In this final blog of a three-part series (you can read Part 1 and Part 2 if you missed them), I’d like to look to the future – not only the future of private exchanges, but the future of benefits and health in the United States.
We are living in a time of tremendous innovation in the world of health care. However, unlike previous efforts at driving improvement in the world of benefits, this innovation is being driven from the outside. While this innovation has propelled heretofore unimagined changes, it often seems that in the rush to monetize new technology, valuable opportunities that don’t fit the “unicorn” profile are ignored and sometimes lost forever. Or they do succeed and then are acquired by competitors whose goal, all too often, is simply to remove them from the market.
This is true not only in health care, by the way.
When I think about the future of private exchanges, I am simultaneously enthusiastic and worried. Enthusiastic because we have a foundational idea and technology that has the potential to enable a sea change in benefits. And worried about what may be lost if health care technology and exchange providers focus solely on accelerating growth in a race toward that always elusive “liquidation event” and employers focus solely on controlling and reducing cost in the hope to “bend the trend.”
It occurs to me that the real promise of private exchanges may not lie in the efficiencies the technology makes possible only in the employer benefits market. Instead, the real promise may lie in an exchange platform’s ability to transcend benefits and become a “hub for health.”
Where’s the rub?
With all the innovation and new technology being pumped into the employee benefits arena, a deeply imbedded culture of sales continues to dominate its definition of success. That culture is a holdover of the system evolved from an early 20th century model – initially set up to sell life insurance door-to-door. The early life insurance carriers built up vast sales networks comprised of both employed sales teams and distribution partners (general agents, brokers, etc.).
It is a model particularly well-suited to selling insurance – similar to selling auto insurance. But looking to this market to drive changes in health care is like looking to State Farm to invent speedy oil change services (like Speedee or OilChangers). While auto insurance is critically important and the underwriters may understand the issues drivers face in aggregate, they are not experts in the maintenance requirements of my 20-year-old Chevy Tahoe – nor do they care to be.
A hub for health
I believe the future of health care, and the future of employer-provided health benefits in particular, will require a different paradigm. Not the paradigm of “one size fits all” health care that has been prescribed by the Affordable Care Act (ACA), but a paradigm of “one size fits one.” A paradigm of options, allowing – no, asking – you to take an active, dynamic role in engaging in your health and your health care.
Consider the publishing industry as a model of the change that is coming. For much of recent human history, publication and distribution of news, information, literature, music, movies, etc. was tightly controlled in the hands of a powerful cartel (watch this interview with Mark Gaunya of Captivated Health for a terrific comparison to health care). It has only been in the last 20 years, with the rapid spread of the Internet and related technologies, that the model has changed. In simplified form, it started with Amazon – selling and distributing books online, then moving to electronic publishing (eliminating “books” altogether). And now, even that publishing model is being challenged as many writers today choose to self-publish on the Web in a variety of mediums.
Many “brick-and-mortar” book distributors and sellers were displaced. Many adapted and continue to thrive. And even “Amazon the disrupter” has been forced to reinvent itself, branching out into retail and even Web-hosting (leasing out the robust technology they developed to support their core business).
Amazon didn’t replace the publishing business. We still have books. They simply changed the model to give the buyer more control. And in that change, spawned new options for both buyers and providers that could never have been anticipated. That change was NEVER going to come from within the publishing business.
What if we approach private exchanges in the same way? Instead of seeing the technology only as a way of efficiently and effectively distributing insurance, what if “exchanges” were to evolve into hubs for everything to do with the health of employees? Don’t be afraid, the old system will still be there for those who can’t or won’t engage in the new model – just like books – but will slowly morph away as more and more people become accustomed to the shift.
Technology is like a box of chocolates
A skeptic, or perhaps a pragmatist, would be right to say the future is always farther off than we predict, but it is also always closer than we ever imagined. Star Trek, 2001: A Space Odyssey, and countless other works of fiction envisioned a rate of progress we have yet to achieve in some areas – but could never foresee the actual accelerated progress we’ve made in others.
When it comes to predicting the future, it seems we have the most difficulty anticipating the stuff that is derivative and right around the corner. Did anyone actually think we needed an iPhone until Steve Jobs said, what if we put a phone together with a music player, together with your planner, together with your camera? And from that question has come a vast library of derivative technologies and “apps.”
Successful private exchanges, as I said in Part 1 of this blog, have evolved to a state where the technology behind the platform allows for open architecture. Simply put, this means the technology can connect any number of carriers and other vendors to an employer, while connecting with employees in a purposeful, anywhere, anytime, on any device fashion. Derivatives are coming.
In this respect, exchanges are increasingly becoming more than just a place to fill a benefits shopping cart. The ability to deliver employee education, communication and, with a dash of live human interaction, advocacy, drives efficient, effective utilization and nurtures healthier, happier employees. Enrollment automation, employee experience management and data capture reduces administrative burden while empowering sound, fact-based decision-making.
How do I apply this to my company benefits?
Free to focus on high-value activities, the HR team has an increasing opportunity to contribute to the long-term strategy and, ultimately, the success of the organization.
The most progressive employers are re-focusing their efforts in a new way. Focusing on “engaging” the employee in all aspects, with benefits as only a part, although a still very important part, of the experience. Focusing on employee engagement instead of just dollars and spending. In this model, the primary role of the HR department is to create an engaging employee experience (including health care).
A raft of studies has shown healthy, engaged employees produce better results across the spectrum of business performance indicators and human performance indicators. In other words, these businesses engage employees by contributing to their opportunity to fulfill their personal and family goals and dreams. These results, by the way, far outweigh the potential costs or cost increases looked at narrowly and quarterly or annually.
As this becomes the model for a growing number of employers, they will only be interested in working with advisors who have the ability to make a significant and measurable contribution to the success of employer/employee relationships.
Out on a limb
I’m not sure private exchanges are the future of benefits, but I am quite sure the future of benefits revolves not around insurance or providers, but around buyers and consumers. I believe if we start taking into account what will be coming as a result of the advancements and innovations around people’s health – not just health care – it is not far-fetched to see exchange-type technology evolving into a hub for health.
The potential to go beyond insurance and into health could become the next wave of exchange innovation. It is not hard to imagine a platform built to engage employees in caring for their own health.
What if, for example, wearable technology was used by employees to self-monitor their activity and other health indicators? The device could provide the employee with instant access to a world of information while the data collected could be used to acknowledge and encourage healthy habits, anticipate health risks, and provide insight into the effectiveness of health and benefits strategies. Google is already working on a digestible technology that can do internal scans and then transport itself close to a wearable (an Apple Watch for example) and download the scan cheaper, faster, easier and less intrusive than even an MRI.
Stranger things have happened. We’ve gone from news reports of Google working on self-driving car technology only a few years ago to Uber deploying self-driving cars in the city of Pittsburgh, Pennsylvania, (Go Steelers!) as I write this. I’m not sure many people saw that coming that quickly
It’s déjà vu all over again
I thought I’d close by being a little bit contrarian. While I expect incredible innovation to continue and even accelerate in the world of health care, I also believe in the value of much of the underlying structure established to support the current system. Like the publishing industry, that structure will likely continue so long as it continues to do two things: 1. Provide value, and 2. Adapt to the innovations to come.
An example of both comes from Webvan. From its explosion on the scene in 1999 until its ultimate demise in 2001, many smart people said Webvan had “reinvented” the grocery business. Goodbye brick-and-mortar grocers, hello groceries ordered online and magically appearing in my kitchen. I live in the San Francisco Bay Area and nowhere else were people more certain that it was the end of an era. What happened? Many things, but importantly, the current providers in the industry, brick-and-mortar grocers like Safeway, adapted. As they say in politics, incumbency has its advantages.The need for healthy employees engaged in a productive, mutually beneficial relationship with an employer will never go away. So I say let the innovations come. Some will be great, some… not so much, but all will move us in a new direction. I for one am excited to be at the leading edge of one of the most innovative, interesting and exciting industries in the U.S. – employee benefits.