How US Employers Can Help Provide Better Health Care - Harvard Business Review
U.S. employers had to help address the deficiencies in the U.S. health care system that emerged during the pandemic. Instead of retreating after the pandemic subsides, they should go on the offensive and play a more active role in shaping a better health care...
For employers, health care during the Covid-19 pandemic went from being a human resources issue to a business continuity issue. Enterprises across the country gained new capabilities and skillsets as they mitigated the effects of a pandemic on their people and their operations. Large employers (those with more than 5,000 employees) have an opportunity to learn from these experiences to change how they pay for and manage the health of their populations and move the entire U.S. health care system forward so it delivers better, more affordable care.
The Pandemic’s Message
Weeks into the pandemic, employers launched pandemic response teams made up of senior leaders, that sometimes included a designated “Covid-19 czar.” These teams made decisions on a wide range of topics, including whether to temporarily close an office or facility, whether to bring in third parties for services such as Covid-19 testing or workplace redesign, whether to change HR policies and benefits (e.g., work from home, paid time off, childcare subsidies), and how to manage internal communications. They also used local contexts and data on their specific population of employees and their facilities to make decisions. What these teams quickly realized was that their businesses required bespoke approaches.
Rather than relying on the health care system, these leaders started deciding who was safe to be at their organization’s worksites and who was not. When it became clear that the public health system did not have sufficient resources to conduct contact tracing — a critical intervention needed to slow the spread of outbreaks — many employers took that into their own hands. Others went even further and procured their own test kits and hired health care professionals to test and diagnose employees. They also took a lead role in addressing the hesitancy of some employees to get vaccinated against the coronavirus.
Employers also saw their employees receiving the majority of their care virtually. Despite its advantages, however, virtual care does not guarantee higher quality and lower costs.
Today, with the Delta variant hindering efforts to curb the pandemic and with President Joe Biden’s announcement of new federal vaccination mandates, employers face even greater management challenges. As the pressures on them have increased, many employers have come to realize they can’t rely on the government, the public health system, or local health-care-delivery systems for all of their needs. Instead, they need to tailor their investments to the unique needs of their employees and businesses — a core concept of population health — to unlock better health outcomes at lower costs.
Where Employers Should Invest Next
Given these experiences, it’s clear that employers should make these areas priorities for investments:
High-quality telemedicine and digital health. Post-pandemic, employers need to contract directly for these services and make them employee benefits or work with their third-party administrators and brokers to ensure that the plans they fund support them. They should include the virtual delivery of comprehensive primary care, psychiatry and other forms of mental health therapy, and digital health services to manage diabetes and chronic conditions.
Employers are well-positioned to set expectations that these services be high quality, conveniently accessed, and affordable. Furthermore, to ensure these services are available to all people who need them — including rural communities, minority communities, and individuals living in poverty — some employers may need to work with their local communities and public agencies to ensure that there is sufficient broadband connectivity, access to devices, and digital literacy.
Home-based services. Home-based care also increased during the crisis, which reflects the broader trend of people trusting and even preferring care outside of a clinic or hospital that’s located closer to where they are. Coastal Medical, an accountable care organization in Providence, Rhode Island, leaned on texting to stay connected with hundreds of their patients recovering from Covid-19 at home.
Originally developed for the elderly and Medicare population, home-based care — including house calls with lab draws and ER- and hospital-level care — has been expanded to working adults as well. Over two decades of research has proven that a model of care called hospital-at-home is safe and effective with lower rates of complications and lower costs. Presbyterian Health Services in Albuquerque, New Mexico, for example, leveraged its “Complete Care” and “Hospital at Home” programs to support in-home Covid-19 monitoring and avoided hospitalizations for the majority of its patients. Self-insured large employers should cover programs like this that have been proven to be cost-effective.
Self-testing. During the worst periods of the pandemic, people sheltered in place and were fearful of going out and thus preventative care — including cancer screening, routine vaccinations, and blood tests — dropped precipitously. With the rise in home-based care, there is renewed interest in at-home tests, including screening for type 2 diabetes, hypertension, and colon cancer. The U.S. Food and Drug Administration (FDA) has also approved at-home Covid-19 tests that provide results in 15 minutes that are now available over the counter (by mail order or pickup at the pharmacy). At-home tests are also available for the flu, urinary tract infections, and other conditions.
By covering these tests or contracting for them as part of a virtual care benefit or wellness benefits, employers can expand access to prevention and other cost-effective health services and ensure that the results get included in the patient’s medical records. For example, an article published last October reported that the response rates among patients who received colon-cancer-screening kits that a large health care system in California sent to their homes remained high despite the pandemic. These investments could improve the rates of employees undergoing recommended screening tests — and prevent unnecessary disease and suffering.
An integrated approach to mental health. Covid-19 also magnified the mental health crisis in our country and made clear the wide-ranging incidence of mental health problems such as stress, depression, anxiety, substance abuse, and suicide. About 70% to 80% of employees are currently experiencing mental health issues, a staggering increase from 20% to 30% pre-pandemic. Moreover, employers’ traditional approach to mental health — employee assistance programs — generally don’t work; for one thing, they suffer from low rates of employee engagement.
One innovative solution is an integrated mental health model developed for Temple University Health System during the height of the pandemic by Accolade, a personalized navigation service for employers, where one of us (Shantanu Nundy) works, and Ginger , an on-demand mental health company. The model gives all Temple employees and dependents unlimited access, through a mobile app, to mental health coaches backed by therapists and psychiatrists.
Rather than waiting for members to self-identify a need for help and download an app, the service uses claims and pharmacy data to identify and reach out to members that could benefit from the service — for example, someone with multiple sleep medication refills but no primary care visits. The model is based on years of research that has demonstrated a 6:1 return on investment from addressing chronic diseases such as diabetes in tandem with depression and anxiety.
It is also important to invest in training managers to recognize early warning signs and proactively connect employees to these resources.
Social needs and health disparities. The devastating differences in mortality suffered by Black and brown communities during the past 18 months are not unique to the Covid-19 pandemic. Decades of scientific research reveal that what matters most in determining a population’s health are income level, educational attainment, health behaviors, and environment (transportation systems, workplaces, schools, air quality, and access to clean water and healthy food).
While the responsibility for systemic changes largely falls on government and society at large, employers have the opportunity to influence the individual social needs of their employees for the betterment of their health. Employers can provide educational opportunities for low-wage earners to support professional advancement, subsidize childcare and pre-kindergarten, offer transportation benefits, and develop outreach programs to help employees who live in areas with shortages of health care professionals find doctors. Kaiser Permanente, for example, continued to host farmers markets for patients and employees during the pandemic to improve access to healthy foods.
Risk-based contracts. While the majority of large employers are self-insured, only a few — including Boeing and Microsoft — have entered into contracts that share the financial risk of health care costs with the entities that are most directly providing care to their members. This approach requires health plans and health systems to manage the risk of a population, measure quality, and share in cost savings with employers.
One example of a company that helps make risk-based contracting possible is Onduo, a digital health company managed by Verily, where one of us (Vivian Lee) works. For the virtual management of conditions such as diabetes, hypertension, obesity, and depression among their employees, employers can arrange to pay only when performance expectations are met — such as a lower overall blood-pressure level across employees or better management of blood sugars among employees with diabetes.
As the market matures, more effective models for risk-sharing and third-party services such as stop-loss insurance can help employers better manage their health care risks and secure access to better in-person or virtual care for their workers and their families.
Preparing for Value-Based Care
To succeed in population health and value-based care, large employers will need to take the lessons from their pandemic response and make permanent structural changes that reflect their ultimate accountability for their employees’ health and the total cost of their care. There are four critical actions they should consider.
Invest in medical expertise. Many large employers have long had brokers and benefits consultants advise them on plan design and vendor selection and management. But during the pandemic, employers built on this expertise by hiring medical experts such as chief medical officers, medical directors, and medical advisors. This expertise is relevant both for managing the health of employees during times of crisis and peace.
Continue to leverage data. Self-insured employers are entitled to access to anonymized claims data or data on utilization of their third-party services. With new federal rules mandating price transparency, employers also have the opportunity to work with their brokers and third-party administrators to ensure the care they pay for is high quality and reasonably priced. With this data, employers can start to tackle health care costs similar to the way they tackle supply-chain challenges and direct the use of digital health to those who need it most.
Offer navigation services. One of the big challenges for patients is simply understanding what kinds of benefits and services are available and how to find those that offer the best value in terms of costs and outcomes. Employers can help them by providing — or insisting that health plans or health systems provide — navigation services.
Forge partnerships. Large employers should forge alliances with others to improve the cost and quality of care. One example is an effort that Intel led in metropolitan Portland, Oregon. Another is the Dr. Robert Bree Collaborative in Washington State. Not all efforts have to be so ambitious: Simply by serving on the boards of local health systems, business leaders can create relationships that lead to better services for their employees.
In many respects, employers were the bright spot in the U.S. response to the Covid-19 pandemic. Now they can lead the way to a better health system in the post-pandemic era.