Let's say you're a health plan executive looking down the road at the future of your company in the age of healthcare reform. You realize that in a couple of years, many of your employer clients could walk away and join a state health insurance exchange with their employees. What do you do to hold onto your clients?
Take off your vendor hat, put on your employer hat—you're a company with employees, after all—and start asking yourself the same questions you ask any of your vendors: What are we getting for this investment? What's the value?
Then have your CFO reach out to your client's CFO for a conversation about healthcare value, why a healthier work force is important to their business, and what your health plan is going to do to drive that value for their employees.
CFO conversations are important because they speak the new language of healthcare sales, which is becoming less focused on the mechanics of disease management and copayments and more focused on how an investment in healthcare relates to worker productivity. In the new healthcare paradigm, employers want to know what's in it for them. Does their investment actually improve employee health?
Health plans don't need to be shy about this approach. "CFOs are ready to have this conversation with the health plans," says Andy Hunzeker, the CFO of Lincoln (NE) Industries. "I see the healthcare of our employees as a competitive advantage for our company, so I'm ready to talk." Focusing on the ROI of healthcare has already helped his company save about $3 million annually in healthcare costs, he says.
Thomas Parry, president of the Integrated Benefits Institute, likes to tell a story about a vice president of wellness preparing to make a 15-minute presentation for the leadership team at her company. In a practice session with the company CFO, she talked about wellness efforts in terms of fewer ER visits and shorter hospital stays. The CFO stopped her. "You'll lose them in five minutes," he said. He suggested that she focus on what an unhealthy worker could mean for lost worker productivity. Her revamped presentation began with a simple statistic: If wellness benefits helped the company's 60,000 employees save one day of lost time per person, it would translate into $19 million in productivity gains.
The point, says Parry, is that the CFO is emerging as a champion of the importance of workforce health in business, and health plans need to plug into that energy by becoming a partner in the effort rather than just remaining a vendor.
About 10 years ago, Parry's group began looking into the role CFOs play in healthcare decisions. The CFO view of healthcare benefits has shifted from one based on cost centers to a business strategy basis. Recent survey results from IBI demonstrate that CFOs view employee health as having an impact on financial performance and productivity, in both conventional measures (healthcare expenses, sick day absences, overtime, and temporary workers) and ways that are less conventional and more difficult to measure (missed revenue opportunities, reduced product and service quality, and excess labor costs).
As a result, CFOs today are playing a bigger role in healthcare benefit decisions. The breadth of information they consider in making health plan design and purchasing decisions has expanded well beyond monthly premiums and cost sharing.
CFOs are poring over claims data, employee sick leave, health risk assessments, and productivity impacts to assess various healthcare benefit decisions, Parry says. And there's more information they'd like to have, such as ROI from health interventions. Only 15% of CFOs say that ROI data is available to them. They are also interested in benchmark data from other companies.
Hunzeker says health plans need to provide some of this information, adding that plenty of population health data could be presented in meaningful ways without violating HIPAA policies. He points to WeightWatchers participation as an example. "There's data out there about how this program helps reduce health costs. CFOs need that information to extrapolate into other areas, such as how weight loss can reduce absenteeism and increase productivity," he says.
Health plans that can become a partner to CFOs will have an advantage as companies consider their coverage options.
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
