Healthcare Benefits are Broken. Fixing Them Requires Redefining the Industry.
Much attention has been paid to fixing our country’s broken healthcare system. But what often gets missed are the problems with employer-sponsored health benefits and the role they play within the broader healthcare crisis. Employers in North America alone are spending hundreds of billions of dollars to provide healthcare benefits to their teams. In fact, the current cost is estimated to be $15,000 per employee, with 49% of the U.S. population relying on employer-provided health benefits.
The current problems with healthcare benefits were exemplified in a recent Harvard Business Review Analytic Services report for League. The report surveyed 238 executives about employee health benefits. The findings illustrate how companies and employees alike have fallen into a lose-lose cycle where healthcare costs keep rising while the experience — and even the benefits themselves — get worse. Employees are often left unsure and overwhelmed about what benefits they have, how to properly use them and which healthcare decisions to make. A dizzying number of benefits vendors and digital platforms make this more confusing than ever. Meanwhile, HR teams are spread thin trying to answer questions and guide employees.
So what’s the solution? One thing is for sure: it won’t be found in the status quo. For companies to reduce healthcare costs while also engaging employees, the entire ecosystem needs to fundamentally rethink the health benefits system. What’s needed is an entirely new category focused on an employee-centered health benefits experience.
When Lack of Awareness Leads to Lack of Engagement
The Harvard Business Review responses showed a stark lack of awareness among employees, which has larger implications for their long-term health. Sixty-three percent of respondents said employees don’t know enough about how to leverage their company-provided health benefits. Meanwhile, more than half (58%) of organizations reported that employees are unaware of the health benefits they are entitled to. This lack of awareness extends to the quality and cost of healthcare, as well as which plan is right for them.
The consequence of this lack of understanding shouldn’t be surprising: employees can’t use something if they’re unsure of its existence or don’t know how to. Just 28% of respondents said that employees actively engage with all of the health benefit programs they are offered. In fact, employees reportedly use the full range of health benefits at only a little over one-quarter (27%) of organizations.
These statistics become alarming when you consider that a large number of chronic illnesses are preventable. The World Health Organization estimates that 80% of heart disease and stroke, 80% of type 2 diabetes and 40% of cancer could be prevented with simple lifestyle changes like healthier eating and moderate exercise. An employee-centered benefits platform, with personalized health profiles and journeys, could empower people to better manage their health, with dramatic potential to improve outcomes.
Burnout on Both Sides
There’s a more far-reaching impact of this lack of awareness and engagement: both employees and HR teams are overwhelmed and fatigued. Employees are often required to access multiple disparate systems in order to learn about and access their full range of health benefits. Only 10% of organizations reported that employees can use only one system to do this. At many organizations, employees need to use three, five or even more systems.
Employee confusion and frustration are being passed on to HR teams, whose time is being taken up answering routine questions from employees about coverage, out-of-pocket maximums and co-pays. In consequence, 41% of organizations report that HR doesn’t have the time or resources to perform more strategic activities, like benefits planning.
Rethinking the Benefits Experience
This holistic problem can only be solved by a solution that helps both employees and employers. It’s time to rethink the system in its entirety to focus on the overarching health benefits experience —not tools, or platforms, that cater to only parts of the ecosystem, but a centralized platform that can help you, no matter who you are or what you need, get the help and support you need from a benefits perspective. Companies from entertainment to retail have disrupted industries by focusing on personalized platforms that cater to a user’s unique needs for a better experience. Imagine the potential of recreating this model not to stream movies or order groceries, but to help people live healthier lives.
What employees need is a “front door” to their benefits. Instead of multiple accounts and platforms, employees should be able to access and learn about all of their benefits from a single source. Simplifying the source of information and engagement will help employees understand and use their benefits.
The benefits experience should also be completely separate from both the employer and the insurance company. Employees deserve a trusted, neutral place where they can get health advice and support. This environment will empower people to proactively manage their health and utilize their full range of benefits.
The good news is, there’s reason to be optimistic that companies are ready to demand a better experience for their employees. Our report found that the majority (68%) of organizations are open to changing their employee health care experience.
A better benefits platform is one that prioritizes engagement and supports employees in being better healthcare consumers. It’s one that ultimately helps employers break the higher cost/ worse experience cycle by driving benefit utilization and reducing costs. These changes are necessary to creating a health benefits system that works for everyone. For further insight into these findings, download “The Key to Better Health.”
This post is sponsored by League.