Swan Song for Traditional Employer-Sponsored Health Insurance?

In my January 2021 column ("Employers' Post-Pandemic Playbook"), I commented on the effects the pandemic is likely to have on employers in terms of workplace safety and health. This month, I'd like to call readers' attention to an evolving issue that will inevitably transform the role of employers in the U.S. healthcare system.

For well over half a century, employer-sponsored health insurance has been central to the U.S. healthcare system. According to recent data from Kaiser Family Foundation, an estimated 49% of Americans still receive health insurance coverage from employers. However, the relentless escalation in healthcare costs and consolidations in the healthcare industry have increasingly rendered traditional employer-sponsored health insurance "unaffordable" for millions of employers and their employees.

The challenge for employers is monumental to be sure! The good news is that creative minds are already at work, and I will be keeping a close eye on the following trends:

Employer-Healthcare Joint Venture. Several years ago, the American Health Policy Institute envisioned a change from the traditional model of employer-provided healthcare benefits to an employer-healthcare joint venture – in essence, a shift to employer-facilitated healthcare. Under this model, employers from multiple companies collaborate in not-for-profit alliances in order to take advantage of combined marketing power – yet each maintains its own system and corporate culture. Such networks of large employers can help drive efficient, quality, and affordable healthcare to foster a healthy, productive workforce.

The joint-venture approach goes beyond commodity purchasing by addressing root causes of escalating healthcare costs, such as declining population health, an aging workforce, and massive inefficiencies in the healthcare system. Collectively developed strategies can accelerate innovation and adoption of new technologies, and joint ventures can be helpful in establishing consistent, rational rules and standards across participating companies in order to reduce waste, increase efficiency, and improve outcomes.

Workplace Health Centers. A recent national survey of U.S. healthcare benefits revealed that approximately one-third of organizations with 5,000 or more employees have established on-site clinics for their workers, and an additional estimated 13% are considering adding this to benefits for 2020. Even smaller employers are beginning to consider on-site primary health clinics.

Onsite clinics can be either self-administered or in partnership with a clinic group or onsite healthcare vendor. Employer-sponsored health centers may be onsite (on the employer's premises), near-site (near employer's work site), or shared-site (serving multiple employer locations in a near-site setting). When considering onsite services to employees and/or dependents, employers need to consider the scope of services (e.g., acute, chronic and/or urgent care, preventive care, diagnostic testing).

In addition to incorporating health assessments with risk identification for high-cost conditions, interactive digital tools (e.g., diet, fitness applications), personal health records, and proprietary electronic medical records to manage care, top-performing workplace health centers take a proactive, holistic approach to employee health and wellness.

The strategic combination of Marathon Health and OurHealth (MyClinics) is a prime example of how successful workplace health center organizations are helping to change the way employers address employee health. These two leading providers of onsite and near-site health centers for employers recently combined their patient-focused primary care capabilities to serve employees and their families across the U.S. The major stakeholder in the combined organization is General Atlantic, a global growth equity firm with sector-specific expertise and a long-term investment horizon.

David Nash, MD, MBA, is founding dean emeritus and the Dr. Raymond C. and Doris N. Grandon Professor of Health Policy at the Jefferson College of Population Health. He serves as special assistant to Bruce Meyer, MD, MBA, president of Jefferson Health. He is also editor-in-chief of the American Journal of Medical Quality and of Population Health Management.

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