As healthcare costs rise, employers are at a crossroads — deciding whether to stick out a traditional insurance model or explore alternatives — according to Sidecar Health Chief Marketing Officer Kevin Knight.
Sidecar Health is an insurer that works with employers and covers the average local cost for care without networks or prior authorizations.
“These companies are facing a very real decision,” Mr. Knight said on a recent episode of the “Becker’s Payer Issues Podcast.” He said companies will no longer be able to focus on core aspects of growing their business — like research and development and hiring new staff — if health coverage continues to be unsustainable.
“I think of this as being very parallel to what happened in the 1980s. When my dad graduated from college and took his job, which he had for 40 years and only recently retired, he had a pension. Today, almost nobody has a pension,” Mr. Knight said. “In the ’80s, pensions became too expensive, just full stop.”
Then there was a pivot in the conversation on retirement benefits: “We’ve got to put people in charge of their own money,” he said. 401(k) plans emerged.
“We’ve got to get consumers engaged in their own healthcare,” he said. “But I appreciate that it’s scary to do something different, but we have to take courage in the fact that it is way scarier to do nothing because these costs are completely unsustainable.”
President Donald Trump has used similar language when critiquing the ACA, instead calling for subsidy dollars to go directly to consumers. However, he has not yet outlined a specific plan to do so.
Health savings accounts could be one mechanism. Despite being established with bipartisan support — and then coupled with the recent direct-to-consumer push in healthcare — Mr. Knight said one obstacle has interfered with execution.
“The thing that’s been holding HSAs back is the simple fact that, while the theory and the concept is nice… if [people] cannot easily access price information, quality information — the types of data points that people use in making decisions for buying anything from shampoo to a new car — then how are they going to be able to effectively use an HSA?” he said. “There is nothing systemically preventing us from publishing the prices of every service that every healthcare provider offers, except for enormous resistance from the incumbents, who stand to gain everything from the persistence of our broken system.”
Still, Mr. Knight said fostering competition to challenge traditional models is the key to improving healthcare — and many employers have their doors open.
“Almost anybody is up for a conversation on how they can materially lower their healthcare costs, and the reason for that is healthcare costs have finally gotten so expensive that people are being forced to explore alternatives,” Mr. Knight said. “Employers are very often the leaders of change in this country.”
Mr. Knight predicted that, in three years, people will “be astonished” at how fast employers transition from legacy, network-based approaches to having at least one or two other viable, mainstream alternatives.
“The one thing they’ll have in common is that they will put employees in a place where they are entrusted and empowered to treat healthcare dollars like their own,” he said.
At the Becker's 5th Annual Fall Payer Issues Roundtable, taking place November 2–3 in Chicago, payer executives and healthcare leaders will come together to discuss value-based care, regulatory changes, cost management strategies and innovations shaping the future of payer-provider collaboration. Apply for complimentary registration now.