The health insurance industry is typically behind the overall economy when it comes to innovation. This is a major problem since insurance premiums and costs are on an unsustainable trajectory. Employers often find themselves stuck in the cycle of increasing annual renewals with their only option being to spreadsheet other carriers and plans.
But what if I told you innovation is already here? Healthcare is in a prime position today where investment and innovation are going on throughout the industry in nearly every area: healthcare delivery, pharmacy, telehealth, distribution, and finance and plan funding.
Let’s take a look at these innovations and tie them back to employer-sponsored healthcare.
Best Buy Enters HealthCare
Best Buy (I bet you never expected us to mention this company here!) is now in healthcare, because who isn’t?
Recently, Best Buy acquired Current Health, a care-at-home technology platform based in the UK. The company covers patient monitoring, telehealth, and patient engagement, as well as offering a wearable device to give healthcare providers more data into patients’ conditions. This is another episode in the crossover between consumer technology and healthcare.
This is an interesting comment made by Best Buy CEO Corie Barry during its Q3 earnings call, where she identifies BB’s strength in retail and ability to connect patients to physicians. She connects this to the ability to monitor a chronic condition or improve wellness such as better sleep. She also discusses active aging, which touches on device-based emergency response and capabilities to keep elderly people in their homes. And finally, she touches on virtual care and specifically the ability to allow people in their homes to connect seamlessly to a doctor.
Telehealth really took off during the pandemic and we think is here to stay. Chronic conditions are under the spotlight as billions of dollars has been invested over the last few years in digital health companies, many of which address a chronic condition and offer virtual health services. These three areas are critical to preventative health and addressing drivers of healthcare costs before they escalate into more expensive claims and worse outcomes for members.
Employers can follow suit. How are their health plans addressing primary care, virtual health, and tackling chronic conditions?
CVS Doubles Down on Health Services
While CVS is well known for its pharmacy services, and health is literally in it’s name “CVS Health Corporation,” it is a bit of a surprise to hear that CVS will close 900 stores over the next three years, according to the Wall Street Journal. This represents about 10% of its locations in the US. This move follows through on CVS Health’s plans announced in 2019 to open 1,500 HealthHUB stores after a plot with three stores in Houston.
But in the next breath, CVS announced that it will be adding more healthcare services at existing locations, with a focus on primary care, mental health services, hearing exams, and diagnostic testing at so-called “health hubs.” This is aligned with the considerable discussion we’ve had in this space before on the role that mental and behavioral health plays in health outcomes, maternal and infant outcomes, employer benefits, and more.
CVS Health has a significant market opportunity to touch many Americans and improve the delivery of preventative care to them. Through its store locations and its $69 billion merger with Aetna, CVS is trying to make itself into the “front door” to healthcare for the whopping 80% of Americans who live within 10 miles of a retail location.
Employers can take inspiration from CVS’ emphasis on these preventative health services and pharmacy accessibility and affordability. Preventative care, especially when it is integrated with other health services such as mental health, has been shown to improve member health and deliver health services at a lower total cost of care.
No Surprises Act Puts Downward Pressure on Contracted Rates
As anticipated, the No Surprises Act has stirred a lot of pots with providers, with anesthesiologists in North Carolina voicing concerns and an outsourced emergency medical provider winning a lawsuit against United Healthcare. We anticipate that the bill will reduce health plan costs in the intermediate future, as payers now have significant leverage to negotiate lower rates for in-network providers.
It’s an interesting argument from the emergency providers – they allege that UHG is negotiating lower reimbursements for a provider to be in-network while then working with congress and researchers to outlaw balance billing for a group if they choose to not accept United’s rate. However, this physician group is owned by a large private equity fund and has previously been in the news for its use of surprise bills with patients, cutting doctors’ pay during the coronavirus pandemic, and ultimately passing earnings to investors, not doctors and providers.
While this corporate lawsuit back and forth doesn’t directly affect employers who want to provide affordable and quality care to their employees, employers should still take note.
As Congress has taken action to block Americans from receiving surprise bills, employers should look for more from their local health systems in offering affordable care and using network and plan design to emphasize low-cost, quality care.
More groups than ever before are using self-funding and other alternative funding models of plan design and tiered or narrow networks to increase transparency and reduce friction for a member seeking or in need of care.