Goodroot chief commercial officer and CoeoRx president Erik Wallace recently joined host Jonathan H. Westover, PhD, on the Human Capital Innovations podcast to discuss rising healthcare costs, what that means for small businesses, what employers can do, and the importance of knowing what the incentives are for people who are making or influencing decisions. Below are some of the highlights of what Erik had to say.
Listen to the full episode on the Human Capital Innovations podcast.
On working for Goodroot: “Part of the excitement of this conversation is just how dysfunctional our healthcare system is in the United States. It is a target-rich environment. So you build and you build strategy, and it’s actually turning out to be a pretty good place to be.”
On small businesses and premium increases: “Ninety-nine percent of all employers are less than 500 employees in the United States. So this small-employer market is the lifeblood, in my opinion, of the US economy. And what’s interesting about our healthcare design, and especially specifically the benefit designs that are available, … it’s basically been this sort of industry-consistent norm that you have to be fully insured. And when you’re in that design, you do not see your data of what your actual costs are. And it is pretty consistent … that you’re basically just seeing double-digit premium increases. I would sort of articulate that as kind of the trap that we’re trying to break those groups out of.”
On the critical element: “Having pathways and solutions is one element. Having employers and, most importantly, members just get more engaged in the healthcare process is a critical element.”
On who is incentivized: “Benefits for employees are wildly important for retention, creating a culture within an organization. So whenever you talk about change in anything, whether you’re going from one plan to another fully-insured plan, let alone doing something more disruptive, the disruption to the members is typically where those pathways and options start to die. And then the industry and the norms start to fan those flames. And then incentives start to play a role in that. So you think about your broker. Well, how are they incented? And yes, they are incented on you choosing a plan, but they’re also incented on you renewing. And the renewal bonuses are, if you actually peek behind the curtains on that, are shocking. To keep that group in that lane renewing, and they get a significant compensation for that. So that person is incented to fan the flames of ‘don’t go down that other path.’ Just renew and swallow this premium increase.”
On what employers need to do: “They need to be having a transparent conversation with those who they are paying to guide them on those paths, their brokers. They should have a conversation about: What is their strategy? Where are they today? Where should they be going? What do they want to explore? And I think it should become more than engaged, but driving that strategy forward. That’s the first piece. I think there’s another layer behind that, which is understanding the incentives.”
On what savings can do: “Get engaged, and just know that there are paths out there that are real. … Some of my clients, it’s sort of interesting to see the light bulbs go off on what they could do with savings. They can buy down the benefit burden from the employee perspective, while delivering better care, better access. Some add and invest in people and bring more talent on. Some of the savings are really meaningful.”