Healthcare is an ever-changing industry. And, it can be overwhelming to keep up. At our recent Employee Benefits Summit, we were honored to have industry visionary Chris Deacon as our keynote speaker. Chris delved into emerging healthcare trends that are shaping our industry and shared valuable insights to help us navigate the future of employer-sponsored healthcare.
Chris kicked off the session by reminding us that fulfilling your role as a fiduciary is not only an obligation but an opportunity to better serve your members. And, the best way to achieve this is by keeping a close eye on the emerging healthcare trends and how they can and will impact your employees.
Shifting healthcare costs to members should no longer be an option, based on recent inflation and cost of living increases. And, consumer-driven healthcare often leads to delayed care for those who need it most. Because of this, it’s essential to focus on getting as creative as possible with your procurement strategies. Better oversight in administration can help improve your members’ experience while reducing their costs and providing them with the level of care they deserve.
Healthcare is not like traditional consumer shopping. So, it shouldn’t be viewed that way. Consumers can make an informed decision on most products and services because they have all the information necessary. That is not the case with healthcare. As an employer, you are the purchaser – and there are certain pieces of information you have the right to. Distinguishing the difference between a consumer of healthcare services (the patient) and the purchaser of healthcare services (the employer) is vital to making the right decisions on healthcare plans.
As an employer, you are responsible for contracting with the carrier, which gives you the ability to demand transparency, quality metrics and performance guarantees that drive positive outcomes. Knowing the difference between a healthcare consumer and a healthcare purchaser leads to more prudent purchasing behavior by employers.
View Healthcare Through a Fiduciary Lens
So, to be a better purchaser of healthcare moving forward, HR leaders should view the process through a different lens. By making decisions through a DOL and ERISA fiduciary lens, employers will better familiarize themselves with their fiduciary duties, and allow those to guide their decision-making.
When consulting with vendors, always question the alignment of the financial incentives. If you have a vendor trying to sell you a solution, dig several layers deep to determine who benefits financially, who benefits from the increased cost of healthcare, and who could benefit from improvement in healthcare costs. Incentives should always be based on positive healthcare performance. It is critical to understand where all incentives lie to make the best possible decision about your health plan.
Healthcare Fiduciary Responsibility vs. Retirement Plan Fiduciary Responsibility
In the current landscape, retirement plans are under more scrutiny than healthcare plans. The question is: In healthcare, at what point does the fiduciary responsibility transition from a moral responsibility to a legal risk? It’s only a matter of time before the prevalence of lawsuits increases. For example, when handling new fee disclosures, it is now the employer’s responsibility to review the fee disclosure and ensure they are in the best interest of the plan.
While there is some muddy water surrounding this, we have three steps that can help HR Executives and CFOs fully understand their fiduciary responsibilities.
- Review, understand and ask questions about your fiduciary responsibility on your health plan. Check out this resource to learn more.
- Own your data — If you don’t own your data, how do you know that what you’re paying is reasonable? Always document how you review the data and look for any discrepancies between what you and your vendor are tracking.
- Fee disclosure — Analyze all agreements, including consulting agreements and ASAs, to understand what you as the employer are paying for. As yourself if other vendors are getting paid related to your plan.
The healthcare landscape is continually changing. That’s why emerging trends in healthcare should always remain top of mind for employers, as you do carry a fiduciary responsibility. We are appreciative to Chris Deacon for shedding light on these trends and helping us to understand what needs to be done differently to cut costs and take better care of employees.
If you’re interested in learning more, we invite you to connect with one of our team members today for a free consultation.
About Chris Deacon
Chris Deacon has a deep understanding of the fiduciary role health plan administrators hold and should be leveraging in order to drive value for their plan sponsors and members. An attorney by training, Deacon formed VerSan Consulting, LLC to educate and engage employers to be more prudent purchasers of healthcare. From creative procurement methodologies and demanding contracts to population health initiatives and primary care investment, Deacon believes that large employer-sponsored health plans not only have an opportunity – but an obligation – to drive healthcare transformation that delivers value for the market.
