1. Could Medical Hospitality Save the Employer Health Benefit Market ?
Ever since the end of World War II, employees have come to expect health benefits as part of their
compensation package. Much has changed in the last 70 years or so, not the least of which was more
and more restrictive legislation hemming in employers and insurers alike. Beginning in the 1980’s the
legislative restrictions ramped up, with COBRA laws, Small Group Reform, EMTALA and a plethora of
other laws having employers and insurers scrambling to keep up and still keep quality benefits, even in
the face of an aging and longer-living population. In 2009, the year before The Affordable Care Act (aka
“Obamacare” and ACA) became law, the average profit margin for health insurance companies was a
measly 2%. For Self-Funded Employers (companies who act as their own insurance companies to save
on administrative fees and increased costs from complying with state rules), employee health care
spending has reached an all-time high, accounting for a large part of its human resource budget.
At over 2000 pages and an additional 30,000 pages of regulation the ACA is the most all-encompassing
healthcare overhaul since the Medicare Act of 1965, resulting in double-digit price increases. Premiums
for families have increased, too. The total cost for an average family of 4 for health insurance, (including
the Employer’s portion) is over $22,000 according to a 2013 Milliman Medical Index Report. But that’s
not the worst of it…in 2018, employers and insurance companies face their greatest challenge… a 40%
surtax, dubbed the “Cadillac Tax”…on health plans deemed “too (benefit) rich” according to government
standards. The problem is that the “too rich” determination is not based upon the actual benefits, but
the cost of those benefits. When this author asked a large casino/hotel CEO in 2008 about what plans
his company had to avoid the surtax he responded that “the unions will have to make concessions”. I’m
no expert, but we all know how much unions love concessions.
It’s not all doom-and-gloom, though. The ACA recognized that a huge cost-driver of healthcare costs is
largely due to “preventable” illnesses, or illnesses caused by lifestyle choices. Smoking, obesity, poor
diet and inactivity all serve to make us less healthy, and in return, cause the majority of heart disease,
diabetes and high blood pressure in America. As such, “wellness” programs are experiencing a
resurgence in popularity, despite data that shows they are relatively ineffective due to support issues.
Other trends are showing marked increases, such as the desire to travel overseas for medical
procedures, known as ‘Medical Tourism’, resulting in healthcare procedure savings of 50% to 80% or
more over U.S. prices. While overcoming quality-of-care issues in the early days of Medical Tourism, it
still lacks a centralized process and is only utilized when illnesses reach a critical level requiring care,
which is the worst time to travel.
Enter ‘Medical Hospitality’… a platform that enables early healthcare issue detection, medical
procedures if necessary at savings of up to 80%, lifestyle support services, and dietary assistance, all of
which is vacation-based, resulting in a much higher adoption curve and recovery if services are needed.
For more information and to see if your company qualifies, contact danh@compassliving.com.