I have written a lot about how consumerism is developing and growing within the healthcare industry, as well as the need for disruptive thinking and improved processes. In this post, we’ll take a look at and understand some of the forces at play on the benefits side relating to consumers, and how consumer action is affected by the options offered by employers.
In 2014, Mercer instituted a National Survey of Employer Sponsored Health Plans of almost 2,600 employers and published its findings in Spring 2015. Surveyed employers included small (10 to 499 employees), medium (500 to 1999), and large (2000+) organizations.
Survey results indicated that although PPO plans were still the preferred option for employee healthcare coverage, enrollment in Consumer Direct Healthcare Plans (CDHPs) surpassed HMOs at 23%, compared to the latter at 16%. CDHPs saw a 30% increase over the previous year’s 18%. The number of employers offering a CDHP is expected to increase from 27% to 36% by 2017.
The report also showed that 3% of large employers are using a Private Benefits Exchange for their employees, moving from a paradigm of defined benefits to defined contribution. This number is expected to increase to 28% within five years. The shift will be a significant one as employees are likely to make decisions from a consumer perspective and opt for lower-cost premium options, which will lead them to higher deductible plans.
Along with the changes occurring due to Obamacare—such as consumers opting for silver and bronze-level plans with higher out-of-pocket costs and providers being asked to work within a population model—you can see what effect these new models can have on revenue cycle management and financial margins.
This market situation leads to opportunities for the vendor community to better analyze provider needs and develop solutions to help them serve these new healthcare consumers who have increased financial responsibilities. Vendors need to be proactive in creating value and efficiencies for their healthcare partners. In order to do so, many vendors will have to determine whether they want to provide wide, multi-issue solutions or offer best-in-class type products that will help healthcare organizations meet a specific segment of service. Either way, vendor organizations that best understand the medical banking landscape and the evolving needs of providers will have the attention of medical executives. As a result, the banks are primed to play an important role and lead the way.