyvision, a developer of interactive online programs and games, released “Alex,” a virtual benefits counselor, in 2009. The program helps employees figure out which health plan best suits their needs. Last year the company introduced Alex Does Health Care Reform, which helps employers talk to their workers about how the Affordable Care Act might affect them and helps employees understand the basics of health care reform. It also lets employees know if they qualify for tax subsidies or special programs.
Castlight Health: The company’s database offers pricing information for elective procedures, high-cost diagnostic tests, specialists, hospitals and other types of care. The company recently launched a pharmacy app to help consumers shop for the best prices on medication. Since it was launched in 2008, the cloud-based health care management system has become the leading cost comparison tool with clients like CVS Caremark Corp. and Kraft Foods Group Inc. In March, the San Francisco-based software company made headlines with its nearly $200 million initial public offering, more than doubling its value.
Change Healthcare: Employees can search for a prescription or medical, dental or vision services based on their health plan, network or location. The online system provides cost comparisons and quality ratings and sends users a personalized alert to remind them of preventive screenings, manage their medications or find nearby providers that offer the best value. The Brentwood, Tennessee-based company, which was founded in 2007, recently launched Healthcare University, an online training program for employees to learn about their health benefits through videos, games and quizzes.
Healthcare Blue Book: Launched in 2007, this price transparency tool uses an algorithm to give users not just the range of available prices, but also an estimate of what a “fair price” is for a given procedure or medication, like the Kelley Blue Book for cars. The information is provided both online and through an app. The Nashville-based tech firm offers a free version of its search tool that anyone can use by entering a ZIP code on the company’s website. The premium version is available to consumers only through their employer or health plan.
WiserHealth: Dubbed the “eHarmony” of health care decision-making tools by the company’s founder, this platform helps users find the most appropriate health care for their particular condition based on their cost limitations and personal preferences. It also provides feedback from other people who were faced with similar health issues about how satisfied they were with their treatments. WiserHealth was developed by WiserTogether Inc., a Washington, D.C.-based company founded in 2008.
Shub Debgupta, the founder and CEO of WiserTogether Inc., describes WiserHealth as the “eHarmony” of health care decision tools. In fact, it was modeled after the dating service website, which uses an algorithm to determine compatible matches. WiserHealth offers information on the most effective treatments for a particular condition, like carpal tunnel syndrome, and surveys thousands of patients and doctors with the same condition about which treatment they chose, what the side effects were and so on. It is the platform’s ability to collect data from external sources like random surveys of patients and providers that sets WiserHealth apart from other tools that focus on one aspect like price transparency, Debgupta said. WiserHealth also provides cost information and lets users know which treatments are covered by their health plan.
“Will it work for me personally? That is the piece that’s missing from the health care system,” Debgupta said. “Trial and error costs the payer and the system a tremendous amount of money.”
For Nevins the hope is that Wiley employees with chronic conditions will use the information to pick the most effective treatments, which in turn will improve health outcomes and lower costs, although he’s quick to point out that cost was not the primary reason for introducing WiserHealth.
“Providing this wasn’t so much about reducing costs,” he said. “I believe that giving people guidance and educating them on their options about the most effective treatments will improve quality of care. And in the long term that will help to moderate increasing costs. We didn’t do this because we thought it would have a measurable ROI.”
But getting employees to take an interest in their health care after a lifetime in a health care system where “doctor knows best” is the prevailing wisdom and few people think about health care costs as long as their insurance copays are low is no small feat, experts say.
Consumer-driven health plans are touted as a way to change that dynamic, and they are becoming increasingly popular. More than half of large employers offer a CDHP, and this year 22 percent will offer them as their sole plan, according to a National Business Group on Health survey. While cheaper than other health plans, CDHPs have higher out-of-pocket costs, which critics say could be problematic for low-income people and those with chronic health conditions who use the health care system frequently. To help offset some of these costs, CDHPs are paired with a tax-exempt reimbursement account — typically a health savings account or a health reimbursement account — to pay for qualified medical expenses.
In a CDHP, enrollees must keep track of funds in their account. If their savings are spent before their annual deductible is met, they must pay the difference out of pocket until they meet the deductible. Once it’s met, the plan works like a traditional preferred provider organization plan with the plan paying the majority of the costs.
“In 2006 we began working with CDHPs and HSAs and we realized that the consumer had no clue how these plans worked,” Skinner said. “They had no understanding of even their basic PPO plan and we want to transition these people into a more complex environment? These plans mean a huge cost shift to employees, and they’re completely unprepared.”
But proponents see CDHPs as an employer’s most effective tool in driving consumer behavior, according to Travis Klavohn, director of consumer health solutions at BenefitWallet, an online platform for managing HSAs. It was launched last year by copier company Xerox Corp. A 2013 study by Buck Consultants, which is owned by Xerox, showed that 51 percent of employees with HSAs set aside more money for medical costs than before they had the account, 29 percent are having more discussions with their doctors about costs, and 13 percent are actively managing their chronic conditions.
“They shop for the cost of care and talk to providers more,” said Klavohn, who identifies himself as a “consumerism evangelist” on his LinkedIn profile. “Because the HSA is owned by the individual, employees are making a cognitive link between their long-term wealth and short-term medical spending.”
Unlike an HRA, an HSA is controlled by the employee, not the employer, which allows workers to invest unused funds in interest-bearing accounts and also enables them to take their account when they leave the company.
“It’s about taking control of the situation,” said Scott Matthews, vice president of marketing for Castlight Health, referring to the employee-managed aspect of CDHPs. “It’s nothing people want to do, but if there’s enough money at stake people will want to do it.”
Castlight is just one of several companies, including Change Healthcare and Healthcare Blue Book, offering cost transparency tools to help users shop for health care services. Matthews said they will need that level of awareness to effectively navigate the new consumer world.
“We’ve been lulled to sleep by the fact that we have insurance and low copays,” he said. “We need to wake up out of our insurance-induced sleep and start thinking about how we are spending our money.”