How our small business wrestled excellent care from the jaws of the astonishingly absurd health care system. Part 2: The battle for better health care.
Having been to the edge of health care despairia after a mad scramble in the wake of canceled care and landing in a terrible plan as a result, we were determined to 1) find a better plan and 2) take the time to get it right. We gave ourselves six months to go all-in on research to identify our health care insurance options, winnow these options down to finalists, then pick a winning (and hopefully much improved) plan.
That journey is outlined here for multiple reasons:
- It’s a good illustration of the importance we place on health at Culture Foundry.
- It could be a useful resource for other small companies looking to provide the same.
- There are a lot of opinions flying around right now about “choice” in health care; having made a choice for an entire team, we have some front-line perspective to share.
We invested a tremendous amount of time and money in this process, with the aim of improving our health care coverage package significantly. Why?
- It’s scary out there. Health care markets, already unstable, are now in the middle of a chaotic battle. Public plans are targeted. Private coverage is also getting affected. Investing in a plan that provides some buffer from that anxiety makes us a better place to work.
- We believe that health is priority 1. And 2, 3 and maybe 4. And not just when we have a cold. A healthy team is a happy team is a productive team.
- Because we can. As we evolve, we develop the means to invest in areas we couldn’t previously. This was our next priority.
- In keeping with the above, we’ve always paid 100% of the health insurance premium share for our employees, and wanted to continue to do so with the new plan.
By the numbers
Number of health insurance plans we investigated
Number of plans that made it to the finals
Number of times the “winning” plan failed its real-world coverage test and turned out to not be the winning plan after all
Months this process took
Layers of intermediaries involved in picking a plan
That last point—5 layers of intermediaries—is one factor that made this process particularly time-consuming. Establishing the economic mechanism for a patient to see a doctor required the following intermediaries to get involved and strike a deal about how that would go down:
- The patient’s employer (Culture Foundry), working with several:
- Health insurance brokers, working with several:
- Professional associations, providing insurance as a member benefit through:
- Health insurance providers, offering multiple plans that cover several:
- Medical groups (but not all of them)
Our relatively small size (10 people at the time) meant we had some additional challenges. The first was to find a health insurance broker focused on the small business space. We had been a very small fish in the eyes of our previous broker, which quickly became obvious when we made noise about failures of care under our previous plan. The second was that going through the additional layer of a professional association was all but required.
While we had multiple brokers present multiple options through multiple professional associations, it was still on us to delve into the details and verify these plans against the real-world needs of our team. Having been stung once, we dug deep at every level.
What we learned
Health insurance companies fall into two categories: the “blues” and the “bewares”
The “blues” refers to Blue Cross / Blue Shield, which isn’t a company so much as a licensing organization. Its franchisees are independent, vary widely and together insure about 100 million Americans. While many are for-profit entities, the key detail is that they all draw from nonprofit DNA: Blue Cross / Blue Shield has been around in some form since 1929, but didn’t allow for-profit franchisees until 1994.
In the other category are companies like UnitedHealthcare and Aetna. These companies have for-profit DNA at their core. They claim that as more entrepreneurial companies they can drive innovation in health care, but in our experience (both as a company and as individuals covered under prior companies) they direct most of their innovation toward their own bottom line. So yeah, beware.
One key “tell” when evaluating companies in either category is executive compensation, which we view as a good indication of the company’s value system and, more precisely, how many of our health care insurance dollars will likely be routed to profit rather than care. CEO compensation is readily discoverable and was one of the measures we used when comparing providers.
Prescription coverage requires equal diligence
Filling a prescription is typically a more frequent occurrence than visiting a doctor, but evaluation of prescription plans can get short shrift as they’re assumed to be “just included” with the primary plan. Don’t assume. Some of the biggest “gotchas” with our previous plan leapt out of prescription coverage failures, a problem exacerbated by the fact that the insurance provider and prescription provider were separate entities, setting the stage for the “infinite runaround” when things went wrong.
Fresh off this lesson, we asked our employees to pay special attention to prescription coverage when evaluating the “winning” plan against their real-world coverage needs. This diligence paid off, as our first plan candidate passed the provider test, but failed the prescription test. Our “winning” plan was moved to the losing column, and our search continued.
The US health care market is not a “market” at all. It’s a mess.
What kind of “market” is this?
- Employees are chained to their employer’s plans.
- The cost of switching (at the corporate and individual level) is extreme.
- “Rack rate” and “real” pricing for services and prescriptions is opaque, non-intuitive and dangerously unstable.
- You never know what you’ve really bought until you try to submit a claim.
- Additional cost is incurred by customers and doctors who often must invest time in a “wear ‘em down” strategy to get necessary services and prescriptions covered.
- Additional cost is incurred by companies like Culture Foundry, which must suddenly invest in becoming temporary health care industry experts when it’s time to determine company coverage.
- Insurance companies are structured to outsource responsibility and accountability, creating conditions for the “infinite runaround.”
- The industry profits off of customer confusion, which is why it’s perpetuated.
The notion of “choice” in our current health care system is illusory
There’s been a lot of chatter in this election year about the value of “choice” in health care.
The convoluted process we went through may carry the illusion of choice, but from our perspective it was a choice of evils: Invest a massive amount of time in researching and navigating the nuances of the health care insurance industry, or risk being hung out to dry with a plan that doesn’t actually cover anything.
Our employees essentially got zero choice: A health care plan selected by people (us, leaders of a small technology company) who may be well-intentioned but have zero expertise in the field. This is ridiculous and to our employees should be about as terrifying as the notion of the CEO climbing into the cockpit without a pilot’s license to fly the team to the next company trip.
These findings also reflect that while we invested a lot of time in researching how the industry works, there was a limit, and thus this post carries a massive caveat that we may still not know what we’re talking about when it comes to health care. If you think that’s a problem, we’d agree. In fact, we’d say that’s exactly the point.
Our selected plan
So where did we land?
From an employee perspective, it compared favorably with the old plan: lower deductibles, similar out-of-pocket maximums, still compatible with Health Savings Accounts (which we offer), and the addition of dental, vision and life insurance benefits.
The new plan was only 3% more expensive than our old one, so it penciled out on that front as well, enabling us to continue to pay 100% of the premiums on behalf of our employees for all plan types.
Our confidence was further bolstered by familiarity. Premera Blue Cross had been our original plan before the health care despairia fiasco that had (at no fault of Premera’s) sent our coverage careening into serial disarray in the first place.
But how did it work out?
We undertook this selection process in 2017, and have utilized the plan for two full years now. Our experience at all levels has been generally good (we’d tell you if it wasn’t), but also not free of the problems that afflict this industry as it runs today. Costs have gone up about 10-15% each year. One year, we found that our prescription plan had been degraded without notice or warning, and it was never quite clear at which layer of the process that disconnect occurred.
The real measure of success, however, is whether the health insurance resulted in actual coverage for members of our team, making their lives easier, rather than denial-of-coverage, making their lives harder. On that front, the plan has received good marks (we encourage employees to report denial of coverage incidents so we can escalate from the company side), with the main concerns cited so far being around tracking expenses against deductible levels.
So we’re good, for now, but only thanks to the “choice” to invest a tremendous amount of time and money to counter the flaws of an inherently absurd health care system. This couldn’t be farther outside our core business. If the burden of health care expenses and administrative overhead were lifted from this small business’s shoulders, we’d be nothing less than unleashed, freed to spend those resources on new services, products, jobs and innovation. That’d be a real choice, one that a lot of other small businesses — wondering how they got left holding the bag for the failed economics of the US health care system — would leap at the opportunity to make.