Being a Disruptive Force in Healthcare

As snow began to fall on the nation’s capital yesterday morning, attendees at the National Business Group on Health’s Business Health Agenda 2015 conference were inside the J.W. Marriott (Washington) intently listening to NBGH President and CEO Brian Marcotte lay out the challenges and opportunities that lie ahead for healthcare in 2015—and beyond.

452031437During his talk, Marcotte touched on the “disruption” occurring in healthcare today and praised employers for the role they’re playing in “driving innovation.” He described those employers that are leading the way with such innovations as “disrupters.”

“Disruption” is certainly as good a word as any to describe what’s taking place in healthcare today.

No surprise that Marcotte — who was vice president of compensation and benefits at Honeywell for roughly 12 years before replacing Helen Darling as NBGH president and CEO last May — pointed to the Affordable Care Act as healthcare’s biggest disruptive force.

Six years ago, Marcotte said, “[w]hen the CEO would ask the question, ‘Why don’t we just get out of healthcare?’ the answer was simple [because] there was no place for people to go to purchase affordable, high-quality healthcare. Well, the answer is not as simple today.”

Nowadays, he explained, there are several options, including staying the course, private exchanges and public exchanges. As things stand today, he said, “staying the course” continues to be the most efficient way to deliver to employees affordable healthcare. As he explained it,  “[w]e haven’t seen good and consistent data” to suggest otherwise.

At the end of the day, Marcotte added, it all comes down to value and whether or not private exchanges can deliver greater value than today’s self-insured model.

During a session later in the morning, Julie Stone, North America health and group benefits leader for Towers Watson, shared, for the first time, the results of her company’s just-completed 2015 Emerging Trends in Health Care Survey. Among the findings: While 17 percent of 444 employer respondents believe private exchanges provide a viable alternative for employer-sponsored coverage for active full-time employees in 2016, confidence in the approach builds to 37 percent by 2018.

In addition, the Towers Watson study found companies that have done extensive analyses of private exchanges are twice as likely to consider them a viable option in 2016 (29 percent versus 14 percent).

Despite this somewhat promising data, Marcotte said, employers aren’t going to embrace private exchanges until they see more data suggesting it’s the right move to make.

Early on in his remarks, Marcotte emphasized the need for more data, recalling an episode at Honeywell when CEO David Cote put him on the spot at a meeting to back up a statement he made with meaningful data.

CEOs make their decisions based on data, Marcotte said. But with the exception of cost, he continued, the data needed to make the right healthcare decisions aren’t available yet.

In his talk, Marcotte also touched on other disrupters, such as the industry consolidation that’s going on in healthcare. “When will we begin to see the synergies from the consolidation?” he asked.

Another disrupter: emerging delivery models, such as accountable-care organizations. Despite an “explosion” in the number of these organizations, he said, the jury is still out as to “what to make of it.”

“Employers,” he said, “need to know what they’re buying.”

In other words, he said, they need to understand the “value” they’re getting.

As he put it, if you’re going to go to your CEO and say, “We’re going to change the plan design and encourage people to go to ACOs,” that CEO is going to respond, “Why? What’s the value proposition?”

So be ready for that question. And, I would think, be ready with the required data to back your proposal up, because you know you’re going to need it.