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A New Employer Mindset Needed
Avoid Repeating Healthcare ‘Time Loop’

Time LoopIn the 1993 movie, “Groundhog Day,” actor Bill Murray plays a Pittsburgh TV weatherman who finds himself in a comical time loop while covering the annual Groundhog Day event in Punxsutawney, PA. Murray’s character wakes up each day to relive February 2 and eventually learns how to use his prior-day experiences to make a difference within Punxsutawney. But it takes him many, many attempts and frustrations before he realizes he must re-examine his life and priorities before he can make desired progress.

I was recently approached by a very large Iowa organization interested to know my ‘take’ on the next phase of employer-based health coverage. Specifically, I was asked how to break the endless cycle of doing the same things over and over again to control health costs – as current attempts seemingly do not move the cost needle.

This particular organization assuredly represents most employers when it comes to the frustration of offering health coverage to their workforce. Much like the Murray character, employers continue to relive their renewals, year-after-year, only to repeat past practices that invariably result in a similar and familiar fate. A handful of these annual activities typically include the following:

  • Changing insurance companies or third-party vendors, including pharmacy benefit managers, wellness vendors, insurance brokers, etc.
  • Increasing employee cost-sharing components, such as deductibles, co-payments and out-of-pocket maximums
  • Limiting (or expanding) provider networks
  • Embracing consumer-driven health plans
  • Converting to a new financial mechanism to pay for coverage, such as self-funding, partial self-funding and a host of other hybrid funding arrangements

To avoid repeating similar (and predictable) results from these practices, employers should take a page from Murray and re-examine their priorities. Here are three ‘takes’ that I shared with this particular organization:

  1. Employers Must Recognize and Accept that Preventable Medical Mistakes is a HUGE Problem

    Employers should not assume employees and their family members will consistently receive safe and appropriate care from the local provider community. Even the best and most prestigious hospitals are not immune from committing these errors. Preventable mistakes are VERY costly, both in lives and in money. According to the Robert Wood Johnson Foundation, poor quality-of-care costs employers at least a third of the single-health premium. In Iowa, this would conservatively amount to $1,850 per employee each year. The social costs due to preventable medical errors dwarf this amount.* Just as importantly, eliminating preventable mistakes will also result in employees and family members living healthier and more productive lives.

  2. Insist that Patient Safety becomes a PRIORITY

    In the past, employers have relied on healthcare providers and insurance companies to control costs and quality, assuming that patient safety was naturally baked into the services we purchase. Yet, employers unknowingly pay for medical errors – albeit at the lower-negotiated fee available through insurers – but such discounted ‘savings’ are eventually negated due to paying for undocumented preventable mistakes. Employers and employees (not insurers) are the ultimate payers for this wasteful and unnecessary cost through higher insurance premiums. And, because of this, they must insist that new health plans deny payment for preventable medical errors. At the very least, this should be a minimum requirement. Few private plans attempt to do this, primarily because they have scant metrics to detect these errors. How would they know?

  3. Require public TRANSPARENCY from local providers

    The word ‘transparency’ has become an overused word – especially within healthcare. But for the ultimate payers of healthcare (employers and employees) to determine the value they receive from the ‘investment’ they make, the provider community must enter the 21st Century and demonstrate their value by publicly reporting comparable and usable safety information. This should also be a minimum requirement.

Offering and paying for expensive health insurance coverage year-after-year is the ‘Groundhog Day’ confronting frustrated employers. Unless a new mindset takes hold in the employer community that can forever alter our perpetual ‘Groundhog Day,’ very little will change in our ‘town’ of Punxsutawney.

*Additional details to follow over the next month.

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Comments

  1. Thank you for this exceptional statement. Too often, patient safety is ignored when purchasers or payers strategize around healthcare value. As you point out, that can be foolish. Errors, accidents, and mistakes can harm or kill patients, and all the costs are passed on to the payer. It will erode or destroy any gains employers think they are getting. It’s usually not apparent in the claims, so purchasers must push to get the information and act on it. One place to look is my nonprofit, the Leapfrog Group, which reports on the safety and quality of care in hospitals. We have record participation nationally, but in Iowa most hospitals decided to decline the request of Iowa employers that they report.

    • David Lind says

      So good to hear from you, Leah! I am very well aware of the great things that your organization is doing to keep this subject front and center with the purchasers – and the general public! Keep up the great work!

  2. Janis Van Ahn says

    David, I agree with #3 but it seems difficult without #3 to have any ability to ‘know’ about the preventable errors or to be able to ‘manage’ them. You talk about preventable errors quite often, is it really THAT prevalent? If so, it makes me fearful to even think about going to a facility or hospital.

    • David Lind says

      Thank you for your comment, Janis. The short answer to your question about the prevalency of preventable medical errors is “Yes”! I write about this subject matter quite frequently because this problem is of epidemic proportions that requires a great deal of action from our healthcare provider communities, employers, state and federal agencies and the general public. We assume that efforts are being made to help combat medical errors, and they are. But unfortunately, progress is anemic. The associated costs of preventable errors are massive, both in the medical costs we pay through our premiums and in societal costs due to loss of income, productivity, and many other factors that result from medical harm.

  3. Anne Kinzel says

    David:

    Interesting remarks as always. How are you defining “safe and appropriate care”? Is it the same definition as a “medical error”? If the care does not cause harm is it “safe and appropriate”? What standard are you expecting the provider community to provide? Where does the standard come from? In other words, who defines this enormous number of potential standards across practices and patients?

    • David Lind says

      Anne, you bring up great questions. The short answer is that “safe and appropriate care” within my blog represents care that we can all reasonably expect to receive from providers – based on their education, training and experience within their given professional line of work. This care, however, is delivered without preventable, serious, and unambiguous adverse events that should never occur. The “standard of care” meaning and interpretation can be debated and articulated by providers, payers, ethicists, patient advocates, lawyers, etc.

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