A perspective by Dr. Rajaie Batniji, MD, DPhil, Co-Founder and Chief Health Officer
Why do you need more data?
As Collective Health’s Chief Health Officer, I hear quite a few stories about companies that could have benefited from having the right kind of data on their population. For example, a few years ago at an un-named Silicon Valley tech company, all the employees were given free skateboards. At the end of the year, insights into their data much later showed them that the number of orthopedic injuries covered by the company’s health insurance had skyrocketed. The injuries were mostly broken wrists caused by—you guessed it—the free skateboards.
If that company had better, real-time access to their data, maybe they could have seen the correlation sooner, and saved on the costs of all those orthopedic injuries. This is just one small example to illustrate the need companies have, not just for big data, but for timely data that can lead to actionable insights. Comparative data, benchmark data and trend data are all great, but what is more important to have is real-time data about your population.
Harness the power of employer-sponsored healthcare
So, what can employers do to get this kind of data? You can demand it. You might be skeptical, but employers have the biggest impact on health insurance in the United States because of their massive purchasing power. In fact, employers purchase 93 percent of private health insurance in the United States, and more than 60 percent of that is self-insured (Kaiser Family Foundation). Employers have not yet used this market power to demand better access to data. Think about it this way—you aren’t just administering a plan, or implementing a benefit. If you, like many large employers, have self-insured plans, you are essentially running your own mini-insurance company. From this perspective, you can see how employers have the ability to shape healthcare in this country.
Benefits managers have the biggest influence on the health insurance options companies choose, so every time you make a purchase decision remember that you are the most powerful people in the US healthcare system. You can demand from your programs the toolkit you need to run your own mini-insurance company. This can include data on employee engagement and transparency into all of your costs.
Employers purchase 93% of private health insurance in the United States.
Data and benefits literacy
In addition to my work at Collective Health, I am also a physician who has seen the very real ways in which a lack of good information can impact a person’s life. A woman I treated for cancer for over a year, once confessed to me that her biggest fear and source of anxiety was not the cancer itself, but it was the uncertainty she had about the financial burden that she could be leaving to fall on her family. She had little ability to get the information she needed to know how much her care would cost and how much of it her insurance would cover.
A lack of benefits literacy remains a barrier to people understanding the basic components of their health plans and coverage. In a recent study, one in four adults in Texas reported they “lacked confidence in understanding” the most basic terms related to health costs such as “premium,” “deductible” and “copayment” (Rice University). Even more telling, we tend to overestimate our understanding. Another study showed that just 14 percent of Americans can correctly answer one basic question about a copay, deductible, coinsurance and out-of-pocket maximum. People are already confused by even these basic terms and they are even less equipped to handle the health insurance information they will be inundated with after a major medical expense.
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Finally, studies have also shown that people have a difficult time in choosing the right plan for themselves. They often choose a “financially dominated plan” (NBER) that—regardless of their healthcare utilization—would end up being worse for them financially than other plans offered. As a HR/benefits leader, once you are armed with the data you need, you have the opportunity to make data-driven decisions that can have a big effect on people’s lives. This can constitute a range of initiatives—from simplifying your health plans to putting together a benefits literacy program for your people.
You can make a difference
Benefits teams are well positioned to simplify the plans being offered, and to act on the data they have about their populations. Managing benefits is important, and taking action to improve the health, happiness and productivity of your people is within reach.