One Place 2016 | Benefits 2020 with Consumerdriven's John Young

John Young of Consumerdriven, LLC explains the current state of health plan offerings, and the role employers and health plans play in empowering individuals.



Shawn: Now let's go to our finals. Our next speaker is someone who I have known for several years now. He's the CEO of Consumerdriven and he's a voice for all things consumerism. This is a great place to finish up this session because he speaks to many of the things that you've heard us speak to today or during this conference in terms of personalization and transformation of benefits you know. He was there at the beginning of the shift to account-based benefits helped to create HRAs and HSAs, and has been there through the evolution of private exchanges. He's got a great presentation for you today. So, let's welcome to the stage, John Young. Come on out, John.
John: Good morning, everyone. This morning I want to talk about our industry. Yesterday, we learned that it's no longer called stress it's called pressure, right? This is an incredible time and like Shawn mentioned, I was at the beginning of the consumer-driven movement. It was a revolution. Revolutions don't happen within an industry they happen outside of an industry and the industry acquired consumerism in 2004 and 2005. We became the virus in the machine. We were trying to solve something, something very important, healthcare. Because the individuals were kind of removed from healthcare, this made a significant difference. 
Employers who fund most of this were left with very little options. In fact, it felt to them like all I do every year is rearrange the deck chairs on the Titanic. And we came in with an idea but we had to answer this question. How is this better than what I'm doing? And we're having to answer that question today when it comes to marketplaces and private exchanges. We had to answer this question and the answer was, I think, pretty simple and that was let's do something they've never had before. Let's give people pocket money. Let's give them money upfront that they can use to spend on healthcare expenses and that will be a financial incentive. 
Let's also put this alongside some sort of a plan design that makes them not want to utilize needlessly. Let's give them skin in the game, let's give them an incentive to be prudent about healthcare purchasing. Let's make them care about consumption. And did it work? It absolutely worked. When an organization's do a consumer-driven plan, you can give employees an actuarially equivalent program to the traditional offering, and save 8 to 14 percent the first year and will grow at a slower rate than normal trend. Over time we've saved employers a ton of money. Jump forward to today, I'm excited to say that more than one out of four people are in an account-based plan. By 2018, it's expected that three-quarters of employers are going to be in these programs. Does that sound good? 
I was very excited to read your state of employee benefits, you folks at Benefitfocus, love what you've done in that report. Six percent do a full replacement, another 52% offer it as an option. It sounds like we're on the right track if half the employers out there that are larger offering an HSA 14% are offering an HRA. But, fellas, I'm telling you, I got to have more cowbell. What I mean by that is I think we can do better. I think it's an epic fail that it's taken 15 years to get one out of four people on plans that we know make a difference. That we know improve the health of people. This industry needs more cowbell. And in one area that it does is in plan design. We absolutely have to get back to the purity of consumer-driven healthcare. It's been tainted. Today, people are calling consumer-driven healthcare a high-deductible health plan. Today there's less emphasis on that fund, and there needs to be more for your health plans the design needs to be richer, yes. Mo expensive because then people will see the value in it and they will join it. They will see that with these programs they can win. That's critical and plans year-over-year need to migrate. 
According to trend, we should give people more in the fund, bump up the deductible, bump up the out-of-pocket max each year. This is something called leveraging but it's very important if we keep the same design we start to dampen the consumerisms effect. This industry needs more cowbell. Now, this is exciting to know what's going on in the industry as far as enrollment. Over time people find HSA plans more and more popular. But look at this, if you do not offer any kind of employer match you're going to get at best maybe one out of five people joining these programs. And maybe because it's the lowest cost plan not because they want to be empowered as a healthcare consumer to make a difference. There's a 64% delta between not funding and when the employer puts $800 into this.


How many Millennials are in the room?  You are my favorite generation, you guys. I love you guys. You do not say no. My kids are Millennials so I can speak to this. The one thing you don't do is you don't wonder because any question you ever think about you get an answer immediately. But you won't say no and you are leading the pack in your study. You are adopting high-deductible health plans more than the other generations. But you are under-utilizing the HSA and we have to help your peers see the value of that amazing account that you can put money in tax-free. It grows tax-free. You take it out tax-free for health care expenses. You can let that ride. It's a wonderful thing, and we've got to get that word out. And some other things that are out there in survey world that is disturbing to me is that with an HSA program, half the employers that are offering those less than 40% of their employees are putting money into their own HSAs. Further disturbing, this is a PricewaterhouseCoopers survey from just last year, HSA contributions on average have decreased 16%. We are going in the wrong direction. Consumerism is becoming cost-share. We must stop that. This industry needs more cowbell. 
Now, what really got me excited the first day is when you guys announced that you have a max my HSA button. I love that. I think that is a great thing. Can I hear cowbell for that? That is an awesome thing. You should be proud of that. That is gonna help people. Now, another part of our industry that is kind of a cowbell is these exchanges, these marketplaces, these stores that we're propping up. On average individuals that are selecting their own coverage, through these marketplaces, through these private exchanges on average one out of two are picking an HSA-qualified plan. That is huge. If you are in the exchange business, you are in the HSA business. That's what that means. Let's talk about these exchanges and marketplaces. I often have heard people don't treat healthcare the same way they treat every other kind of economy and that might be true because we have a literacy problem. But the fact is, this is an interesting study that McKinsey just did. When it comes to healthcare companies and when it comes to non-health care companies there's consistency on what people want. They want great service. They want you to deliver on expectations. They want their lives made easier. They want great value. It's the same. They are ready. We just need to help them.
Now, some of the data out there that is showing the interest in private exchanges that employers are planning on adapting and going into these marketplaces and exchanges. It’s on their to-do list. However, a recent National Business Group on health survey showed that there's a little bit of a step back from the c-suite on these programs, that the 2016 survey showed a 9% drop in employers planning to do something for 2017 on retiree exchanges. An 11% drop for active. So, I wondered why, why is that, and it's this. This is a very key and important survey point at the c-suite. When asked do you think these exchanges are going to do a variety of things in 2015 and even worse in 2016? The c-suite say, "You know what, I'm not so confident that we're going to engage employees in better health care decision-making. I'm not so sure these private exchanges are going to control healthcare costs." That's exactly what these things do. We need more cowbell. We need more cowbell when it comes to helping employers see the value of these things because they do control healthcare costs. They do improve the customer experience.
So now, I want to talk about you. Whether you're an employer or a health plan, kind of setting somebody off on a consumerism plan might feel like this, do a good job, do a good job, do a good job. But maybe to the employee, it feels something like this. Wait for it. Wait for it. Bam. What is going to change that? What is going to change the employee from feeling like these plans do? Well if we are going to bring up individuals to be more powerful healthcare consumers, it involves you. Literacy issue is a big thing.
Carnegie Mellon a couple years ago did a survey and asked a bunch of people. "Can you identify deductible co-payment coinsurance out-of-pocket max? Only 14% could and I believe that those 14% were us. But everyone else doesn't get this at all and we have got to do a better job of helping normal people become stronger healthcare consumers. There's lots of efforts to do this, but let's really let's talk about where people's mindsets are. There was a survey that came out that said that one out of four people would rather go to the dentist and get dental work then go through open enrollment. Worse one out of five people would rather see the life story of Lindsay Lohan than go through enrollment. Seriously? Thank God you guys are making that easier, right? 
Well, this is what I think it really feels like to an individual when you're asking them to navigate healthcare. They feel like, "Okay. All right. I think I'm getting them learning how to swim. Now there's a lot of tools and resources that we are bringing together to help people become stronger healthcare consumers. There's some great tools, in fact, even in the exhibits there's great companies like Healthcare Blue Book that's helping people understand the difference between quality with providers difference of cost between a thousand or more procedures. There's great tools and resources available through HSA custodian. Custodians like discovery and through HSA Bank. There's wonderful tools and resources available to people. But what really is necessary is you, it's us, it's every stakeholder. It's personally getting involved.
Now, how many of you believe others can change? I mean it. Do you believe other people can change? Okay. Let me ask it a different way. How many believe you can change? Well, I got to tell you there's a book out called, "Change or Die" by Alan Deutschman and he basically said our industry throws three things at people. It throws information, it gives them facts, then it tries to scare them, and then it tries to force them into a course of action. And we think that that's going to change people's behavior when it comes to smoking, or getting healthier, and it doesn't work. What really works are the three Rs. He said relationships are key. The one thing that we can all do to improve consumer-driven healthcare, is avail our self as kind of a concierge, a friend, and encourage or a supporter of people on a relationship basis. To help them become healthier, to help them become more prudent, to help them see the value of the tools. Then repeat that behavior and by the end of it, it will reframe their worldview. Does this work? Is this difficult? This is difficult. This is difficult. I happen to know this for a fact I've tried this twice and I was dropped both times. It can happen.
Ten years ago, I weighed 75 pounds. I'm still a big guy, I'm on my way. But it was in a new relationship. It can't be your spouse, somebody you know. It's got to be someone new that comes in your life and you can be that to people. That encourages you and supports you on to better health and understanding and that's really at the point. 
When my daughter was six years old, she was in a drawing class and the objective was to draw something the rest of the students can identify. People were drawing footballs and houses and dogs and Maddie was scribbling away and the teacher was walking around and said to Maddie, "Oh, oh honey. What are you drawing?" And she said, "I'm drawing a picture of God." And the teacher says, "But, honey, no one knows what God looks like." And she said, "Well, they will in a minute." The future healthcare consumer fully engaged and empowered to really change this industry to take us to the new directions that we haven’t even have figured out yet. We don't know what they look like but we will soon, and it's going to be up to you.