Employers have more power than ever. So what are we going to do about it?

That’s the question posed by Dr. Robert Galvin to employers who are members of The Alliance at the cooperative’s Oct. 21 annual meeting at Monona Terrace.

Galvin trained as a primary care physician but has spent much of his career working on the employer side of health care and currently serves as CEO of Equity Healthcare and operating partner of The Blackstone Group. He previously spent 15 years as executive director of health services and chief medical officer for General Electric; was a co-founder of The Leapfrog Group; and the founder of both Bridges to Excellence and the Catalyst for Payment Reform.

Employers are Game Changers

Galvin pointed out that private-sector employers have either launched or enabled the launch of ground-breaking initiatives such as managed care, transparency, value-based insurance design (VBID) and consumer-directed health plans (CDHPs).

“Our power is just game-changing,” Galvin noted. Unfortunately, employers’ record in working together to drive change is inconsistent. “We have not lived up to our potential,” Galvin says, because employers are too often overwhelmed by the health care system and too afraid of potential negative employee reactions.

Employers’ sub-optimal performance has enabled health care providers to continue to increase costs and operate a dysfunctional system. Yet employers must get involved if they want to change health care. “There’s no other path to a happy ending,” Galvin declared.

Galvin offered two sets of suggestions for employers to move forward: what employers should stop doing as well as what they should start doing as soon as possible.

What Employers Should Stop Doing

Galvin said employers should stop:

  1. Telling everyone they are fed up and are not taking it anymore. It’s time to move beyond words to action.
  2. Focusing on administrative services organization (ASO) fees. Just 10 cents of every health care dollar is spent on administration; the other 90 cents goes to doctors, hospitals, prescription drugs and other costs. Employers need to look at the 90 cents.
  3. Confusing fads with strategies. Employers like wellness programs, disease management programs and onsite clinics, but these programs typically do not save money. While they can be worthwhile as part of an integrated strategy, the strategy itself is more important to drive real change.
  4. Fretting about losing employees because of health benefits. “It never happens,” Galvin said.
  5. Believing that giving employees a voucher to shop in an exchange will have a “happy ending.” Employers can decide to get out of offering health benefits as a corporate strategy, Galvin said, but it will not help solve the problems of health care.
  6. Saying there’s no “bandwidth” for innovation and change. Employers can innovate and drive change if they make it a priority.

What Employers Should Start Doing

Galvin said employers should aim to go to “warp speed” in pursuit of “managed consumerism,” which protects employees against catastrophic expenses but puts enough of their money at stake to keep them engaged in making important health decisions.

“Benefit design and communication is going to rule whether this is successful or not,” Galvin said. To make it work, employers should start:

  1. Developing a “culture of health” based on the employee as the “voice of consumer” (VOC), focusing on the key points where decisions are made.
  2. Using design to drive consumerism. That means making employees “price-sensitive” to health decisions and providing financial incentives for going to the best doctors.
  3. Investing in the infrastructure to support consumerism. Employees will feel it’s unfair if they’re asked to be good health consumers without tools to help them. Tools that employers can offer include price information, education and navigators.
  4. Paying providers based on value. Galvin said employers should work to get employees to use better doctors and pay those doctors based on the value they deliver. He used The Alliance’s QualityPath program as an example of this type of initiative.

Practicing Jujitsu

Galvin suggested that employers need to practice jujitsu, which is a martial art that relies on manipulating an adversary’s actions to achieve your ends, rather than engaging in a futile effort to defeat a larger, stronger adversary through brute strength.

For employers, that means they should stop engaging in sumo wrestling against the health care juggernaut and instead work together to perform jujitsu by using the levers they already control to alter the direction and momentum of the health care system.

“We control our worksites, we control our benefit design,” Galvin said, while also purchasing a significant share of the country’s health care. It’s time for employers to use those strengths to create a better ending for their efforts to buy health care based on value.

Darla Dernovsek
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Darla Dernovsek

Marketing Communications Manager at The Alliance
Darla Dernovsek joined The Alliance in 2013 as marketing communications manager. Dernovsek is responsible for managing and developing communication strategies as well as marketing plans to help fulfill The Alliance mission by raising market awareness.

Dernovsek has more than 25 years' experience in communications, public relations and marketing. From 1992 until joining The Alliance, Dernovsek owned her own freelance marketing and writing business to provide marketing consulting and writing for health-care related entities and credit union organizations. Earlier, she was the director of public relations for Rockford Memorial Hospital and city editor for the Beloit Daily News.

Dernovsek graduated from the University of Wisconsin-Eau Claire with a bachelor of arts degree in journalism.

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