Self-Insured Employers and Medical Ethics

This is the annual open enrollment time at many employers. (I have to make my own insurance choices for next year by Friday.)

In the past, employers - especially large ones - have offered a wide array of health insurance choices.

That's changing fast. Many companies, including large ones like Nissan and Delta Airlines, are offering only high-deductible plans to their employees.

According to the benefits director at Nissan the high-deductible plans are “aimed at getting people to focus on their health...when you are spending your own money...you are more careful in the way you spend it.” Common sense economics suggests this is true. Notice that no reference is made to how the careful spending will be conducted and what the potential clinical impacts might be.

The Delta spokesperson dips into wishful thinking: “We felt it was important to offer a plan that encourages participants to manage their health care and maintain their health and enables them to get the most out of their health care dollar. We find that when people get engaged in their health care they generally get healthier.”

Insofar as companies assume that financial risk alone will transform employees into discerning "consumers" of health care I believe they are living in la-la land. For urgent treatment, like hospital care or cancer chemotherapy, "patients" will not morph into "consumers" and shop around. And for the entirely valid domain of optional choices - whether to do a non-emergency MRI, or whether to choose a branded drug rather than a generic - good information on cost and quality is all too often lacking.

But as I've been thinking (and writing) recently, self-insured employers can make a significant contribution to public understanding about health care dynamics if they capitalize on the degree to which employees and management have a shared interest in getting a grip on costs.

If I ran a small self-insured business or was benefits director at a large one I'd meet with employees (in person or electronically, depending on logistics) way before the open enrollment period and put out all the facts I had about insurance costs and their impact on wages. I'd bring in someone who could facilitate deliberation about alternative strategies for bending the cost trend. And, if possible, I'd bring in a wise and respected local physician to educate the group about the areas of medicine that would benefit from discerning consumerism on the part of patients. My ultimate aim would be to engage employees and management in thinking about the trade offs cost containment requires.

My guess is that a robust workplace process would produce creative new ideas about health insurance processes, the same way quality circles, which started in Japan almost 50 years ago, have produced creative new ideas about manufacturing processes.

It's only a matter of time before multispecialty medical groups go to self-insured companies to propose "deals" akin to the original HMO concept, in which a medical group takes resonsibility for care of a population at a guaranteed price. If the employees looked over the proposal, considered the benefits (presumably good care at a better price) and trade-offs (use of a limited network) this idea, and others that are just being thought of, like choosing to build medical tourism into the plan, will come to the fore.

This kind of front line activity will not transform the broken U.S. health "system." But efforts at large scale transformation have a habit of crashing and burning. And even if the time becomes propitious for system-wide change, the more we as a population have deliberated about health care choices the way I envision happening in self-insured employers, the more able we'll be at handling systemic change.

(For additional information, see this excellent New York Times article - "Employers Offer Workers Fewer Health Care Plans.")