Healthcare has been on a hyperinflation for many years and is often the most volatile expense that companies manage. As labor markets tighten, employers are taking a fresh look at the tools they use to foster an engaged workforce.
One emerging trend in the market is the consolidation of healthcare payers and providers. This change in the delivery and payment of healthcare impacts all employer sponsored plans. We watched the U.S. Justice Department block continued mergers of larger insurance companies only to have a pharmacy chain (CVS) move to purchase one of the largest insurers in the market (Aetna). The expansive footprint of these organizations to both deliver and manage cost may yield a national platform capable of managing costs.
Amazon, Berkshire Hathaway and JP Morgan signed an alliance recently stating their frustration of our nation’s healthcare system and the spiraling cost of healthcare. It is unclear whether this alliance will simply leverage their 1.2 million employee size to improve their performance or create something transformational in the industry. While they have not defined a path, “They decided their combined access to data about how consumers make choices, along with an understanding of the intricacies of health insurance, would inevitably lead to some kind of new efficiency – whatever it might turn out to be.”
We think that true transformational change in healthcare can only happen if these new entities can:
- Manage physician behavior
- Have adequate capital
- Aggregate enough lives
- Provide a broad clinical footprint
- Be a trusted brand
- Manage risk effectively
- And most importantly have the collaborative IQ to pull it all together.
Certainly, collaborative IQ is high for this most recent alliance of Amazon, Berkshire and JP Morgan; however, if new platforms for healthcare can effectively reach country wide, this alliance might impact the way employers provide healthcare benefits and the way we all access healthcare.
To effectively manage healthcare for companies in the mid-market, employers must not only understand the emerging trends in the market but also what’s driving their own costs. At HCW, we help our clients create innovative programs to control healthcare costs. Contact HCW today.