Reading the tea leaves
Insights and predictions on benefits and health care in 2020
By Alan Goforth | BenefitsPRO
In the 1950 film “All About Eve,” Bette Davis spoke the famous line, “Fasten your seatbelts, it’s going to be a bumpy night.” That might sum up how many brokers feel as they look ahead to the election year of 2020.
“The election will be the hottest topic in 2020, but most of what is discussed will not be implemented until further down the road,” says Emily Bremer, president and owner of Bremer Benefits in St. Louis. “The more urgent issue is that we are coming to a tipping point when it comes to the cost and transparency of health care that may not be able to wait until after the election. Surprise billing, pharmaceutical trends and hospital price transparency are making the news daily, along with the myriad of lawsuits cropping up on all sides.
“Without real government intervention or regulation, there is a wave of start-up companies and employer benefits strategies that is building to combat these issues using every tactic you can think of, from sending employees to Tijuana for their drugs to direct contracting with doctors and hospitals, and many more.”
Uncertainty about election outcomes goes hand in hand with another key issue on the horizon: economic uncertainty.
“The state of the economy has the potential to have a big impact for all of us in the year ahead,” says Dr. Arthur “Abbie” Leibowitz, chief medical officer, cofounder and president emeritus of Health Advocate in Plymouth Meeting, Pennsylvania. ”If there is a business slowdown in 2020, it could have major repercussions across the benefits industry.
“However, during the last recession, our business actually increased as many employers, including our clients, made changes to their health care benefits to curb costs and realized the need for an effective and inexpensive service to help employees deal with the changes and lower their overall health care costs. We’ll be watching this closely in the coming months.”
Predicting the future is always an iffy proposition, and especially so in a contentious presidential election year. However, although it is difficult to predict exactly what the benefits industry can expect in 2020, it is possible to determine which issues are likely to dominate. BenefitsPRO asked a group of industry leaders for their insights on what to expect on several hot-button topics.
Election and politics
“The 2020 election will decide the future of the American health care system. We know voters list health care as a top issue, so I expect to see candidates spending a significant amount of time on the campaign trail addressing their specific vision for how our system should work. I view it as a responsibility of our industry to help provide our clients and family members with the appropriate context for evaluating the proposals that will be at the forefront of the debate.”
—Scott Wham, director of compliance services, Kistler Tiffany Benefits, Berwyn, Pennsylvania
“Democrats believe that health care is an issue that voters trust them with more than they do Republicans. It appears unlikely that Republicans will promote the repeal of Obamacare like they did in earlier elections. Republicans believe that tagging Democrats with Medicare for All may make voters concerned about losing their current employer-based health care and increased taxes.”
—William Sweetnam, legislative and technical director, Employers Council on Flexible Compensation, Washington, D.C.
“Politics and health care reform are closely connected in the current environment. Health care reform, the Affordable Care Act and other proposed plans are front and center on both sides of the aisle, and with the election right around the corner, I expect this focus to remain. While it’s too early to predict what the final outcome will be, we do know this will be a key issue in debates next year.”
“Medicare for All will be front and center, but I’m pretty sure that not all Democrats agree that this is a good solution. Use of the term ‘Medicare’ is intentional, as it has positive connotations with most Americans. However, Medicare for All is not Medicare as we know it today. People need to get clear on that and be educated.”
—Suzy Alberts, account director, Comprehensive Benefits Inc., Southfield, Michigan
Health care reform
“It remains to be seen how employer-based health plans (including consumer-directed health-care plans) will fare under a Medicare for All program. At one end of the spectrum, the favorable tax treatment of employer-provided health plans will be eliminated and everyone will go into a Medicare-like health plan. On the other end would be the continued availability of employer-sponsored health plans, giving everyone the opportunity to buy into a lower-cost Medicare-like health plan as an alternative. I anticipate a spirited discussion, particularly since labor unions, an important constituency of the Democrat party, want to continue to provide tax-free health care benefits as part of the collective bargaining agreements negotiated for their members.”
“This used to mean health insurance reform to most people, but I think the tide is finally turning. People are beginning to understand what all of the cost drivers are. And hopefully that will lead to better conversations and more innovation going forward.”
“The only health care cost issue that’s even being considered is whether the government becomes the single-payer. Then they can set prices. I don’t think people understand the repercussions that would have on health care in the United States. Providers can’t survive on the Medicare pay scale.”
—Ken Stevenson, vice president, employee benefits, Earl Bacon Agency, Tallahassee, Florida
Health care delivery
“Domestic tourism, reference-based pricing and specialty drug programs are the three areas of greatest impact to the bottom line for organizations. While not all employers are ready, we are at least educating them on what is in their market. Employers are looking for innovative solutions to solve their complex problems, and this is exciting to me. The conversations are shifting. We are seeing a lot of conversation around the RAND study—it’s bringing providers, pharma and carriers/TPAs.”
—Susan Rider, consultant, Gregory & Appel, Indianapolis
“Primary care continues to be a challenge. We need more physicians in this space, and hopefully DPC and concierge medicine will make internal medicine more attractive to medical students and residents as a field. The ER also continues to be a problem. I am grateful for the many terrific urgent care centers that have cropped up around the country, but there are just times when you need the ER.”
“I believe we’ll continue to see a push for more accessible primary care delivered by non-physicians. Access to primary care is foundational to positive health outcomes, and employers of all sizes are interested in removing barriers to primary care for their employees and their families. While many large companies offer on-site health clinics to their employees (as well as their families), the vast majority of companies cannot afford to maintain an on-site health clinic. I’m excited by the number of nurse practitioner/physician assistant-led primary care clinics entering the market looking to partner directly with employers at a reasonable price-point.”
“Expect increased implementation on all fronts. Our agency uses quoting tools, online enrollment portals, CRM software, new group online submissions to the carrier, etc., that were not in place even two or three years ago. While there is a cost to these tools, they create greater efficiency in our office procedures and allow us to streamline. We can also more easily access client information and provide quicker service. Carriers are increasingly using technology to track and manage care, claims and behavior, as well.”
—Debbie Stocks, Your Benefits Partner, Glen Allen, Virginia
“What most people don’t know is that there is a movement behind the scenes to get away from 834 EDI data exchange by health carriers. It’s been done that way since the mid-1970s. If Employee Navigator is successful with its pilot of UnitedHealthcare changing to HTML, that could be a game changer for data transfer.”
“We will continue to see more use of technology to streamline every aspect of the benefits industry. It provides better access to information to the consumer, results in fewer errors and makes managing benefits much easier. However, not all consumers will be adopters due to lack of access and education.”
“Technology is both a boon and a bane to our industry. Health insurance was way behind P&C and other industries. Now we are playing catchup and experiencing growing pains. Every time someone comes out with some fabulous new app or website, all I can think of is the direct in-person communication that too often will be eliminated because it isn’t ‘needed’ anymore. While I am grateful for the technology tools that make it easier to communicate across distances and store information in an easily accessible way, I worry about formats that focus more on being pretty than being functional, and result in losing direct employee interaction.”
“I believe we will continue to see major industry players looking to consolidate and create economies of scale. Some are likely looking to be a player if we eventually see more health care reform (i.e., Medicare for All). The FTC and other agencies will be closely scrutinizing these deals so we don’t create a whole new set of problems with markets controlled by one or two companies.”
“Across the country, we’re seeing hospital systems consolidate at a rapid pace and compete with each other to own the ‘feeder points’ throughout their regions. As more physician practices are owned by hospitals and consolidated by health systems, the landscape of care delivery will continue to change. Access to care will continue to be a consumer challenge and costs may rise as availability of other options decreases. We also expect continued increases in accountable care, patient-centered medical home care and other integrations across the medical care system. Physicians will take on additional financial risk for population management and outcomes as patients are likely to be increasingly confused by the nature of these new arrangements.”
“We continue to see consolidation. Personally, I work for a firm that remains fiercely independent and that is not up for sale. This has allowed us the fortune of being able to remain nimble to meet client needs.”
“Customer service is still the top priority; it’s how I have grown my business and retained my clients. We’re just streamlining our operations to be more efficient and effective in dealing with client service.”
“This year is a difficult one, with double-digit increases. We continue to stress the importance of developing a three- to five-year strategy rather than a Band-Aid approach. We do work with many employers that are forward thinking and want to do what’s right for their staff while incorporating cost-containment strategies to help for the future. Communication is key, and it’s not a once-a-year strategy, but rather several touchpoints throughout the year.”
“Flexibility has been my watchword since 2010, and it will be in 2020 as well. Laws and regulations change, clients merge with other companies, carriers come out with new products, or new opportunities arise. No two years have been the same since the ACA appeared in our lives. As a broker and employer, I try to keep an open mind. I am always on the lookout for new ideas and revenue streams and know I have to be able to let go of what isn’t working, even when I feel like I have invested my heart and soul into it.”
Reasons for optimism
Even amid the uncertainty, however, brokers have reasons to be optimistic as they look ahead to the new year.
“I always have hope,” Bremer says. “I am probably the only optimist in insurance, but I believe in this country and our capabilities. Change and transition are hard for everyone, and we have definitely been through a lot of change over the last nine years. However, I always remember that this is the country that invented personal computers, GPS systems, 3D printing and lasers. Not to mention putting a man on the moon.
“It is hard to believe that when it comes to health care, our best idea is ‘let’s just do whatever Canada is doing.’ At our heart, we are a nation of innovators, but we need to get to work and stop waiting for the politicians to solve our problems for us.”
Brokers’ resolutions for 2020
It wouldn’t be a new year without a few resolutions, and several brokers shared their hopes for the industry and their own businesses in 2020.
“From a business perspective, I will be focusing on compliance and technology. Making sure that our clients have their bases covered from a compliance perspective is always a moving target. We also need to work toward getting our clients up and running on technology platforms that streamline benefits management for them and for us. Because our agency’s client-base tends to be in the small- to mid-size market, it’s more of a challenge to find vendors that are a fit.”
“In the year ahead, we will continue to develop and innovate our services to meet the changing needs of consumers in the ever-evolving health care environment.”
—Dr. Arthur “Abbie” Leibowitz
“Keep an open mind, listen to client requests and find solutions that benefit both the employer and employees.”
“My resolution for myself and my employees is to step back and make time to put on our own oxygen masks first. We have been running and gunning for so long it has become the norm, and you have to take care of yourself and your health. I went to a great local women’s conference this year where a non-profit leader said, ‘You cannot pour from an empty cup.’ So my resolution for 2020 is to stop feeling guilty and fill that cup up to the brim.”
“We will continue to promote consumer-directed health plans as a means of helping employees become more conscious of health spending and providing them opportunities to finance their health care expenses. Even if the United States moves to a Medicare for All world, individuals will need to be responsible for some of the costs of health care and consumer-directed health plans should continue to be looked at as a way to help employees finance those health care costs.”
“2020 should be the year our industry offers a zealous defense of our value proposition. I’ve seen a significant amount of ink in books, news articles and LinkedIn posts dedicated to questioning the value and motivations of our profession, and this should be the year we fight back by telling our story or, even better, having our clients tell our story for us.”
“It’s not a resolution, but keep pushing the conversation for change. But the change is addressing delivery and outcomes tied to health care cost, not whether private insurance or government should be the payor but are just abused mechanisms for financing the ever-burgeoning cost.”