In the past year, I have attended some of the country's finest symposiums on the future of healthcare. There is little doubt in the minds of senior healthcare decision-makers that we are reaching a critical stage in the evolution of our healthcare system, needled by powerful pressures from all sides: Physicians, Hospitals and Health Systems, Employers and Employer Groups, Medicare and Insurance Giants, and especially Consumers.
As a rather ominous litmus test, whenever a presenter in a keynote or breakout session brought up the subject of healthcare reform, almost without exception there have been shouts from the audience of "Insurance Reform"!! I found this shocking and wanted to learn more. I made note of who said what and cornered them afterward.
Indeed, private conversations with these people reveal a great deal of hostility toward the health insurance industry. They speak of the drag to the system from health insurance's continuous mantra of "deny, deny, deny" regarding claims and billing efforts on the part of hospitals and physicians alike. They harbor ill will of the stratospheric profits garnered from a health delivery system that once held profits of that magnitude for themselves. They level their gazes squarely at health insurance for presumably lowering quality of care in favor of the almighty dollar. The most oft-cited statistic was that 37% of every healthcare dollar spent in America went to the health insurance giants, with virtually no value added to the equation as a result.
Even more ominous was that these aren't people on the fringe of society... they are the healthcare leaders of today. The decision makers who spoke are at the top of their game. They have reached the senior decision-making levels of their health systems and speak from a position of authority. These are the voices of hospitals and physicians alike, and their vocalizations are only getting louder.
They are continually invited to address congressional hearings. They are on the speaking circuits. And most importantly, they are in touch with consumers who are taking control over their own health accountabilities.
Yes, it seems that health insurers today are in bad stead with their constituents. In recent polls, and this is certainly no surprise, most American consumers of healthcare insurance feel that their health insurance company is a necessary evil, a reality that most people would rather not pay into but do so because they are concerned with rapidly rising costs and potential catastrophic care costs. More importantly, the employers who try to find the best value for delivering health insurance plans to their employees, feel similarly about health insurance companies as partners in crime. Truly, employers are feeling bullied by insurers who float a reasonable package this year to get the business, only to increase costs by as much as 25% the following year. Who wouldn't be affronted by that scenario?
Ok, so it sounds as if we are all ganging up on the health insurance industry, right? Actually, consumerism has reached a critical mass -- individuals are now shopping for the right plan, families who can afford health insurance are opting in favor of streamlined catastrophic-only plans and pocketing the difference to self-fund health costs, and people around the world are sharing information about disease management, treatment approaches, physician and hospital grading, and a world of other healing arts data. If the Giant Ogre in this story is the Insurance Carrier, then the Consumer is now empowered to become Jack and his Beanstalk. Jack will wield the power of consumerism to make more informed choices, and the other players in healthcare are taking notice and paying homage.
And that's why I believe that Health Insurance companies have an incredible opportunity to shift the paradigm in which the customer sees himself. What would it look like for consumers to say "I absolutely love my health insurance company because"... and then fill in the blank? Sound far-fetched? Many health insurance execs are considering this very question. They point to a fragmented industry with lots of players, no true leadership among them, and general disappointment in how broken many systems really are.
Savvy health insurance companies are now looking at how consumers access their healthcare, how they pay for it, and how they will need to rely upon it in the future. These decision-makers are now tapping the minds of customers and prospective customers to discover new ways of serving them, so that they actually can add value for that 37 cents. Yes, we all know the spin that health insurers use to make us believe they are offering something special like EAP services, on-call 24-hour nurses, and plan administrator services.
Yet the insurance industry could step up to the plate and help us to grade physicians in their network based on experiences, capabilities, and outcomes. The insurance companies might actually generate loyalty among employer groups by helping to manage the health needs of employees through mostly preventative and treatable approaches, so that workers are kept productive and so that the insurance company partners to keep costs from escalating more than perhaps 2% each year. Consider how well received an insurance company would be if they offered plan choices that truly optimized customer needs, rather than square pegs fitted awkwardly into round holes.
This is the opportunity of what Andy Grove called the Strategic Inflection Point for the industry of healthcare, and no one player is more suited to that role than Health Insurance companies. It will be interesting to see if any of them come forward with the leadership and provocative message necessary to change the way people currently see them.
What are your thoughts? Do you agree that all the other players consider health insurers to be the nemesis of healthcare reform? Is it deserved, or should physicians, hospitals, consumers and the government shoulder the accountability for a broken system? Do you believe health insurers could muster this kind of paradigm shift? And which ones are the likeliest candidates to succeed at such a triumph?
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