In June, along with rule of three, we were thrilled to co-host the inaugural Direct-to-Employer Executive Summit for discussion on current and future opportunities for provider-driven employer healthcare strategies.
The event, which featured special guest presentations from Leah Binder (CEO of The Leapfrog Group) and Lee Lewis (CSO of the Health Transformation Alliance), included thought-provoking presentations and breakout discussions at the critical intersection of providers and employers. We welcomed dozens of executives from organizations across the nation, including provider representation from physicians, administrators, systems, clinics, plans, CINs and ACOs.
By initiating meaningful dialogue across such esteemed organizations, our hope is that it accelerates and further informs the healthcare industry's rapid pace of change. Ongoing collaboration and strategic communication can be tremendous enablers of the sustainable change healthcare needs.
Here are some of the key points that this dynamic group of leaders were able to take away from the Direct-to-Employer Executive Summit:
- Employers are dissatisfied. According to a 2020 Leapfrog survey, employers don't feel prioritized by their plans, and the larger the employer, the more likely they are to give plans a lower grade. (It's worth noting that 17% of employers are pursuing direct contracting.)
- Build an employer-centric value proposition. There are several reasons employers come to the table, with the first being access, specifically in certain markets (e.g., mental health, primary care, etc.). Quality is something that stands out in claims or poor Leapfrog ratings. Next, employers are concerned with appropriateness, specifically when employees may be receiving unnecessary care. Lastly, employers are dissatisfied with plans that don't put clients first. In this case, they don't have control of quality/cost or customization in certain markets.
- Your conversations must go beyond cost. Address what the problems are and get past the issue of cost. Employers don't believe providers have the answer to cost problems. If an employer is struggling with behavioral health, providers can provide solutions (care, education, access, etc.). In these cases, talk to employers directly about quality/access problems and help address those issues.
- Dedicated resources are necessary. This is not easy work. Some of these can be a "heavy lift" and not the fundamental mission of hospital systems and CINs (sales, marketing, reporting, enrollment, risk management, etc.). Don't try to own it all! Figure out which verticals and horizontals your system should own, and in others, partner to gain a competitive advantage; employers will appreciate a comprehensive offering, rather than piecing together "one-off" solutions.
- Be prepared and develop a proactive approach. Consider glide paths to risk and Direct-to-Employer endeavors in order to plan better. A proactive approach is better than a required reaction to such endeavors. Begin with health system employees, then offer the market a compelling and proven value proposition. The transition into this business is not a fast one and can take more than a few years; it requires some strategic planning and dedication.
- Build authentic relationships. Brokers and consultants can be "friendlies" but first require an effort to build a relationship; offer simplicity, resources and a commitment to making their job easier. A well-organized strategy to serve "their clients" can be met with push back initially, but after relationships are built, it enables the Broker, Provider, and Employer to meet around a shared table, working to improve healthcare solutions for their employees.
- Know your customer. In any transaction, know your customer. That is hard to do because we've been conditioned for the customer to be the payer. If a large national employer has a small area of covered lives (e.g., 1000 covered lives) there's no interest in overall population. For a population that is widespread, the solution needs to be scalable. In areas of deep concentration (e.g., 100,000 lives), it makes sense to do a local, direct contract.
- Control primary care. Whoever controls primary care controls the patient, and whoever controls the patient controls the industry. The four main players are carriers, systems, independents, and employers. Employers need to take control, otherwise someone else will and they will be acting out of their own interest.
- Be willing to make bad short-term business decisions. You have to make short-term bad decisions to have long-term viability. You can do this if you simultaneously make short-term good decisions. Some companies that figured this out are Netflix (DVD vs. online streaming) and Apple (iPod vs. iPhone). Hospitals need to create a system that is wildly profitable at Medicaid rates. Other countries are delivering the same care for a fourth of the cost and in the end, it's better to choose this transition rather than being forced into it.
We sincerely thank all of the guests who took part in this special event, and hope that you were able to come away from it with a refreshed perspective as we continue to explore opportunities for employers and healthcare organizations throughout the country.
There are many more in-depth conversations to be had on this topic. If you would like to attend a future Direct-to-Employer Executive Summit, please contact us at [email protected].
Co-written by Josh Berlin, CEO, rule of three, LLC