According to the Kaiser Family Foundation Survey of Employer Sponsored Health Benefit Plans, employers are the principle source of health insurance in the United States, providing benefits to over 153 million non-elderly people in America. Sixty-one percent of covered workers, including 17% of workers in small firms and 80% in large firms, are enrolled in plans that are either partially or completely self-funded. The number of large firms with self-funded plans has grown 20% in the last two decades.
The growth in self-funded plan design, an insurance arrangement in which the employer assumes direct financial responsibility for the cost of the employee’s medical claims, is not without reason. The self- payment of claims places the employer at-risk for health-related expenditures, therefore, dramatically increases their interest in employee health. Today, employers with an increasingly smaller workforce size are choosing the self-funded plan design for the following reasons:
- ERISA exempts self-funded plans from most state insurance laws.
- In a self-funded plan, reserve requirements are eliminated.
- Self-funded plans are exempt from mandated minimum benefit design, premium taxes and consumer protection regulations.
These advantages and other exemptions provided by the Affordable Care Act in 2010 have fueled the movement to self-funding. As self-funding continues to grow, so too does employer demand for population health initiatives designed to identify and reduce employee health risks.
In response to this demand, a growing number of disruptors have flooded the employer-centric population health space. On-site clinic companies, wellness vendors, analytic firms and plan design administrators deploy business models, and now partner with employers to manage and reduce risk. Recent examples include:
- Amazon: Amazon is partnering with primary care group Crossover Health to launch Neighborhood Health Centers near the company’s fulfillment and operations facilities. The centers will offer acute, chronic and preventive care, prescriptions, vaccinations, mental health services, physical therapy, chiropractic care and health coaching to their employees and their families. The goal of the Neighborhood Health Centers is to put employees in touch with primary care physicians instead of utilizing more expensive emergency or urgent care.
- Walgreens: Walgreens has teamed up with VillageMD to put full-service doctor offices in over 500 of its stores. The decision to expand the offering was made after five tests sites in Houston, Texas produced strong results and high patient satisfaction scores. The locations will be staffed by VillageMD’s 3,600 primary care physicians. Additionally, the partnerships will offer 24/7 telehealth and in-home visits. Walgreens hopes that the partnership with VillageMD will provide a doctor-pharmacist model that will increase medication adherence and provide better outcomes for individuals with chronic conditions.
- Walmart Health: Walmart Health is continuing to expand their in-store health clinics, adding Florida and Illinois locations to the list. The company already has clinics in three locations in Georgia and a clinic in Arkansas. The clinics offer primary care services, imaging, lab work, dental and mental health services, regardless of insurance. Walmart Health will continue to open clinics with the focus on bringing affordable healthcare to consumers.
In the execution of these models, health systems are purposefully disintermediated from the initiative and often pointed to as the reason health benefit expense continues to increase. Applied Health Analytics’ positions hospitals and health system as the preferred provider of community-based population health services. Applied Health Analytics links its proprietary risk analytics and intervention technology with health system physicians, products, services, resources and partnerships, to offer a complete array of evidence-based and locally delivered education, early detection and prevention initiatives. Employer specific data, stratified using Applied Health Analytics’ risk stratification and engagement technology, combined with the delivery of health system originated services, resources and solutions, provides an unparalleled level of population-specific intervention, delivered locally.
Today, employers understand their role as the purchaser of healthcare services and are demanding more from community-based hospitals. The movement away from “wellness” and into true, sophisticated, population health management is now common among employers across the United States. Employers now routinely engage qualified vendors capable of identifying and mitigating employee health risks to drive down related health benefit expense. Like never before, Applied Health Analytics’ leadership is witnessing a migration of thought among employers that creates the opportunity for local providers to differentiate themselves from competitive systems and gain access to the commercial market to enhance payer mix.
Contact Applied Health Analytics to learn more about direct to employer initiatives and to set-up a strategy session with a member of the executive team.