Healthcare Innovator | Employer Marketplace
What is the product or solution you have to offer and how does it fit into an employer's ecosystem? How is it better than what they may already have. Why doesn't their medical carrier(s) provide this? How are you different? How is this solution different? How is it better? What else do you need to consider?
Does what you do currently work for the self-insured employer marketplace? What additional processes and functionalities need to be considered to satisfy employer client needs? What about employees and their families: how can you assure employers that plan member user experience will be positive?
In a single sentence: What is your value proposition? What is the problem you are solving for the self-insured employer client? What about the employee or plan member? Can it be measured? What is the return on investment (ROI) or value on investment (VOI)? How can it be easily measured?
Who should you sell to? What kind or employers should you target? How do you effectively reach them? What do you need to do to sell successfully? Where are the best channels? Who are the stakeholders and key players that might get your foot in the door?
For a plan of 10,000 members costing the employer sponsor $50 million: 300 people account for $28 million. Understanding who is high cost this year, and who will be high cost next year will help shape critical medical cost strategies.
High medical cost solutions for a working family population warrant targeted strategies. The concentration of expenses for this year’s medical costs is found claimants spending more than $25,000/year. Condition-specific solutions are often required for back surgeries, cancers, neonatal care, extended substance abuse treatment, auto-immune disorders, and complications of hospitalization.
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“Why should I pay for this if it isn’t covered by the insurance company?”
If an employer’s medical insurance company doesn’t cover a diagnostic or therapeutic service, why should the employer consider buying it separately?
The answer is found in the corridor between “medical necessity” and what can be argued is genuinely “medically necessary.” In order to prove that your product/service is medically necessary, you first need to understand the medical insurance company’s medical necessity policies for your technology.
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“The benefits of Point Solution carve-outs are in their ability to offer better options for managing cost and benefits offered by experienced vendors. Those third-party vendors can customize their programs to meet the specific needs of your benefit programs.”
For the self-insured employer, third-party carve outs and other vendors usually make up a significant part of the health management program offered to employees and their spouse/partners and dependents.
In 2021, the average health insurance cost for employers was $16,253 annually, or 73% of the premium, to cover a family and $6,440, or 83% of the premium for an individual. These premiums for families and individuals have increased 22% over the last five years and 47% during the previous 10 years. [Kaiser Family Foundation; 2021]
Compared with high-income peer countries, the United States has a 46 to 50 percent higher disease burden rate for 20- to 40-year-old workers, and a 17 to 33 percent higher disease burden rate for those over 40 years old. [Innovating employee health: Time to break the mold?; McKinsey; Sept 2021]
Self-insured employer plans usually cover employees and their spouse/partners and dependents. Employers depend on their medical carriers and their administrative services to provide access to good medical care, pay an appropriate (and pre-specified) amount and respond to covered members as customers.
At the heart of employer health plans are employees on whom companies depend for business success. The relationship between health and productivity is strong, but complex. Direct costs of health-related absence and disability can be dwarfed by "presenteeism." The focus on wellness and wellbeing is shifting to employee engagement and performance.
Employer-provided health coverage is important for recruiting, but even more important for retention. A recent AHIP survey shows that: 56 percent of U.S. adults with employer-sponsored health benefits said that whether or not they like their health coverage is a key factor in deciding to stay at their current job. 46 percent said health insurance was either the deciding factor or a positive influence in choosing their current job. The role that healthcare innovation can play to support this is considerable.
Rule of thumb: Larger employers tend to work with larger consultant organizations who charge by the hour and bring sophisticated resources and broad subject matter expertise. Smaller employers tend to work with brokers who earn commission from placing medical insurance business- but often include value-added services to those client relationships. Knowing the players and understanding the working dynamics (and how they may vary) is invaluable to successful growth in the self-insured employer marketplace.
Health care purchasing coalitions, executive roundtables, industry membership organizations are among those influencers who help employer decision-makers navigate the complex landscape. These influencers offer powerful potential for healthcare innovators looking to shape and showcase their solutions.
Just because you can do it, even do it very well, and you think it's very cool.......that doesn't mean that a self-insured employer will buy it. You may have a new diagnostic test for early detection of a disease or condition. You'll need to be prepared with answers. How will it be deployed? Who will pay for it? How much does it cost? Is your pricing flexible? What happens when a test is positive?
Just because you have a slick app......just because the challenges you address have been in the news recently......just because it's relevant to something that is important to an employer.....your health care innovation solution needs to work. You have to be able to show it works. Be credible. Demonstrate value.
You may be surprised how savvy self-insured employers and their key advisors actually are. You know your product but it will be up to them to determine whether and how it might fit into their platform. Your job is to explain what your healthcare innovation can do and how it might work with their platform. It's easier for you prospect to say "No thanks." What triggers might change their minds?
Self-insured, or self-funded plans, currently cover an estimated 94 million of the nation's 156 million employees. The 2020 Kaiser Family Foundation Survey of Employer Health Benefits reports that 67 percent of employed, insured workers are covered under self-insured, or self-funded, arrangements. Under these arrangements, the employer, n
Self-insured, or self-funded plans, currently cover an estimated 94 million of the nation's 156 million employees. The 2020 Kaiser Family Foundation Survey of Employer Health Benefits reports that 67 percent of employed, insured workers are covered under self-insured, or self-funded, arrangements. Under these arrangements, the employer, not an external insurer, directly bears the financial risk for the cost of employee health care.
"Self-funded employer groups already bear the risk for the increased costs of their health plans. The health plans that take on administrative services only (ASO) contracts should look for ways to increase their value to these organizations, not just encourage them to take on greater costs. The popularity of self-funding with large employ
"Self-funded employer groups already bear the risk for the increased costs of their health plans. The health plans that take on administrative services only (ASO) contracts should look for ways to increase their value to these organizations, not just encourage them to take on greater costs. The popularity of self-funding with large employers puts pressure on health plans to differentiate themselves, especially as enterprise employers are looking for new options."
[Forbes Technology Council; Sept 2020]
"A return-on-investment (ROI) mindset would lead employers to optimize where they spend resources related to the mix of the employee base. For example, effectively treating depression and anxiety could lead to a 4:1 return (that is, $4 back for every $1 spent) in improved employee health and productivity at work."
[McKinsey; "Innovating employee health: Time to break the mold;" Sept 2021]