“Exchange” Is Becoming A Dirty Word

Did someone just say the “E” word?

The world of insurance and employee benefits has changed immensely in the last few years.

After the passage of the Affordable Care Act, the word “exchange” was all the buzz.  To some extent, the concept of an exchange had existed for years, but the ACA brought it to the forefront of insurance and employee benefits.  “Obamacare” was being discussed and debated and each state was faced with the challenge (or opportunity – depending on how you looked at it) of establishing a state-based exchange or defaulting to a Federal model.

The public sector was not the only area seeing the emergence of the “e” word.  The private sector saw two main flavors of exchanges gain popularity – the first being large consulting house benefit exchanges and the latter being tech companies empowering small to mid-market brokerage firms as well as insurance carriers with technology designed to enable a better user experience when purchasing insurance.  This included decision support tools, cost calculators and other tools along with the employee’s choice of insurance plans.  Tech companies saw an opportunity to inject a much-needed dose of innovation (or at the very lease, 21st century technology) to a sleepy old process.

And the word “exchange” was being thrown around as much as Tom Brady throws a football in the 4th quarter of a game when the Patriots are trailing.

So here we are – 2017. What has changed?

Many federal and state exchanges saw a dip in enrollment.  [Note that some did see increases this past year]. Exchange-empowering tech companies are being bought and sold.  Both public and private exchanges aren’t seeing the types of enrollment originally predicted (though there is still time, I suppose). And saying the “E” word may get your mouth washed out with soap.

I have had conversations with executives at some of the national insurance carriers and each one is questioning the popularity of exchanges. Most are questioning their continued participation. Others are questioning if exchanges will even survive.

This shift can be attributed to low enrollment or the election of President Donald Trump and the Republicans now positioned to make good on their “repeal and replace” threat regarding the ACA.  Despite the vast differences between public and private exchanges, the ACA = exchanges and therefore the private exchanges are guilty by association.  These, in my opinion, are not a major reason for the souring of benefits consultants and HR workers to exchanges.

So what is it?

Let me back up a moment.  What, exactly, is an exchange?  Depending on who you ask, you’re likely to get multiple answers.  And rightfully so. There are a number of models out there.  I daresay that the most simplified definition is technology-enabled (or technology improved) employee benefits enrollment that often times comes with more employee selection than historically seen and – maybe – some components of employee engagement and cost savings that, arguable, are in their infancy. As a Senior Vice President of Sales at a Massachusetts health insurer recently reminded me, the move from defined benefit to defined contribution is also the staple of a private exchange.

Now we have more technology and more choices. But has it really changed anything? Are costs going down?  Is the health of an organization’s employees improving?  Or has the exchange technology, though improved, added costs without saving money?  Currently, I think we’re looking at increased cost without enough improvement. I would argue that the health insurers I’ve spoken with feel the same. Yes, many employees have bought down to high deductible health plans, but without the necessary tools to become stronger health care consumers, the impact on health status and cost is unlikely to be impacted.

With any new trend, it needs to deliver on its promises. And the promises were mixed, depending on which type of exchange you were talking to.  The initial models that were rolled out are being tweaked, improved, changed.  And though enrollment in private exchanges is not what was projected, they’re still very much alive. They’re not going anywhere.

My prediction – the models we see today will be improved.  There will be more consolidation.  The remaining dominant designs will need to move onto their next iteration. There is only so much that can be done around the “shopping experience” so the shift will be towards engagement – and rightfully so.  And with engagement will come the tools for members to become better consumers of health care. And that (hopefully) will lead to improved health and lower costs.

We may see the word “exchange” be retired or replaced by some other name, but the promise of exchanges will continue to evolve.



What Still Needs To Change

Regardless of the uncertainty regarding the Affordable Care Act and the Republican’s “repeal and replace” cry, there’s something that has been missing in health care.


I’ve written about this in the past and it continues to be an issue.

The ACA, passed with the support of the Democratic party, moved us down the path of universal coverage. Health and Human Services (HHS) stated in early 2016 that 20 million people now had coverage under the ACA. This doesn’t include the 2017 open enrollment numbers as we’re still in open enrollment. Having more people covered is a good thing.  Yes, there’s a question about adding people to a system that can’t control costs, but from a health standpoint, having insurance is arguably better than not having it (especially if you have a medical condition of some sort).

The Republican party has not yet agreed upon one approach, but they have options.  One item I’ve noticed is the push for transparency – the ability to know what you are paying for when you consume health care.  This is also an area that needs a kick in the pants.  It’s maddening to go to a health care provider and, while at the registration desk, agree to pay for any out-of-pocket expenses – WITHOUT KNOWING WHAT THEY WILL BE.

As maddening as this is, I still say that getting covered and having transparency doesn’t do anything without…say it with me…engagement.

I can have health insurance coverage. I  can have tools that let me see what things cost.  But if I don’t actively engage in my health – and I’m talking all facets of health – then problems remain.

So how would I define engagement?  I suppose there are many ways, but let me start with this:

Knowing how to choose the right health plan for you and your family, eating healthy, staying on a medication regimen when prescribed, questioning treatments prescribed by your doctor to prevent over-treatment, exercising, arming yourself with information before seeking care, utilizing all the great tools that employers offer to their employees to manage their health, understanding your chronic condition and actively managing it, knowing when to go to ER vs. urgent care vs. telemedicine visit, etc. etc. etc.

Yes, there’s a lot here.  But it’s our duty as consumers of health care to engage in our own health.  That’s not a small order, I know.  And sadly, a great deal of engagement is missing.

Understanding the Past, Building the Future: Health Care – from Xerox HR Insights Blog

I’m very excited to share a post from my employer related to the past and future of healthcare.

To celebrate our 100th anniversary, the consulting practice leaders from the UK, Canada, and the United States were asked the following three questions:

  • How have things changed in their fields in the past 100 years?
  • What are the biggest challenges they – and their clients – are about to face?
  • What’s the most exciting thing they speculate is coming along?

My friend and global health practice leader, Hope Manion, wrote a piece for this and she was kind enough to mention me.  She and I discussed some of these topics prior to her writing her piece – I’m pleased to have helped!

What’s Transparent Is This – Engagement Is Missing

Last week, The Journal of the American Medical Association (JAMA) released the results of a price and transparency study.

Though I do not have access to the full study, I read the brief excerpt including this:

Conclusions and Relevance:  Among employees at 2 large companies, offering a price transparency tool was not associated with lower health care spending. The tool was used by only a small percentage of eligible employees.

Anyone else have a “whoa” moment after reading this? (I’m guessing it will only be the health care geeks out there who have this moment.)

With the continued rise of high deductible plans and the push towards consumer directed health (where a member/patient takes a more active role in shopping for and consuming health care services), the need for a cost and transparency solution was a market need eventually met by a number of organizations.

Coupled with the exchange phenomenon – both private and public – and it appeared the market would be drawn to such tools in droves.  But as this study shows, people are not using the tools.

Should we be surprised at this conclusion? No, we shouldn’t.

We can push transparency and we can offer incentives. We can conduct payment reform and change how we pay for healthcare. We can insure the entire country and set up national work groups to look at quality, efficiency and costs. And perhaps tools and services will be brought to the market to help in these areas.

But if the patient doesn’t get engaged, then you may (still) see a consumer make a poor decision by not questioning a referral to a particular doctor or hospital. You may (still) see a patient select the lowest quality, highest cost hospital for a particular condition.

Engagement has been missing – and it appears it still is. Until we have an engaged health care consumer, price and transparency tools (along with anything else brought to market) will continue to see low utilization.

Health Care, Entrepreneurs, & Integration

For the better part of the last 20 years, I’ve worked in some area or another of the U.S. health care system – an industry in dire need of some changes.

I am regularly reminded of the challenges this country faces related to health care – high costs, coverage for the uninsured, reducing waste and fraud, transparency and quality – the list goes on and on.

Luckily, there are wonderful health care startups and entrepreneurs who are doing their best to find solutions, disrupt the system [insert your favorite buzz word here].  I’ve met more than a few of them and I’m regularly inspired and encouraged.

But then reality sets in and I ask the question that sometimes keeps me up at night…

How is it all integrated?

Without integration and coordination, its like we’re all trying to move a giant boulder…but we’re pushing from different sides and not accomplishing much.

I have attended “demo days” for Rock Health, Healthbox, and recently TiE ScaleUp – all in the Boston area.  The health care startups always have great concepts and ideas and some have since thrived.

But how much has the overall system been improved or impacted?

Some would argue that the silos in health care drive a lot of the challenges that exist in health care.  I tend to agree, but I’m not sure how much of it is attributed to the lack of integration. My sense is a lot of problems and challenges could be solved if the integration and coordination puzzle was solved.

Systems that are tied more closely together can better understand what each area is doing and, as a result, align business practices for the best possible outcome for the patient and/or member.

To revisit my previous example – push the boulder in the same spot in the same direction at the same time – create a system that truly works.

This poses a challenge to all the clever entrepreneurs and startupy folks out there – how to create a health care PLATFORM that allows integration across ALL aspects of the health care continuum – insurance, care delivery, electronic medical records, data integration, medication adherence, wellness and well-being, predictive analytics…the list goes on and on.

To the entrepreneurs out there who have a fire in their belly related to the health care space: the gauntlet has been thrown down. Let’s see whatcha got…

Public Exchanges, Private Exchanges – Friends? Enemies? Frenemies?

The growth of both public exchanges and private exchanges in the past few years has been quite remarkable.  For the sake of definitions, public exchanges include federal and state based exchanges established by the Affordable Care Act. Private exchanges, in this blog post, will be used to cover large, benefit consulting exchanges that serve the enterprise employer space (think 5000 employees and above).

While working at a state-based exchange, I recall attending an information session held by a large consultant private exchange organization.  The folks from the consulting firm seemed surprised by my attendance and asked why a fella from a public exchange was there.

Considering the fact that these public exchanges serve very large employers while public exchanges serve individuals and small businesses (currently defined as 50 Full Time Equivalents -FTEs- or less), I didn’t quite see why my attendance was being called into question. Can’t a health care geek get his geek on by attending an evening session to learn about private exchanges?

[The answer is yes, but you have to read to the bottom to find out why…]

Of course, that was more than a few years ago.  The landscape has changed. The view of both private and public exchanges has changed.  Private exchanges continue to grow leaps and bounds.  Public exchanges seem to be getting their legs under them after struggling mightily for a few years.  And you know what else has changed?  The ability for public and private partnerships to demonstrate that they can work.

Consider this – any benefits broker or consultant worth their salt knows that solutions for active, full time employees is good for their employer clients. But what about other employees like pre-65 retirees and part-time employees?  Hint: solutions that provide services for those “other” employees are ALSO good for employers.

It just so happens that private exchanges can fill a gap here.  Forward thinking folks identified this gap and have pursued collaboration and cooperation with both the federal public exchange and a number of state-based public exchanges. In fact, when I was working for a state-based exchange, I set up a collaboration with two of the large private exchanges that involved warm-transfers from their exchange to the state exchange to facilitate enrollment.

What does this mean?  For an employer with full time, part time, and pre-65 retirees, it means a one-stop shop for them.  These employers use the private exchange as a solution for all of their populations. Since the private exchange has a partnership – typically through a vendor partner – with the public exchange – voila.  One-stop shop.

Oh, and that private exchange story I shared above – the one that questioned my attendance because I was working for a public exchange?  I now work for them.