Too many livelihoods and groups are invested in the status quo, says a healthcare entrepreneur who is producing a film on the topic.
Healthcare costs a lot.
It's fun, in a painful sort of way, to try to wrap our brain around exactly how much.
Even at rates of increase that have moderated compared with the previous decade, spending for healthcare continues to outpace growth in GDP. The National Health Expenditures Report projects healthcare will grow at a 5.8% annual rate through 2025, at which point it will eclipse 20% of the U.S. economy.
But that's not even the scariest part about the web of regulations, strange payment relationships, and poor quality that contributes to healthcare's inefficiency and expense, says Dave Chase, a healthcare entrepreneur and executive producer of an upcoming film on the matter.
Film Has the Goods on Healthcare Industry. Prep to be Tarred.
He blames the healthcare industry for a persistent financial hollowing out of the middle class over the past two decades, drawing dark parallels between healthcare costs and the rise of populism.
"If you look at what's going on with the most unique presidential election in my lifetime, one overriding issue is that there's wage stagnation, which is a nice way of saying the middle class has been in an economic depression for 20 years," he says.
"You don't have to look any further than 1930s Germany to see what can happen when masses of people are in financial distress."
Hyperbole?
Maybe, but "masses of people" aren't the only groups in financial distress. Employers are also spending far more than they did 20 years ago on employee healthcare. They are also at the end of their rope.
Unfortunately, their answer has been to pass along a greater share of the costs to their employees. That strategy may backfire spectacularly.
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"We've gone to war for less than what healthcare is doing to America," Chase is fond of saying.
'Unbreaking' Healthcare
Solutions are available, but too many livelihoods and groups are invested in the status quo or in the case of employers, apathetic, he says. The film will address those problems and the solutions in an irreverent, satirical way.
"Solving the problem isn't all that complicated," he says. "There are companies spending 35% less per capita with a better health plan. "They're winning against perverse incentives because they purchase healthcare differently," he argues.
He plans to highlight both employers and healthcare services organizations in the film. One is Rosen Hotels & Resorts, an operator of several properties in the Orlando area, whose CEO has committed to using the money saved from not paying ever-rising healthcare premiums (about $10 million per year--$240 million since inception) to provide daycare, after-school care and college scholarships for people in an "adopted" underprivileged community.
Rosen employee turnover is sharply lower than other similar businesses (low teens annually versus nearly 60% in hospitality) and it pays the college tuition of full-time employees' children after the employee puts in at least five years of service.
The problem is that such solutions are not widely known, Chase argues, and that they require the CEO to insist that healthcare expenditures deliver value the same as any other purchase the company makes.
Many CEOs judge the success of their healthcare benefits plan by the number of complaints received from employees. Value is a distant second on the priority list. The film, he hopes, will change that.
Employers Failing in Fiduciary Duties?
Employers may soon be forced to change their stance on value due to regulatory and legal concerns.
Chase believes a simple determination by the Department of Labor or a verdict in a class action lawsuit will eventually force employers to be better stewards of healthcare spending.
A court decision that holds employers responsible for looking after the best interests of their employees in purchasing healthcare coverage, or a DoL finding of the same, would radically reorient the calculus.
A precedent may be found in the way employers already must safeguard employee retirement savings. Employers are heavily scrutinized on the choices they offer to employees around retirement programs such as 401(k) plans. What if the same standard applied to healthcare benefits?
By that standard, employers are failing, Chase says.
"There will be a moment in time… where the issue will be solved clearly," he says. "Employers take fiduciary responsibility with investments very seriously. You know you will get sued if you put employee money in Uncle Bubba's Investment Fund."
Why isn't that happening on the health benefits side? A historical argument that healthcare benefits are paid using the employer's money, making them exempt from fiduciary duties.
"High-deductible health plans are pretty much the norm now, with 70% of costs paid by the employer and 30% paid by the employee," says Chase.
"So if that argument ever held water, it doesn't now. All the Department of Labor needs to do is say this is the employee's money, and all hell will break loose, and there will be a level of scrutiny there's never been before."
Philip Betbeze is the senior leadership editor at HealthLeaders.