Fiduciary Healthcare Responsibilities

More on Fiduciary Healthcare Responsibilities

Yesterday I wrote a little bit about the fiduciary healthcare responsibilities that employers hold given that companies invest our healthcare dollars in plans and structures that can be quite costly. In his book The Opioid Crisis Wake-Up Call, Dave Chase writes, “Given the wide cost differentials, CFOs and CEOs are failing in their fiduciary responsibility if they do not move to modern health care delivery models that are proven to save money while maintaining or improving health outcomes and patient satisfaction.”

 

Chase’s book is all about current structures and systems for healthcare coverage, delivery, and access that are within the control of employers. Healthcare is a complex field, and for years, employers have not had a hands-on role in shaping and creating the models they work through to provide health insurance to their employees. Chase argues that the result has been increasing costs without pressure on providers or insurers to make sure that the quality of care matched the costs.

 

Innovative and truly caring companies have shifted the status quo and shown that quality healthcare can be affordable. They have shown that preventative medicine can be supported and promoted by thoughtful employers, saving healthcare dollars and improving employee health in the long-term. Companies that ignore these models will effectively be wasting healthcare dollars and hindering the health of their workforce. This exposes companies to liability for not fulfilling their fiduciary healthcare responsibility.

 

When we talk about health policy and improving the healthcare system in the United States, we usually talk about government policy, about hospital charges, and about minimum standards for insurance and rising insurance premiums. Chase thinks we need to spend more time talking about our employers, and about what they can do to help improve the system, without requiring laws to be passed or companies to make policies that go against their own best interest. Employers have a lot of leverage if they take their fiduciary healthcare responsibility seriously.
Self-Insured Health Plans

Self-Insured Health Plans

“A self-insured health plan,” writes Dave Chase in The Opioid Crisis Wake-Up Call, “is established when an employer sets aside some of its funds to pay for employees’ medical expenses. Employees then contribute to the plan rather than pay traditional premiums.”

 

In the United States, it is not uncommon for large employers to chose to be self-insured rather than to offer health insurance provided directly through an insurance carrier such as Cigna or Anthem. Chase explains that self-insured plans shift risk from the insurance carrier to the employer, with the benefit of reduced administrative costs and changed financial incentives. Large carriers are often still contracted with in a self-insured system for some administration and bill paying functions. In a traditional relationship, as Chase explains, employees pay premiums and “if the premiums exceed the medical expenses, the carrier wins.” Self-insuring eliminates this aspect of health insurance, reducing the total amount that employees should need to contribute by eliminating a profit motive for the carrier.

 

Chase highlights another benefit of choosing to self-insure, lower taxes and fewer regulations to abide by. In the United States, each state has an insurance commission that sets its own standards and requirements for insurance (auto, home, medical, etc…). The benefit according to Chase is that, “the Employee Retirement Income Security Act of 1974 [ERISA] states that a private, self-insured health plan is administered in accordance with its [ERISA’s] terms and federal rules. So, these plans aren’t subject to conflicting state health insurance regulations or benefit mandates.”

 

This is an important point that I have been thinking about in Nevada. My state requires that health insurance cover ABA treatment for children with Autism until they turn 21. However, not all of the plans that Nevadan’s have through their employers actually cover ABA treatment and some only cover ABA treatment until a child is 7 years old. While selling insurance across state lines (as in buying an insurance plan sold in California and according to California statutes and regulations) is not legal, offering a plan from a self-insured employer based in another state is legal. Some employers in Nevada are very large, are self-insured, and have headquarters based outside the state. These plans are not subject to the changing health insurance demands of every state since they are regulated by ERISA. So many Nevadans, despite state law, do not have coverage for their child’s ABA therapy.

 

It is important to note that self-insuring can reduce costs for employers, give them more control over the plan they design for employees, and can offer tax advantages along with easier implementation by reducing regulations and applicable laws. Employers should move in this direction to create better health plans that give them better access to their own data and needs. At the same time, we should recognize that these types of plans can be hard to regulate and present challenges to patients, employees, and lawmakers who want to see specific changes or policies. Employers should strongly consider self-insuring to get away from the profit motive of health insurance carriers, but should recognize that avoiding individual state health insurance requirements by self-insuring could lead to a backlash against self-insured health plans.
Another Note on Healthcare Brokers

Another Note on Healthcare Brokers

A point that Dave Chase makes in his book The Opioid Crisis Wake-Up Call¬†is that employers are not fulfilling their fiduciary duties to their employees with regard to the healthcare products that they offer as benefits. I mentioned earlier that many companies have an HR person in charge of health benefits who doesn’t really understand health insurance and whose main goal is to not be yelled at by other employees for problems, high costs, and restrictions with their health insurance plan. The result has been a bit catastrophic, with plan costs rising continually, insurance companies and major healthcare systems ganging up on uninformed benefits managers, and healthcare brokers taking questionable bonuses from various arms of the healthcare sector.

 

David Contorno, founder of a company called E Powered Benefits, contributed a chapter to Chase’s book specifically highlighting many of the problems with the current broker arrangements that companies face. He writes, “Recently, a Blue Cross health plan offered their brokers a $50,000 reward for switching self-insured clients back to more lucrative, fully-insured plans. In sectors like financial services, that kind of undisclosed conflict could land a person in jail. In healthcare, however, such clear conflicts of interest are common and considered business as usual.” While this kind of broker arrangement is deplorable, the heat should not only be on the brokers. Employers are also responsible for ensuring they are partnering with brokers who are free from conflicts of interest, and there are groups now popping up to help employers identify brokers who don’t engage in such shady behind the scenes agreements with health insurance companies and healthcare systems.

 

Employers are responsible for the sound management of the financial resources they manage for their employees, whether it is retirement savings accounts or health insurance plans. Employers purchase and manage health insurance products for employees, however many of the healthcare decisions are made by people who don’t fully understand them, with the goal of not making people too angry, and with direction from actors who are not as independent as they claim. Chase worries that there could be an explosion of lawsuits against companies for operating in this system. Lawsuits holding companies responsible for out of control increases in healthcare plans could dramatically shake-up the way health insurance is provided and purchased in the United States. The bottom line is that as things stand now, the financial considerations of employees, the people who will use the product purchased for them, is not one of the main considerations in the purchasing of healthcare plans, and a lot of shady looking things take place among employer-broker-provider-insurer relationships.
Employers, Employees, and Opioids

Employers, Employees, and Opioids

One of the frustrations I have with modern day America is how frequently employers say that their greatest asset is their employees, but don’t back that statement up with actual action that helps improve the lives of their employees. Many of us work 40 hours when our work could reasonably be completed in fewer hours, alternatively many of us have incredible demands and insufficient help or time to complete our work. On the benefits side, many of us have health plans that don’t make preventative care affordable and have high deductibles and copays which place basic medical care beyond our reach. These frustrations, incursions into our non-work-lives, and a lack of support for living healthy lives are examples where employers are failing to live up to the claim that so many of them make about the care and value they have for their employees.

 

In the end, a failure to take care of employees and a willingness to let workers languish hurts the employers as much as the employees. In his book, The Opioid Crisis Wake-Up Call Dave Chase writes, “Ohio attorney general Mike DeWine estimated that 40 percent of job applicants in the state either failed or refused a drug test. The result: In certain places, solid middle-class jobs can’t be filled.”

 

On a first read, the problem sounds like it is on the job applicants. Why are so many job applicants using drugs, refusing drug tests, and unable to be hired for work? Shouldn’t they stop using drugs, get their lives together, and do the sensible things to be responsible humans and find employment? From the outside, as someone with a job who doesn’t have an opioid addiction, this is easy to say and think, but it’s also shortsighted.

 

Many of us have incredibly lengthy commutes, decimated social lives, no meaningful civic or religious organizations to give us purpose outside of work, and lack access to supportive mental health and general healthcare services. When we fall on hard times and need assistance, we don’t have a social safety net that we can fall back upon with encouragement and understanding. We feel isolated, can barely afford healthcare, don’t have much time outside of work and commutes for social or civic engagement, and if we do need welfare, the system is designed to make us feel like abject failures for turning to public support programs for help.

 

The blame can’t fall entirely on the individual. Businesses have to be held accountable as well, after all, employers count on a strong labor market to stay afloat and be productive. If they truly value their employees, they should prioritize a happy, healthy, and effective workplace by pushing back against institutions and structures in our lives that make us miserable, depressed, unhealthy, and uncommitted to the work we do. Chase’s book shows how employers are beginning to do this, by providing more services (in healthcare) to their employees and actually saving money while doing so. Employers can let their actions speak louder than their HR slogans, and can help their employees actually live healthy lives. In the end, the workforce that they rely upon will indeed be more reliable.
Businesses and Healthcare Solutions

Businesses and Solving Healthcare Problems

We often overlook businesses when we think about the problems in American healthcare and how we can fix the issues that plague our system. But about half of all American’s receive their health insurance as a benefit provided by their employer. Businesses purchase and provide health insurance for millions of Americans, and must think about employers and the plans they offer when we think about the problems in the American healthcare system.

 

Everyone will tell you that healthcare is complicated. We know that insurance is hard, getting to a doctor can be hard, understanding what you have to pay is hard, and trying to guess what kind of plan you need for the next year is hard. All of this makes the solutions to our healthcare problems hard, but for a majority of Americans, the person who is shaping the structure in which they will make these decisions and figure out what is available to them is someone at their job. And for a lot of those Americans, the person at their job is probably in HR, and their main goal is not to find a great healthcare solution for the employees, but to just not get yelled at by the CEO for raising health insurance coverage costs and to avoid being yelled at by unhappy employees. Nevertheless, businesses can step up and play a role in making changes for the positive in the American healthcare system.

 

Dave Chase in his book The Opioid Crisis Wake-UP Call¬†writes, “The opioid crisis is a complicated issue over 30 years in the making. But companies have played a major role in creating and sustaining the crisis. And a vanguard of employers are realizing that they have a major role to play in solving it, and that the solutions fall well beyond what the government alone can do.”

 

Companies, since they control the healthcare of half of Americans, can start making real changes to the care available to people. Employers who set up their own plans can make primary care access, physical therapy, and nutrition services virtually free to their employees. By providing a greater selection of preventative services, they can improve employee well-being and reduce the likelihood that an employee will deal with chronic pain and develop an opioid addiction. This is an over-simplified example of what companies can do, but it is important that we realize that the employer is a major player in the fight to improve the American healthcare system, and if we don’t step up to demand better from our employers, we won’t see the changes we want.