Fourth in a series
Conversations about the Consolidated Appropriations Act of 2021 have been ubiquitous in our industry for nearly two years, spotlighting a dire need to step up stewardship of
As part of the CAA, every employer must now attest to the federal government that they have removed gag clauses, a contractual provision that blocks employer fiduciary access to the data pertaining to the health plan they manage. This language codifies for health plans unrestricted access to their claims data from insurance companies, third-party administrators or other partners, serving as a reminder that employers must act upon their
Many employers didn't have a clue about what was in the
There is a huge movement now on the supply side of healthcare — including with provider groups, accountable care organizations, health systems and others — that want to help employers remove risk and to follow optimized standards of care resulting in predictable outcomes. Many health systems in California, Washington and elsewhere are using population health strategies to intake employer data and suggest where money is being wasted, how sites of care can be optimized and even to recapture expenditures to be used more strategically for plan members.
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The right incentives
In trying to fulfill their fiduciary duties under the CAA, employers need to determine if their members should follow standard of care for the most expensive and catastrophic claims, which often involve oncology and orphan diseases, or a host of other hard to treat diseases. The unfortunate part is that plan designs haven't incentivized getting patients to
Self-insured employers don't want to breach their stop loss with catastrophic claims, which represent the largest fixed cost in their health plans. A double digit increase in those costs will affect all covered lives. Employers that create plan design incentives to use precision medicine for complex diseases, or even for diseases where the standard of care has failed, create a tremendous opportunity for members suffering from these diseases.
Precision medicine services solutions use technology to manage expensive and complex medical diseases in a precise way bringing personalization and accountability to care delivery. Employer fiduciaries must be able to prove that due diligence was done to bring on the appropriate vendors and create contractual terms that are relevant to their population — that these solutions were actually implemented to benefit all plan members.
As such, creating personalized data-driven care paths for some of the most complex and rare diseases affecting employer populations — and thereby producing predictable cost or quality outcomes — certainly seems to be a tactic in the interests of plan members.
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Transparent compensation
As many of you already know, another critical aspect of fiduciary duty under the CAA is disclosure of broker compensation. Producers who resist this process, of course, run the risk of losing clients. We can't help but recall a recent case involving a jumbo employer where the fiduciary, after having completed compensation disclosure, learned that the broker was earning four times what they thought they were paying.
Our advice to brokers is to be careful about retaining (or regaining) trust by aligning themselves with the interests of health plan sponsors and members. Responsible brokers typically will produce a listing of the things they do on behalf of the employer to help them exercise their duties, as well as get the procurement process and accountability piece up to speed. Brokers must demonstrate that their personal interests aren't in conflict with those of the plan fiduciary.
Viewing what has happened on the retirement and financial side of our industry over the past few decades serves as a cautionary tale for sponsors of health and welfare benefits. Remember that John Bogle of Vanguard basically made the stock broker an endangered species on retirement plans. So unless and until health plan brokers are able to show their relevance to fiduciaries with regard to bringing tactical measures to analytics, procurement and plan design, especially for catastrophic risk, they will become part of the "Bogleization" of healthcare. Precision medicine solutions represent tactical measures for savvy fiduciaries.
Since 6% to 10% of the population suffers from complex cancers and rare diseases, finding effective solutions for these costly conditions is a critical responsibility on the part of group health plan sponsors. The critical variable to remember is that this actually accounts for one-third of the overall healthcare spend, more than half of the high-cost spend and likely a much higher percentage of their catastrophic stop-loss claims based on data analytics involving nearly two million patients. Catastrophic claims create outsized cost for plans.
Health plan members who are diagnosed with a complex, catastrophic or orphan disease lack the expertise to manage their care, but a properly designed plan with the right incentives will allow them to receive precise and immediate access to the right care at the right time in the right place, which increases their likelihood of a successful outcome.
This requires a precision medicine approach, knowing the right tests and treatments that are both available today commercially, as well as those that are in development. For these members, a one-size-fits-all strategy is not effective at addressing the complex diagnostic and treatment needs of the members. A more precise approach is not only in the interest of the members, but is smart business as it saves significant amounts of money. What could possibly be more in the best interest of plan members under the CAA than to adopt data driven precision solutions as a tactical measure for members suffering from complex diseases?
Over the past 30 years, most employers have used no open-access networks with deductibles, co-pays or coinsurance with no steerage or incentives to speak of to optimize costs. But now under the CAA, part of that fiduciary duty is creating the infrastructure mapping and steerage to assure patients with the most complex and expensive diseases are getting optimized treatment and outcomes.
Employers need to focus on the application of precision medicine to identify, based on health plan data, the right patients for consideration and provide them access to the right testing, treatment and therapies that are commercially available, as well as those that are in clinical trials. This approach will not only create better quality and outcomes but ultimately shift the cost of these patients significantly such that there is a tremendous amount of value creation from a quality, outcomes and cost perspective. This is good news for the fiduciaries.
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Leveling the playing field
Doing so also will create health equity, helping level the playing field for underserved or marginalized populations whose care has been compromised by many social and infrastructure barriers. The beauty of this arrangement is that it optimizes access to the most definitive care, regardless of where patients live or whether there are doctor shortages. Plus, patients can get mapped into the appropriate clinical trials, which unfortunately have been highly balkanized or proprietary, depending upon the academic institutions to which they're affiliated.
One of the real challenges behind implementing these strategies, which are so valuable for patients, is that most of the time it's only been for people who can get to a center of excellence, which is just 15% of the population. Even in lung cancer through which these types of opportunities are so ingrained in the guidelines, only fewer than 60% of patients are getting access to the right testing and treatments. This has a lot to do with the way we distribute care in the U.S. and globally.
Expanding access to precision medicine across the socioeconomic and geographic continuum allows employers to reach a much broader population set and distribute these types of opportunities in a more equitable way and far more cost effective way. Using this approach to fulfill a health plan sponsor's fiduciary responsibility under the CAA is good for patients, the community at large and the reputation of the company as a caring employer of choice.
