The situation has become dire in the US. “About one in five Americans currently has medical debt in collections,” writes Dr. Marty Makary in The Price We Pay. “Half of patients with certain medical conditions, such as women with stage 4 breast cancer, now report being harassed by a collections agency for their medical bills.” It’s healthcare oppression.
As CEOs of companies that are investing in our employees’ healthcare, we have a responsibility to demand better. The status quo is not OK. You’re not getting a return on your healthcare investment, and some of your employees are suffering when they access the healthcare system by incurring massive debts.
If you think your health coverage is protecting your employees from medical debt, about three-quarters of medical debt is caused simply by deductibles and the patient’s out-of-pocket expenses. In addition, regardless of the industry you’re in, your company can help stamp out the leading cause of bankruptcy in the US. So not only is it the right thing to do, but it also makes business sense. Here are actions business leaders can take to address this issue.
Create a medical debt relief program for your employees
The first step is to protect your employees from medical debt. For example, say your company spends $500,000 a year on health insurance premiums. If you set aside another $50,000 per year to address medical debts incurred by your employees and their dependents, you can likely shield them from bills they can’t afford.
You’re already responsible for your employees’ health care. Why not take that further to ensure they aren’t left with a huge bill? Doing so will strengthen your connection to your employees and help them be more productive and happy.
Hold your vendors accountable
In addition to saving your employees from crushing bills, covering their medical debts will give you insight and information about the gaps in the health insurance you’re providing to your team. Then, use that information to demand better from your health plan, benefit consultants, and other vendors that supply your coverage.
For example, a company like Google spends an estimated billion dollars a year on its 100,000 employees and dependents. And they have no idea who’s suffering from medical debt. Using $10 million to fund a medical debt relief program would help suffering employees with medical debt and get them that information, which they can take directly to their health plan.
Imagine the head of benefits sitting with a health plan executive and saying, “These 100 people owed $1 million last year in medical debt for these ten reasons. I expect an answer tomorrow on why this happened.”
What’s that person going to say? They better get the answer. And if the answer isn’t good enough, this employer should take their billion dollars elsewhere. The bottom line is they’re buying a product that isn’t performing as promised.
Don’t accept excuses. Tell your health plan, “Oh, you didn’t have an anesthesiologist in the network in southern California when this person got in a car accident? How is that my problem? And it’s definitely not that person’s problem. You said you had a robust network. That’s what I pay for.”
Lower your healthcare costs
While large employers have leverage in the marketplace, smaller companies’ voices are not always heard. That should not be the case. No matter your size, you can lower your healthcare costs without compromising the quality of care and use those savings to fund a medical debt relief program for your employees.
For example, it is possible to negotiate better contracts with PBMs to lower prescription costs. In addition, there are solutions available to mitigate the massive price tag of specialty drugs for conditions like hemophilia. You can create a custom cash price network that provides a lower cost on prescriptions outside of insurance for the drug categories your employees use most.
Health plan renewals are often presented as if there are no options or flexibility. Make sure you ask the right questions and do your due diligence so that your partnership with your benefits consultants can bring costs down instead of seeing them rise every year.
Don’t accept the blame
If you get sick and go to the hospital, and you’ve been paying health insurance premiums for the last 15 or 20 years, and you end up with a bill for $10,000 because you needed care, how is that fair? How is that your fault?
Right now, business leaders and consumers are letting the players in the healthcare system blame patients for medical debt. Even the term “medical debt” implies wrongdoing. I prefer “medical oppression” or “healthcare profiteering.” This is the healthcare industry’s problem. It created it. It profits from it. Everyone in the healthcare industry needs to work together to find a solution. Employers and patients are innocent.
Changing this dynamic starts with learning the language and the system. If you’re in charge of a business, don’t let the complexity of the healthcare system scare you off. The complexity is part of the game. Those responsible for healthcare oppression count on you getting overwhelmed and giving up.
Instead, find an ally. Find people that will talk to you in straightforward, plain language and who will be transparent and clear. If you’re not getting that today, you can assume you’re not getting a good value on your healthcare investment, which is an investment in your employees and business.
Suppose you’re a CEO and don’t know how many of your employees suffer from medical debt. In that case, you have a significant blind spot on their well-being and the social determinants of health for your organization. I would challenge you to be proactive about gathering information and addressing this issue. If business leaders continue to ignore it, it will only get worse.