Related articles by Zemanta

• Should Medicaid Pay More for Primary Care? (blogs.wsj.com)
• Mayo Clinic primary care clinic in Arizona to drop Medicare (medicineandtechnology.com)
• Expect higher health care costs in 2010 (money.cnn.com)
• Build it – they will come – and spend money (medrants.com)

Was struck today that I have heard very little about the role of Medigap in the current health insurance debate…despite massive discussion of Medicare, Medicare Advantage, payment reform…etc.  In addition, it highlights how difficult it is to sort through the tangled web of money and influence…not sure how much I believe it, but its certainly food for thought.

This thought was triggered by Michelle Milkin’s post on AARP’s dependance on royalties from selling sponsored insurance plans:

A Hill source summed it up for me this way: “AARP has endorsed a huge reduction in funding of Medicare Advantage, which touches over 10 million middle-lower income seniors. If Medicare Advantage funding is reduced, and seniors are forced out of the program, they become potential buyers of the heavily-promoted and very profitable Medicare Supplement program sponsored by AARP (MediGap is 70% of AARP’s annual income). Medicare Supplement is a huge source of revenue to AARP. At a minimum, AARP should be required to disclose this every time they discuss Medicare Advantage.

Since AARP makes a substantial amount of money on a competing product that serves to drive up demand by eliminating co-pays, deductibles, and other elements of cost-sharing for a flat premium; it would make a bit more sense as to why they’re willing to sacrifice the Medicare Advantage improvement in benefits.  Per Bloomberg:

Laupus stumbled onto something that many members of the world’s largest seniors’ organization don’t know: The group, formerly called American Association of Retired Persons, collects hundreds of millions of dollars annually from insurers who pay for AARP’s endorsement of their policies.

The insurance companies build the cost of these so-called royalties and fees, which amounted to $497.6 million in 2007, into the premiums they charge AARP members, according to AARP’s consolidated financial statement for that year.

AARP uses the royalties and fees to fund about half the expenses that pay for activities such as publishing brochures about health care and consumer fraud — as well as for paying down the $200 million bond debt that funded the association’s marble and brass-studded Washington headquarters.

In addition, AARP holds clients’ insurance premiums for as long as a month and invests the money, which added $40.4 million to its revenue in 2007.

‘Fatting the Coffers’

“At the end of the day, it’s all about fattening the coffers of the organization,” says Thomas Orecchio, who was chairman of the Arlington Heights, Illinois-based National Association of Personal Financial Advisors until September. AARP, he says, is sponsoring insurance for its members at inflated prices.

“It’s the dirty little secret,” he says.

During the past decade, royalties and fees have made up an increasing percentage of AARP’s income, rising to 43 percent of its $1.17 billion in revenue in 2007 from 11 percent in 1999, according to AARP data.

So what of Medigap?  Here’s a comparison to Medicare Advantage in terms of how each may add upon the basic Medicare entitlement.

Medicare Advantage vs. Medigap

Members pay an upfront premium with Medigap to eliminate co-pays, co-insurance, deductibles, and other financial restraints on services.  This seems a little odd, when you think that the reason these were put in place was to reduce unnecessary utilization.

So why then isn’t Medigap part of the overall health reform debate in addition to Medicare Advantage?

Related articles by Zemanta

• Catastrophic Medicare Reform (meganmcardle.theatlantic.com)
• Hmmm: Is the AARP getting “kickbacks” from Obamacare? (michellemalkin.com)
• Is an IOM v. CBO Smackdown Looming on Health-Reform Costs? (thehealthcareblog.com)
• Numberscruncher: The Magic of Medicare (popdose.com)
• Seniors And Healthcare (andrewsullivan.theatlantic.com)
• The AARP and Seniors: Clashing Views on Health Reform (time.com)
• Why Aarp Hearts Obamacare (healthcarebs.com)

Sustainable health reform requires a solid foundation…unfortunately the proposals we’re seeing out of Washington create a more elaborate house of cards, as we continue to create an elaborate health care ponzi scheme.  The House that built Medicare has already saddled our country with Trillions in unfunded liabilities.  The proposals we see look to continue to reward a medical-industrial complex that creates and manages diseases rather than focusing on optimizing the health of people.

So what are the criteria of a sustainable health system?

1. Individuals receive fair value for premiums: Cost-shifting is a major foundation for today’s system.  We take money from the healthy to subsidize the sick.  We negotiate group discounts, undercutting the individual/ small group market.  This creates a phenomenon where insurers cherrypick the young and healthy who overpay and try to avoid the older or sicker who underpay.  THIS IS MADNESS.  Auto insurance has a system where we each pay based on our actuarial risk.  This is the only sustainable approach to health insurance…and may take a multi-year, lump-sum payout type approach.
2. Health Insurance is actual insurance (ie doesn’t insure pre-existing): Insurance, by definition, is a premium paid against a risk.  You can’t insure something that has already happened.  By creating an insurance structure to “insure” what has already happened, we’re looking only to pass cost off to someone else…and the insurance model is the most expensive way to pass along these subsidies.
3. Comprehensive services exist to Actively Manage Chronic Conditions: Chronic conditions (pre-existing) need active management.  We need to have tiers of services that are coordinated and judged against their impact, convenience, and cost.  Those doing the best job at reducing existing risk need to be rewarded…and today are marginalized with a PMPM (per member per month) approach that doesn’t reward the best management of risks.
4. Subsidies occur Transparently: Health care can be expensive and may require government intervention.  However, in an atmosphere where these subsidies are hidden, the subsidized payments tend to be used for many other things than providing the best care for the individual being served.  PCPs should be paid market value for Medicare patients, allowing a thriving primary care landscape (as opposed to starving the PCPs which has resulted in a declining number of gerontologists as we face the baby boom retirement…while numerous specialists will inflate the overall treatment bill).
5. Retail Competition based on Differentiation: Providers are allowed to compete…and price, quality, service approaches, and service levels are all part of the mix.  Is there any reason why we should pay the same amount for an overnight housecall as a 6 minute office visit with an hour’s wait?  There’s a reason why higher levels of convenience and service are not available today.  By the same token, a visit to a nurse practitioner just out of school probably shouldn’t cost the same as the world’s expert on your disease… Until we acknowledge that its ok that innovators are allowed to pursue either higher-priced models for better care or lower priced models for “good enough” high-volume care, we won’t see the innovations that will drive service excellence and efficiency in the same markets.

I’m all for fairness and equality and everyone having access to an affordable health system.  I’ve laid out the principles that I think create a sustainable system that doesn’t take advantage of anyone or just try to play “pass the cost potato”.  For those who disagree, what criteria would create a SUSTAINABLE system that incented efficient care?

Related articles by Zemanta

• Does anybody really understand the health care debate? (themoderatevoice.com)
• Baucus’ Budget Impact is “Voodoo Savings” Achieved by Taxing the Middle Class (seminal.firedoglake.com)
• The Cost of Health Care Reform (meganmcardle.theatlantic.com)

Having not built the systems to reduce errors, our hospitals and medico-legal system have decided that in addition, denying that errors happen is the best way to make them go away. In stark contrast to the principles of six-sigma, lean manufacuring, and other systems to reduce errors, the
medical system decided that it would instead announce the superhuman perfection of its approaches and allow those who thought otherwise to take them to court.

Per a recent article in the NYTimes:

For decades, malpractice lawyers and insurers have counseled doctors and hospitals to “deny and defend.” Many still warn clients that any admission of fault, or even expression of regret, is likely to invite litigation and imperil careers.

However, by taking back the mantle of professionalism and owning up to their own mistakes, doctors (and hospitals) are seeing benefits to defying conventional lawyer-driven wisdom.

By promptly disclosing medical errors and offering earnest apologies and fair compensation, they hope to restore integrity to dealings with patients, make it easier to learn from mistakes and dilute anger that often fuels lawsuits.

Malpractice lawyers say that what often transforms a reasonable patient into an indignant plaintiff is less an error than its concealment, and the victim’s concern that it will happen again.

Despite some projections that disclosure would prompt a flood of lawsuits, hospitals are reporting decreases in their caseloads and savings in legal costs. Malpractice premiums have declined in some instances, though market forces may be partly responsible.

At the University of Michigan Health System, one of the first to experiment with full disclosure, existing claims and lawsuits dropped to 83 in August 2007 from 262 in August 2001, said Richard C. Boothman, the medical center’s chief risk officer.

“Improving patient safety and patient communication is more likely to cure the malpractice crisis than defensiveness and denial,” Mr. Boothman said.

There are important lessons here:
1) Medicine is first a profession, who’s roots are anchored in a trust that patients have in their doctor’s ability to look after them. Violations of that trust yield a sense of violation and emotional need for retribution that go far beyond what simple mistakes would otherwise require to address or fix. Owning up to mistakes and highlighting how they are being fixed instead restores the professional nature of the conversation and, while not a terrific conversation, allows that doctor to regain trust in working toward a solution.

2) Without transparency, these problems don’t get fixed. To follow the legal line of thinking, any investigation of systematic error must be suppressed to ensure that the trials don’t uncover institutional awareness of the problem being denied. Instead, we must make sunlight our disinfectant– understanding outcome metrics and where we are falling short will allow our best and brightest minds to develop solutions. The choice of metrics is important– we will only manage what we measure.

3) The time and tools for effective communication need to be in place. The hamster wheel of current medical practice trains physicians to be technicians rather than trusted advisors and thought partners. Ensuring that physicians have the time to build trust and help guide patients through their options is critical for those patients to then feel engaged and empowered. Few people will lash out at that experience, even when bad things happen– per a presentation by Dr. Thomas LaGrelius of SIMPD, concierge medicine docs haven’t yet been sued for malpractice. Maybe, if we spend time with our patients and are responsive, they realize that their doc has done everything humanly possible.

4) Doctors are not superhuman and we need to stop expecting that level of performance. We need to build the right systems and support mechanisms to amplify the capabilities of the talented people in whom we trust our lives. We also need our medical schools to change the focus from the merely technical and clinical into helping raise a generation of physicians that can be true quarterbacks and leaders of teams to best help their patients reach their health goals.

George Halverson, Kaiser Permanente’s CEO gave a keynote earlier today at the World Health Care Congress in Washington DC. The statistics he gave were compelling. The opportunities, also, really interesting. From a consumer perspective, the prescription he wrote was not– heavy on centralized best practice reminiscent of the socialistic economy.

The issues today are pretty clear– we are focusing our resources heavily on the sickest individuals.

• 1% of the sickest consume 35% of the health spend
• 10% of the population consumes 80% of the health spend

Even more compelling are the stories of conflicting interests, where an institution such as Virginia Mason is able to significantly reform health costs through better treatment up front (in this case imaging)– only to find a 30% revenue cut putting the institution at a disadvantage in being able to meet payroll and overhead expense.

But these innovations, although they lowered costs and seemingly were good for patients, hurt Virginia Mason’s bottom line. For example, “the big employers saved $100,000 in the first year. But Virginia Mason fell into the red on the average migraine case, instead of breaking even as before.”

The diagnosis was clear– hospitals and hospital systems make such a large sum off of “excess” care, that they can’t afford to get off the gravy train by doing the right thing.

In my mind, this is where the solution laid out was exceedingly non-consumer friendly.

Halverson suggested that universal mandates are required to make health affordable– taking spend for the sickest 1% from $12K/month down to a more manageable $300/month. This makes sense if one looks at the purpose of insurance as a mechanism for wealth redistribution/ wealth transfer.

From the viewpoint of the healthy consumer, spending $300/month for no benefit is a poor economic choice. The business model for insurance in fact rests on a different trade-off, the payment of an underwritten premium that matches actuarial risk against level of insured protection (e.g., amount of potential claim payment one could attain if the risk in fact occurs). The healthy consumer then faces one of two choices– pay premiums to insure against future risk or opt out of insurance altogether. As insurance costs go up, and are focused on highly technical solutions with marginal benefit, we would expect to see the largely healthy opt out, as we are starting to see in the employer health insurance market, via CDHP plans or dropping the benefit completely, as the job. Employers are increasingly showing that they believe health insurance’s cost is not a good value for the job(s) it was hired to perform.

The solution is unlikely to come from the hospital system that is disincented to cut its own throat by reducing the cost/ delivery of high tech care. Instead, how can we create incentives that increase reimbursement/ wealth for those that reduce the shift of the “healthy” 80% into the “sick” 20%? How can we also create better value for those currently seeing minimal value for their contributions, and limit the spigot being poured, without accountability, into the sickest 1%?

Medicare proposed sweeping changes to the way it reimburses hospitals, outlining a plan that would essentially redistribute cash by reducing payments across the board and then giving providers a chance to “earn back” money by meeting quality-of-care thresholds.

Its not surprising to see individual providers opting away from Medicare patients with reimbursement not tracking to inflation, and with a 10% punitive Medicare reimbursement cut hanging over their heads, and noise about further requirements for installation of EMRs making their economics look even worse.

Unfortunately for hospitals, demographics dictate that a large portion of their patient population and revenue is tied to Medicare, where these unilateral decisions can be made. (Medicine and Economics blog has a great post on government’s difference from corporations and charity being the ability to use force, Covert rationing blog has a great post on how Medicare/insurance contracting is non-negotiable, and therefore monopolistic and potentially illegal)

“We think this is another step down the pay-for-performance road,” said Tom Valuck, who led the project for the federal Center for Medicare and Medicaid Services, or CMS. “That’s the heart of pay for performance — if you’re not performing, you’re not paid as much.”

As laid out in the report, Medicare would cut payments to all facilities by a flat 2% to 5%. That money would then form an incentive pool for distribution to hospitals that show the most improvement or that meet or surpass certain thresholds on a variety of quality measures. The plan, dubbed “value-based pricing,” would require congressional action to implement.

As you can see from the statements made, there is no win-win in this equation. In this case, hospitals, many operating on margins under 5% will find their Medicare reimbursement cut by 4-5% by government fiat. The government may then give back some of that money, and if they do so, there are lots of new documentation and process requirements that will further dictate how you deliver care.

The agency said the program is designed to be cost-neutral to the government, and could even save money if Congress decides not to require redistribution of all the withheld cash. Lawmakers ordered up the report in 2005 as part of a deficit-reduction act.

And here is the kicker. Under the guise of quality, Medicare may simply cut reimbursement and not give it back. After all, the report was ordered up as a way to see if they could take money out of the Medicare kitty.

In the private world, innovators get large market share shifts and laggards get to try to hold onto their share, but pricing declines and quality increases because innovators get outsize rewards, and work harder to create better value for the market to earn them.

The Medicare approach is more akin to having a rat in a cage getting random shocks to speed its journey down the treadmill. Everyone is being prodded at the same rate, regardless of the effort’s ability to address market needs, and government provides random, unpredictable shocks that redirect the herd when it realizes the course it plotted isn’t working as planned.

In entrepreneur/ IT parlance Medicare is using the Waterfall model (give them specs, lock them in, and see what you get), rather than the entrepreneur’s agile model (beta test, iterate, iterate). The difference is that in a market system, entrepreneurs are essentially a portfolio of pilot tests, allowing society to pick things that are proven to work before creating major shifts of share to promising but unproven methods or technologies. The current approach is akin to running a herd of lemmings full speed toward a perceived crossing of a gorge, and hoping that there really is a bridge there upon arrival so they don’t all fall in.

Personally, I’m excited to see Medicare play such a heavy hand– it accelerates the animosity towards and ineffectiveness of the current comprehensive insurance-based system, priming it for alternate solutions (such as Health Shoppr‘s development of a retail marketplace for health services, coming in late 2008). As a physician, I see the current approaches to be unsustainable and within the next decade, I think we’ll see a significant retreat from comprehensive insurance toward catastrophic only (potentially lump-sum payment vs. defined benefit).

One day in late July, Jim Dawson happily returned home. He had spent the previous five months in the hospital battling an infection that nearly killed him. The phone rang shortly after Mr. Dawson and his wife, Loretta, entered their house.

It was the hospital. California Pacific Medical Center was calling to remind the Dawsons that they owed it $1.2 million.

So how exactly does an individual with health insurance rack up $1.2M? The bill looks pretty similar to the DoD’s $12,000 toilets and $900 nails:

While hospitals say bill padding is their only defense against the aggressive cost-reduction efforts of insurers and government programs, the end result is that individuals can, with little warning, be left stuck with wildly inflated medical bills.

For instance, CPMC charged Mr. Dawson $791 for stockings designed to improve blood circulation. The same pair can be purchased on the Internet for as little as $12.

Mrs. Dawson asked to see an itemized bill from CPMC. When she received it, she was shocked by how much the hospital had marked up inexpensive items like the stockings. CPMC charged Mr. Dawson between $2,225 and $6,675 a night for an oxygen mask to help him breathe while he slept. After he was discharged from the hospital, the Dawsons rented one from a medical-supply store for $250 a month. Mrs. Dawson resolved to try to negotiate the bill drastically down.

In her quest to know exactly what she was being billed for, Mrs. Dawson also asked the hospital for copies of all her husband’s medical records. A copy service used by the hospital called to say the copies would cost $1,030. Mrs. Dawson was outraged. Further angering her, a letter from CPMC’s foundation soliciting a donation came in the mail.

So the basic premise under insurance is that the hospital’s poor ability to negotiate insurance reimbursement and collect from other patients drives up rates drastically from those that it can actually collect from. In other words, if you actually try to pay, you’ll get screwed because you’re paying for all the other people that didn’t want to pay.

Despite our supposedly free-market healthcare system (which the socialists complain about incessantly), the financial system appears to be rather socialistic– take from the rich (or anyone who tries to pay) to pay for the poor (or anyone who doesn’t want to or can’t pay).

“I do not deny that our charges look insane,” says Dr. Pont, CPMC’s chief medical officer. But all hospitals operate the same way, he says. “It’s the reality of the industry.”

Once its operating costs are factored into an item’s charge price, Dr. Pont says the hospital marks up that price by threefold to account for the fact that it only collects on average a third of what it bills in any given year. Although the nonprofit hospital reported $123.7 million in operating income last year, Dr. Pont says the money goes to charity care, cutting-edge medical equipment and new facilities to comply with the state’s stringent earthquake-safety guidelines. CPMC says it dispensed $5 million in charity care last year and gave another $6 million to community clinics and health centers.

The really surprising thing is that all these bills are realistically 1/3 of what is charged if we had appropriate payment approaches (e.g., government and insurance companies paid a realistic list price instead of starting with fictitious MSRPs). The people currently paying list price are at the poorest end of the spectrum– and the ones who most need the realistic sticker price over list.

Managing ways to get these individual items down is do-able if you start out at a price that people may be able to pay. Starting with fantasyland numbers and shifting costs all over the place in a way that no-one can unravel is tooth-fairy management: I have a mess on my hands but I’m trying hard so someone needs to pay me.

Sunlight is a great disinfectant– I’m looking forward to seeing it spread through medical billing.

Addendum: Health Care Renewal has a great post on Medicare’s paying super high prices for simple supplies (but they do keep administrative cost low)

]]> http://blog.consumerfocusedhealth.com/2007/12/hospital-care-cost-shifting-runs-amuck/feed/ 0 http://blog.consumerfocusedhealth.com/2007/09/schip-laws-will-reduce-access-to-pediatricians-how-does-this-help-kids/ http://blog.consumerfocusedhealth.com/2007/09/schip-laws-will-reduce-access-to-pediatricians-how-does-this-help-kids/#comments Fri, 28 Sep 2007 17:58:00 +0000 Vijay Goel, M.D. http://consumerfocusedhealth.com/blog/2007/09/schip-laws-will-reduce-access-to-pediatricians-how-does-this-help-kids/

SCHIP, if passed and adopted, will be a disaster for what remains of primary care in our urban markets, driving qualified general pediatricians away from serving poor children, due to inability to afford a quality practice. As a supporter of consumer choice and engagement, I don’t see how paying pediatricians less will encourage them to spend more time and pay better attention to the wellness needs of an increasingly obese and inactive set of children that are our next generation.

As a person who had to turn away from a career choice of pediatrics residency based on moral issues with what reimbursement had done to preventive/ wellness care, I am appalled to see support for a program that will significantly cut reimbursement for kids who switch into the government program, driving docs away from the CHIP program, and potentially out of primary care. (government rates are by law significantly lower than reimbursement negotiated with by private insurance)

Pediatricians are amongst the most dedicated and worst paid physicians in the field– to make it impossible to provide high-quality care for urban kids in the primary care setting due to mandated government rates is one of the worst ways to “improve” access to insurance–as it takes away any access to the physicians who deliver the care.

In the US healthcare system, the predominant non-government source of health “coverage” comes from the employer. While these strange bedfellows may have been put together by wage freezes during World War II and tax laws favoring employer purchasing, it would be expected that employers receive significant benefits for the billions spent annually on healthcare as the predominant portion of the benefits package.

So what do employers get out of the bargain? And where would we expect them to do to improve those returns? Lets take a look.

Reasons employers offer healthcare:

• Part of package to attract and retain talented employees
• Tax savings relative to salary
• Improve worker productivity
• Community goodwill

• Attract and retain employees

Employees have been trained to expect health benefits as a portion of their employment package. Therefore, companies seek to meet expectations to attract and retain key personnel.

Most employees, however, don’t understand the health benefits they receive. Therefore, rather than calculating total benefit, they tend to see the equation only from the costs they must shoulder– employee premiums, co-pays, and deductibles. Most employees do not understand how much an employer is spending on the plan– and some employers use this to cut benefits and others are not publicizing the value they are providing.

I would assume, that as employees get used to the concept of a low premium/ high deductible plan, that amount of money deposited in their HSA will immediately be comparable, especially where it meets or exceeds the deductible.

Don’t forget that health is but one part of a package that includes salary, vacation, sick days, retirement, vision, dental, EAP, childcare, etc.

• Tax Savings

Money spent on health is pre-tax for the employee, who potentially gains more in benefits than they would in equivalent salary. I believe the employer also avoids payroll taxes, which adds to the tax savings. However, this tax benefit is only desirable to the point that the employee feels that the health benefits outweigh the salary.

As health insurance costs have grown, healthy employees often feel short-changed, as their wages do not reflect what others of their skills make on the free market (especially at small companies or self-employed, where health benefits tend to be slim). Again, employees are often unaware of health benefit costs…and most of the benefit goes to those who are sick or have sick dependents. This may predispose a number of the healthiest employees to leave for better salaries– making benefit costs spiral for those who remain and are unable to leave due to dependence on employer-based insurance. This tends to be seen in industries with an aging workforce.

Similar to tax savings, from a workers perspective, is savings from pooled purchasing– although this is much more true for the older and the sick than the younger, healthier portion of the workforce.

• Improve productivity– clear opportunities from reduction in absenteeism

Productivity gains come from a few different factors: security, reduction in communicable disease, and reduction in injury/ illness on absenteeism. There is also literature around a condition called presenteeism, which we’ll discuss below.

Employer benefits from a feeling of security are somewhat unclear, as one might expect someone without employer-provided insurance to obtain insurance on their own if it was a major concern. That leaves us with those unable to obtain insurance in the individual market– who are much more likely to require significant spend from a pre-existing negative health condition within their family. Net benefit to the employer will vary by the expected medical spend, as a medical condition is likely to also impact the focus of the individual at work.

Reduction in communicable disease is also somewhat questionable, as it would be closely tied to the trends of employees to stay at home (connected to sick day policy) when they start feeling sick vs. when they are truly expressing their illness (communication of common colds/flus/airborne infections tends to happen early in the disease process). Antibiotics though can shorten the duration of an infectious disease and allow the individual to return to work.

Injury and illness can prevent people from coming into the office. Where skills are irreplaceable and timelines are tight, this can impact a significant amount of work and require expensive overtime or replacement workers. Significant illness and mortality can make companies hire new personnel and go through a transition period as they get up to speed. This category has clearly defined metrics around sick days and replacement hours from overtime/ temps/ replacements that are opportunities for additional investment by companies.

Presenteeism is when employees come to work in spite of illness and are less effective at their jobs. While this has an impact on their coworkers and department, the overall impact to the company is less clear. Where a department is a cost center, there may not be much of a financial impact, as coworkers will often cover for the individual. Where a department is a profit center, and the individual’s efforts drive additional revenue, there is potential for revenue gains from addressing this issue. However, most employers will not have sophisticated enough tools and a coordinated enough human resources system to document and show progress against benefits to presenteeism.

• Community goodwill

Part of the expectation in the still-paternalistic job market is that big companies will take care of their employees, including provision of health insurance. Companies like Wal Mart have been targeted by consumer groups and state legislatures for not providing insurance and having their employees directed to state Medicaid rolls or join the uninsured. However, providing additional insurance has not, as of yet, seemed to make a sustainable difference in increasing sales on its own. It does seem likely that the additional coverage could make a difference by making it less likely for people to be attracted by the overall compensation package, which may reduce the talent/skills available to such companies.

Opportunities to improve returns
It appears that employers are starting to believe that increasing investments in health insurance are not likely to improve performance in the jobs detailed above. Therefore, it would appear that innovations serving employers would focus on helping them to better allocate the spend already devoted to benefits/ health. Some options:

1. Changing benefit structures to allow employees to maximize what features they want (increase employee’s perceived benefit)
2. Publicizing features of health benefit (e.g., premiums paid by employers) to increase perceived employee/ prospective employee return from health benefit
3. Reducing premiums paid (e.g., moving to low premium/ high deductible plans) and putting savings into Health Savings Accounts (zero-su
   m transfer of money into pre-tax accounts to increase perceived employee benefit–especially where HSA provides additional coverage and employee likely to spend less than deposited in account)
4. Investing in disease management and wellness programs that pay for themselves through decreased absenteeism and reduced health insurance expenditures (especially for ASO companies)– type of program and extent of savings will be mitigated by expected employee turnover