Strategic and Nontraditional Steps to Bend Your Company's Health Care Curve: A #SHRM19 Interview with Dr. Wade Larson
Benefits, wellness programs, medical insurance/coverage - so much ugh!
These topics can be quite tough for even the seasoned HR practitioner. As medical insurance premiums continue to rise, more and more employers are cutting benefits - increasing out of pocket maximums and deductibles, reducing networks, cutting coverages altogether. What's infuriating to me is how many HR practitioners look to their brokers as the resident expert on the subject and don't spend enough time truly understanding the benefits landscape and other creative ways to build a benefits package without having to cut important benefits and also **gasp** save the company money.
This particular topic is a painful passion of mine. I say "painful" because, no offense, dear colleagues, but HR professionals are woefully uninformed, uneducated and ill prepared to provide solid leadership when it comes to benefits.
There. I said it.
There are many wonderful broker-partners who truly do look at the relationship with their business client as a partnership and have both the company and their employees' best interest in mind. But, mind you, as is often the case in business, incentives, commission structures and bonuses can be quite persuasive, and can distract from what should be done versus what can be done. This is not where I go on a diatribe about brokers, commission structures, and showing up once a year at renewal - I'll save that for another post and another time (when I'm feeling particularly snarky). Suffice it to say, having the right partners is critical.
I implore you. Taking the time to understand medical insurance coverage, healthcare (**ahem** spoiler alert - health insurance and healthcare are not synonymous), the healthcare supply chain, what is actually driving healthcare (and insurance) costs, how claims are paid, differences between fully insured, level-funded (or "partially self-funded") and self-funded (self-insured) options, what preventive healthcare really is, and other benefits that you can implement to augment your plans will vastly improve your company's bottom line, and I would strongly argue, your employees' health outcomes, as well. Once you have a better understanding of how all of this works, you'll be in a much better (and stronger) position to identify benefits consultants, strategists and brokers who will partner with you to bring strategic, innovative, cost-saving and outcomes-focused solutions to your business.
I was so excited when I found the session "Strategic and Nontraditional Steps to Bend Your Company's Health Care Curve," with speaker Dr. Wade Larson. While we haven't had the chance to speak in person (yet), I feel like I found a kindred spirit in this space. I couldn't wait to connect with Dr. Larson on my questions and share his incredibly insightful and important answers with you:
Stop saying “Someone oughta” and start saying “I’m gonna”.
Q1) What is the biggest challenge for companies when looking at their healthcare and health insurance plans?
Understanding the REAL contributor to the problem. The primary driver of healthcare costs for ANY employer is CLAIMS. If an employer can control claims, they can control costs. And where do claims come from? Employees going to the doctor.
This is the key. Now, how do you control this? There are three fundamental principles that can help an employer get to the point very quickly:
a. Healthy employees don’t get sick, and they don’t go to the doctors. We want them to go to the doctor for preventative care, but that is not what drives up the real healthcare costs. When employees are healthy, they are also happy and that drives of productivity, increases profitability, decreases absenteeism, and reduces turnover. Employee wellness is not just a good thing to do for healthcare – it MUST be a strategic initiative for the business.
b. Employees need to understand that health insurance works the same way as car insurance. (Most employees don’t understand this.) There is a reason why we don’t speed and we don’t wreck our car. When we speed and we get a ticket, our car insurance rates go up. When we wreck our car, our health insurance rates go up. Well, when we wreck our bodies, and we go to the hospital for expensive procedures to fix them, the claims are paid, and those affect the rates which go up for the following year. If we don’t go to the hospital, because we are healthy, we don’t incur claims… And when we don’t incur claims, not only do we save that money, but our rates are not impacted for the following year. Interesting.
c. When employees are treated like partners, they start to act like partners and they start working for us. Businesses don’t have a problem sharing the risk when times are bad. We pass along costs to employees when the rates go up. But are we willing to pass along the rewards when the rates go down? Are we willing to share in the profits when they help us contribute to the solution? Are we willing to disproportionately reward those who are part of the solution over those who are part of the problem? When employees can see that their efforts can result in a reduction of cost, and that reduction of cost puts more money in their pockets, they get excited very quickly. When more money gets into their pockets, they become stingy with that money and they start becoming better consumers of healthcare – including taking better care of themselves so they don’t have to spend that money on healthcare.
If your broker shows up only once a year at renewal time, it’s time to fire your broker.
Q2) HR is often woefully uninformed when it comes to benefits plans. They often rely on their broker as the expert. Do you feel that this is effective? If not, what can HR do to help drive strategic healthcare decisions for their company?
I agree. HR needs to become informed and educated itself, but it also needs to form a dream team of expert consultants. Having the right consultants and brokers is essential. Let’s talk about who needs to be on this team to make it work and their roles and responsibilities.
HR expertise: If HR is not conferencing, and this means specifically to healthcare conferences or national conferences that are specific to healthcare related topics, they’re never going to get it. Look – healthcare is the second most expensive line item on the books. It is typically worth millions of dollars a year to manage. If the only time we manage this is during open enrollment, then we are acting like fiduciary imbeciles. We need to take care of this multimillion dollar account year-round. This also means that we need to become instructed on best practices and ways to manage the solution. SHRM National Conference has great solutions, as do several of the regional and local events around the country. HR MUST remain current in their education. This requires them to go to these conferences and seminars regularly – not just once year.
Brokers: If your broker shows up only once a year at renewal time, it’s time to fire your broker. That goes without question. A broker needs to be a trusted partner that works for you year-round. They are not going to do that on their own. As HR professionals, we need to push them and drive them to create solutions for us. We need to ask them questions and make them do their homework. Personally, I use Mercer because of the strategy that I get from them. However, I also use a second broker – YES, I have two brokers. Mercer is my go to, and the second broker offers some services that are “out there” that are not very conservative but offer me some different solutions that I can’t get through Mercer because they are cutting edge and too new. This creates something of a tension much like Yin and Yang. It’s fantastic. While there is a little bit of competition between the two, it also keeps everybody on their toes. This way I have both of them working for me year-round.
Vendors: If the only time I hear from vendors is around open enrollment to pitch me new products, they don’t help me very much and I am not interested in their services. I have things going year-round with my employees. I need partners, not just a one-time solution. Part of my going to conferences is the trade floor. No, I don’t fill my swag bag full of crap. Sure, I’ll grab a pen or two but not stuff my bag full of useless stuffed animals and squishy things. I hit the trade floor to see what is out there. I look to see what services are available, what is new and thriving, and look for new solutions that can help me streamline benefits management and offer new options that can drive performance of my plan.
Q3) Companies often only review their health plans once each year - maybe 2-3 months prior to their plan renewal. When is the best time for HR to start thinking about, and considering changes to, their healthcare plans?
The best time for HR to start thinking about changes to their health plan is the day after the last open enrollment. As soon as you’re done with starting the year off, it’s time to start thinking about the next year. In fact, as we build one year, we are often thinking ahead of what we are going to do the next year. We think in terms of multiyear strategies. There are some things that we want to do, but in order to manage the change process, we may have to implement it over the course of two years.
Remember – as soon as the renewals calm, it is too late to change anything from the past. I cannot magically change my claims from the previous year. When I open the envelope, it is all about mitigation and negotiation. If I am fully funded [fully insured], I’m at the mercy of the health insurance company to negotiate my rate down. If I am self-funded, it is all about assessing risk and setting price points that demonstrate fiduciary responsibility.
Looking ahead, I CAN influence behavior changes among my employees. I can help them stand how to make better choices as consumers of healthcare, I can help them recognize opportunities to go somewhere other than the ER for primary care, I can offer substantial incentives for them to remain healthy, I can offer alternative solutions such as incentives for medical tourism and pharma tourism, etc. I can’t change the past – that I can change the future, and that future changes as quick as I do. I don’t have to wait for years to make change happen.
Q4) Often, companies feel that the only way to make "healthcare" affordable is by increasing deductibles and out of pocket maximums. Why do you think this is this problematic?
This limiting thought process is what got us into the trouble that we are in. At least, it is partially why we are in the trouble that we are in. Because of this mindset, many employers have passed along premium increases, gutted the coverage that our health insurance will actually cover, increased deductibles, and increased out-of-pocket maximums. The result? Employees are paying astronomical prices out of each paycheck for health insurance that doesn’t cover much, requires an annual deductible that you will never reach unless something catastrophic happens to you, includes an out-of-pocket maximum that is almost the same size as your deductible, and does not allow the employee to get the healthcare that he/she or the family needs or can afford.
Why is this a problem?
Let’s say an employee has an HSA (Health Savings Account) plan with a $6,500 deductible, times two deductibles for the family deductible on the plan. That means that before the employee can actually use the insurance coverage for which he is paying $500 per month, he will need to pay a total of $6,000 in premiums per year ($500/mo x 12 months) + $13,000 in deductibles ($6,500 x 2) for a total of $19,000 before he rolls into any kind of benefits “coverage”. If the employee is a typical employee with an occasional medication and doctors visit, it’s likely that he will never benefit from his benefits. In fact, because of first dollar costs while trying to meet the deductible, there is a really good chance that the employee will just not go to the doctor when he should and may stay home instead. So despite having insurance, the employee won’t use it, will get sick and stay sick for longer, will miss work, and will likely come to work being sick and spread it to others in the workplace.
Q5) What do you mean when you use the term "sick care"? How does this perspective impact a company's employees?
“Sick care” is all about mitigation. We are simply talking about reactive medicine – how to “fix” what ails us after the fact. It doesn’t talk about preventive medicine or the wellness component of preventing bad things from happening in the first place.
Sick care talks about mitigating the cost of the $55,000 that it will take to fully replace a knee through the local hospital system (all costs taken into account including the hospital, the orthopedic surgeon, the anesthesiologist, etc.). Sick care strategies are all about managing costs – and there is some of that that is important, such as bringing in medical tourism where I can send somebody across the border for the same surgery to replace the knee for $20,000 all costs in. But what if I could avoid replacing the knee altogether by helping the employee to lose 100 pounds? What if the reason that the knee needed replaced is because the employee is over 300 pounds? What if I could help them lose the weight in their 40s through our wellness program for a few hundred dollars which then prevents us from having to replace the knee later on? Or the back surgery? Or the cancer that will come as a result of poor health and eating habits?
By taking a holistic approach to healthcare, we take both mitigation (cost control) and prevention into account to attack the costs from multiple angles.
Q6) How can a company address healthcare costs, focus on preventive healthcare (rather than sick care), without busting an already tight budget?
It’s about priorities.
Do they want to spend next year’s money on healthcare increases? That money can go to Blue Cross or you can spend it today on preventive efforts including building a gym, wellness incentives, lunch and learn programming, incentive platforms, materials that you create yourself and distribute, videos that you develop yourself, etc.
We have a fully engaged group that does this as a part of the rest of their job as well. We only have a staff of three in HR. The key is to identify, recruit and engage your wellness committee from throughout the organization. As they become ambassadors of wellness, and they help promote the activities, they will take on leadership roles and begin to run the functions. You don’t have to do it all. In fact, if HR is running the whole thing themselves, this will fail. The more you engage in, the more you can get people excited to participate, the easier this will be to work. Engagement and participation across the board is essential. This CANNOT be an HR event. It MUST be an employee program that engages from the ground up.
Q7) What is the #1 thing you hope the attendees of your session will take back to their workplace?
At least one useful strategy to embrace, take back, and try to do one or more of the following:
I am so giddy about this session, I can hardly contain myself!! This topic should be one of the top priorities for companies. There is so much money to be saved in your benefits plans if you take the time to educate yourself, and then engage the right partners.
Thank you, Dr. Larson, for this incredible information. I am beyond thrilled to share this and truly hope that your session is standing room only.
Please join Dr. Wade Larson for this session, Strategic and Nontraditional Steps to Bend Your Company's Health Care Curve, on Wednesday, 6/26/2019 from 10am-11am in LVCC N201-204.
Please also connect with Dr. Larson on LinkedIN and Twitter.
Years ago, my husband and I found ourselves in a place where we felt completely disconnected. We longed for meaningful relationships with the people around us. For all of our efforts reaching out and doing everything we could to engage our community, they just weren’t reciprocated. We started to wonder if it was us, or them, or something else altogether. I wrote several blog posts on this topic (which ironically, caused further separation). Making a long story short, we ended up moving to another state. And almost instantly, we found our community. In fact, such deep community and connectedness that we have become hyper-sensitive to those around us who are experiencing loneliness.
The reality is that loneliness doesn’t end at work. It doesn’t necessarily begin there either. But because most of us (at least those of us working 40+ hours per week) spend the majority of our waking hours at work and with our coworkers, that loneliness tags along with us, and can have a profound impact on how we engage and perform.
Thus, I find the SHRM19 session Workplace Loneliness Is Killing Us, presented by Stuart Chittenden, founder of Squishtalks, to be of great interest. What does it mean to be lonely, how is loneliness manifested at work, and what does that mean for the workplace?
A couple of weeks ago, I had the pleasure of connecting with Stuart:
Thank you for speaking with me today! It’s truly a pleasure to meet you and get to know more about you and, specifically, this session. First, how did your business get the name “Squishtalks?”
About 9 years ago, my wife and I started hosting conversation salons in our home. We wanted to have a structure for conversation at a meaningful and deep level, but also one that was allowed to go wherever it wanted to go. We structured it so that we could fit 13 people around our kitchen table at a “squish.” The name just kinda stuck. About three years ago, I exited the partnership I was in, which was a branding and marketing consultancy. I felt the need to respond to this calling to see if this conversation thing could be a consultancy that could pay the bills. So I set up this business, and I kept the name Squishtalks. The camp is divided. Is it absurd, and ridiculous, and undercuts the seriousness of why people pay me? Or does it excite so much curiosity that it is appealing? Thus far, the jury is still out.
That is fantastic! What was the catalyst for making that move from branding to more of the leadership and conversation style salons you would have?
It was a combination of outrage, midlife crisis, and responding to some calling in my life beyond myself. Just turn the news on. Robert Putnam, Political Scientist, talks about our communities being characterized by a shriveled sense of “we.” Just look outside your door. Our social fabric is fraying. I was hitting middle age and I thought, “Is this all there is? And what am I doing to support this?” At that point, I thought the strength I have is using conversation as a way for humans to connect with each other. And I figured if I was going to respond to this calling and indulge the midlife crisis in a positive way, this is what I need to do.
I’m not a researcher in loneliness. And there is no training vocation school where you go to get a qualification as a conversation expert. It’s a subject that I think is relevant. It’s funny to think about HR professionals turning to me and asking “how do I do this?” In many ways, I kinda want to say, “I don’t know. It’s kinda like just being a human… Do the human thing…”
What were the factors that led you to speak on the topic of workplace loneliness?
A cliché, perhaps, but modern society and contemporary workplaces are beset by forces hindering our ability to connect meaningfully at a human level. Maybe I am a little too romantic, yet I am hoping to contribute to the building of stronger, healthier relationships and organizational communities.
How would you define workplace loneliness?
Loneliness may be defined as the subjective feeling that you lack meaningful relationships or a solid support system. It can be distinguished from being alone, which isn’t necessarily unwelcome for us, depending upon the context. Also, loneliness is not necessarily caused by isolation or exclusion. However, while precise, in some ways these definitions and distinctions don’t aid the general practitioner or layperson seeking to address loneliness. In that sense, I find it helpful to consider that loneliness is an emotional state of feeling apart from others.
Do you think that workplace loneliness is a relatively new phenomenon, or is it something that we're just now talking about?
As long as humans have formed communities and societies, we have also been subject to the experience of loneliness. It has been talked about in other eras, although the language and cultural context may not align with what we encounter today. Prof. Amelia S. Worsley at Amherst has written about this and suggests that in the 16th and 17th Centuries loneliness related more to spatial concepts, being away from other people and civilization and instead in the wilderness. Worsley arrestingly observes that modern loneliness has moved inwards and that “the wilderness is now inside of us.” Modernity, however, has a different kind of spatial concept wrought through technology. We struggle with this at a human level. How we connect as people and cohere as societies has not kept pace with the facilities afforded by technology.
I don’t know why loneliness is being discussed more now, but will offer my opinion for discussion. I’ve mentioned technology, which has fulfilled its promise to enable connectivity, but has not delivered on its promise to amplify connection at a meaningfully human level. There are the pressures to be authentic and empowered, yet most of us are unable to cope with the demands that such perfection requires, all the while trying to give the appearance of perfection. Then there are the modern forces – politics, media, socio-economic inequality, racism, bias, and so on – that are widening rifts between communities. More positively, we are de-stigmatizing issues relating to our mental health and wellbeing, which is a welcome shift in our cultural discourse.
What are some of the ways that HR can identify workplace loneliness in their companies?
On a practical level, I am not aware of any specific assessment tool that HR practitioners can discern a benchmark of loneliness. Engagement assessments with some customized questions may offer a viable alternative in the short term and are already visible and credible in the field.
Beyond that, while it may sound cynical, HR should consider starting with senior leaders because, first, that is typically where there are more resources, and, secondly, where HR can get organizational buy-in.
It’s really about organic connection. We come hardwired with this ability to connect with other humans. The truth is there is no simple “one, two, three” that works. What I would suggest is there are principles of conversation that can be brought into the culture. And the way you do that first is by modeling it, and to provide skill building around it. Embed it into training and development programs. Teaching people what some of the principles of conversation are: Curiosity, empathy, listening and courage.
One of the questions that is asked on Gallup's Employee Engagement Survey is "Do you have a best friend at work?" Why do you think this question is so important, and what do the responses reveal to the company in relation to workplace loneliness?
I’ll let Gallup respond to why that is such an important question. This article of theirs is especially relevant, it seems, and includes a statement by a Gallup researcher that you are lonely if the score to this question is low. It also includes this assertion: “'I have a best friend at work’ proved to be the wording best able to discriminate between groups in which friendships are sufficiently supportive and those that have only surface relationships that are unable to withstand adversity.”
What is one of the ways that HR can have the biggest impact on addressing workplace loneliness?
The answer is not mandated “fun” nor forced socialization. What I am suggesting as one way, and not exclusively, is authentic conversation. It is an art that we all have the capacity for and which enables us to encounter others and to be encountered.
What would you say to the business owner and/or leaders who say that it isn't our place to concern ourselves with this topic?
“Are you a human?” Although that is obviously too flippant. I am willing to bet, though, that a business owner or leader who is unconcerned about this issue likely has a workplace characterized by loneliness. If they have dysfunctional teams, siloed thinking, low engagement, little creativity, or high turnover, they might wish to reconsider. If they expect their people talent to fully show up in all their potential then this is an important issue.
For the HR professional, we have to ask, are we there to serve the people? Or are we there to serve the hand that feeds us? That’s where the discomfort comes from.
What is the #1 thing you hope attendees of your session will take back to their workplace?
That a culture of connection achieved through authentic conversation will not only alleviate loneliness and its ill effects, but will amplify wellbeing and performance.
I want to thank Stuart for the wonderful conversation! I hope this information sparks your interest in learning more about workplace loneliness, and some ways you can begin to build meaningful connections through conversation. Join Stuart at his session Workplace Loneliness Is Killing Us on Monday, June 24, 2019 from 1:30 PM - 02:30 PM. To learn more, click here: https://annual.shrm.org/sessionplanner/session/25148/workplace-loneliness-killing-us
To learn more about Stuart Chittenden and Squishtalks, visit his website at: https://squishtalks.com/.