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Join ophthalmologist Paul Pender delves into the results of the annual KFF survey, focusing on employer attitudes towards employee satisfaction, the increasing costs of healthcare, and the emerging trends reshaping the landscape of health care benefits. Join us as we examine the perspectives of employers and gain insights into the innovative models driving change in the industry.
Paul Pender is an ophthalmologist and author of Standing Up & Speaking Out for Patients & Doctors and Rebuilding Trust in Healthcare: A Doctor’s Prescription for a Post-Pandemic America.
He discusses the KevinMD article, “Employer health plans need a makeover.”
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Transcript
Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast, and get CME for this episode by clicking on the CME link in the show notes. We welcome back today Paul Pender. He’s an ophthalmologist, and today’s KevinMD article is “Employer health plans need a makeover.” Paul, welcome back to the show.
Paul Pender: Hey, thanks for having me again, Kevin, I appreciate it.
Kevin Pho: So Paul’s been on multiple times. Go to KevinMD.com/podcast, search for his name to hear his prior episodes and story. But today let’s talk about his recent KevinMD article, “Employer health plans need a makeover.” Now, for those who didn’t get a chance to read this one, tell me what it’s about.
Paul Pender: OK. Well, I was reading an article from the Kaiser Family Foundation about the response to 2,000 surveys that were done for employers, that showed real concern expressed by employees to their employers regarding their health plans. And so some of the statistics were quite amazing to me, and I can go into that a little bit if you like.
Kevin Pho: Sure.
Paul Pender: Between moderate and high concern, at least half of the employees had expressed concern about access, cost. When their own portion of their health benefits continued to increase, there was more concern.
Ordinarily, in most larger employer groups, employees are responsible for about 25 percent of their entire health care costs, and those have continued to keep increasing as premiums did. And if we trace this back to the Affordable Care Act, where health insurance companies were allowed to keep 20 percent of premium, that’s the medical loss ratio, the higher the premiums, the more they can charge as overhead.
So even though the surveys didn’t actually ask the employees themselves, these were the responses of the employers. So if the employers themselves are hearing that their own employees about half the time are uncomfortable with what’s going on and what their contribution costs are, I think it’s a serious issue.
Kevin Pho: So in terms of the things that employees are most concerned about, you mentioned things like access and costs. Are there any other factors, or were those two the major ones?
Paul Pender: Yeah, I think so. And what I hear often is that people are given a booklet from their human resources department, here’s our list of doctors, here’s the things that you can do, and it’s a self-serve menu.
Whereas better models actually look at having patient navigators that act as patient advocates, so that you’re not kind of lost in the maze. The health care maze can be very confusing, and employees don’t want to keep hassling their HR department. So I think better models are, you have one person to go to, they can kind of help you facilitate access to the system and serve as your advocate for getting into the right care at the right time at the right price.
Kevin Pho: So let me go back to that point about that menu of options that a lot of employees are confronted with during open enrollment. So typically they’ll, like you said, get a booklet, and in the booklet there could be several choices that they could make, and premiums may vary, deductibles may vary. What are some of the dangers that patients face if they just go into that process blind, without any navigation or counseling?
Paul Pender: I think one of the problems is that the list that they offer may be out of date. Some of the doctors have dropped out of the PPO, the professional provider organization, what have you, and no longer even available to them.
And we’ve seen this happen in other areas, like in Medicare Advantage, where a major hospital system just said we’re not going to accept that insurance anymore, and patients are scrambling to find new doctors because they’re no longer part of that panel. So access issues are important.
And I think there may be some other dangers that I really didn’t get into when I read this article about what employers are facing. But I do know, as a small business owner and a managing partner in a medical practice, it seemed like every month we were still signing paper checks. This is back in the day, Kevin, this is before all this was digital. I’m signing checks every month, my partners and I would go through a stack, and one of the items in that stack was our premiums for health insurance for 40 employees. And I was signing checks, this is a decade ago, $25,000 a month.
Kevin Pho: Wow.
Paul Pender: For 40 employees. And it just struck me that, I thought we were offering a pretty good package, we were paying 75 percent of a premium and all this stuff, and I thought, and this is what I’m still paying?
And what I realized is that as these premiums continued to increase, the only out we had was to say that we would have a very high deductible, and that once that employee hit that deductible we would cover anything in excess of a certain amount. So we couldn’t really change the course of anything, because traditional health insurance plans, whether it’s nonprofits like Blue Cross Blue Shield, Aetna, United Health, whatever, they just kept raising premiums.
So our own broker would come to us every year with a different proposal, and here’s their list of the doctors, and here’s their list of what’s covered, and here’s the hospital that you can pick. But it was mind-blowing, all these different variables.
Kevin Pho: So you mentioned the role of navigators to help employees choose the right health plan for them. What would that look like in practice?
Paul Pender: Well, I can tell you from a personal experience, and I’ve talked to people who do this for a living, that really understand the patient. Their patients can call them, they have their cell phone, if they get a recording they usually get back to them within 30 minutes, and they understand the patient’s complete medical background.
And they also understand, this one nurse navigator that I know personally, because I’ve been advising a company, have been involved with helping people who were told that they didn’t have the proper post hospital care and were able to get that care. This is for someone who had major radical neck surgery and all that stuff, where they needed extra help at home with nursing care, and they were told on discharge, well, that care is not available. Well, they called this care navigator, and she was able to get the work done.
And so I think what you have is, you have someone who’s a go-to person who knows your health history, knows your family history, knows what special needs you may have. And when the word gets back to the employer that this person has a personal hand in helping them get to the care they need, it’s amazing. The experience that both the patients and the employers say is that this is a much better model.
Kevin Pho: So as it stands, do employees have ready access to patient navigators, or would they have to pay extra for some type of third-party patient navigator?
Paul Pender: I don’t know a lot of the details, if there are competitive models out there. What I will tell you is that too often the navigators that are hired by the major health insurance plans have nurse navigators who really are involved primarily with making sure medications are taken properly, and that there are, I guess I would say, follow-up scheduled phone calls that are being made.
I did this with my parents when they were quite infirm, and you’d get a monthly call from a nurse who’d say, so how’s things going? And I’d say, well, my mother’s having issues with her Parkinson’s disease and she’s falling more at home. And then the next question was, and how’s her diet? I’m thinking, wait a minute, did you just hear what I said about my mother falling more lately?
And so there’s a rote approach to this kind of navigation that I think, it checks boxes, but it doesn’t really get involved in the personal care of the patient.
Kevin Pho: So without a navigator, tell us some of the common pitfalls employees may face when evaluating their health benefits.
Paul Pender: I think the first thing is getting an appointment. You can have a list of people who are taking new patients, but getting a new appointment is often very difficult. And we know that we’re going to be facing a health care professional shortage as the population ages. And I think it’s just harder for people to sort of get through that front door, that front door that allows you to seek the care that you need.
So I think what I consider the system now, it’s a system that’s adversarial. And what I think you really want is a system that supports the patient, or the member in that health plan, for the employer’s employees, and make that work. It’s too awkward, it’s too much of a barrier to people getting the care they need.
Kevin Pho: So when evaluating the health benefit, there are going to be some options, for instance health plans that could limit access or limit the selection of physicians an employee can see.
Paul Pender: Yes. And part of this is, you know, in and out of network, and you know that story too well. If you are traveling and break your leg and you need care, you’re not going to be able to go to the network at your local factory where you’ve had a job forever. So the costs have to be a major consideration if you’re going outside of network, and I think many employees are not aware of what their responsibilities are if they go out of network.
Kevin Pho: Can you speculate, or do you know, how employers are responding to this data?
Paul Pender: I think that if they read my piece on your platform, they would start to be a little concerned. I think they better do something to change it.
And first of all, it’s not just the experience for the employees, although that’s critical, but if they can’t stay in business there won’t be any health plan. And employers are paying so much now. Every year for the last decade their health care costs have increased three or four percent, but this year it’s estimated to be about 7 percent. So it’s not sustainable.
And so I think they really are looking at alternative models now. And part of the way that you can lower health care costs is to shrink the role of intermediaries. So who are the intermediaries? They’re the large health insurance companies, and they’re the pharmacy benefits managers. And once you take a lot of that cost out, you can divert that to the proper care, and employers can save quite a bit. And if physicians are willing to take on some financial risk through a value based care, then some of those savings can be returned both to the doctors who are offering the care, as long as they can meet their outcome guidelines.
So I think better models will come along because the marketplace is going to demand it.
Kevin Pho: What are some examples of alternative models?
Paul Pender: The company that I advise has the experience of 11,000 lives for a major employer group that they’ve had for two years, and have really done a lot to improve the experience for their members. We also know that they’ve saved money in the process.
And now they’re connecting up to offer a pharmacy benefits package for prescription drugs that looks at transparency and avoids a lot of the kind of black box deals that are made for rebates. So now we’re looking at, what is the actual manufacturer’s cost of the drug, plus the small markup for prescription, not a commission on the cost of the med. And if you’ve got a $220,000 biologic that you have to dispense, you don’t want to be paying a commission to the pharmacy benefits manager on that drug. You want to pay essentially the cost plus a small markup for the prescription or for the pharmacy.
So I think that the model is going to be quite disruptive, and I hope it is. Because when I got involved in this program as an investor and as an advisor several years ago, I was really kind of shocked by what businesses had to put up with and what doctors had to put up with. And I think this is going to turn out to be a better model for everybody.
Kevin Pho: We’re talking to Paul Pender. He’s an ophthalmologist, and today’s KevinMD article is “Employer health plans need a makeover.” Paul, as always, we’ll end with your take-home messages to the KevinMD audience.
Paul Pender: OK, the take-home message, Kevin, is, thanks for giving me a soapbox. I think this is an opportunity to talk about what the direction in self-insured health plans by employers is going to take, and I think we’re about to see a lot more disruption. So the end of my essay that you’re kind enough to publish said, it’s time for a makeover, and expect more in 2024. And I think you’re going to see more in 2024.
Kevin Pho: Paul, as always, thank you so much for sharing your perspective and insight, and thanks again for coming on the show.
Paul Pender: My pleasure, Kevin. Thanks for having me.
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