Opinion | Time for Employers to Take the Reins on Employee Healthcare

Healthcare is big business in the U.S., where employers and other purchasers spend billions of dollars on it every year. Unfortunately, the national health quality/safety statistics tell us that nearly one-third of that healthcare spending is “wasted” on unnecessary or duplicative procedures, inflated administrative costs, medical mishaps, and outright fraud. To make matters even worse, purchasers looking to provide high-quality health benefits for their employees at a reasonable cost have long been frustrated by the healthcare industry’s systemic lack of transparency and accountability.

It should come as no surprise that a growing number of employers have expanded their roles in delivering high-value care to their own employees and, over the past few decades, we’ve also seen the rise of regional healthcare purchaser coalitions. Under the umbrella of the National Alliance of Healthcare Purchasers Coalitions (which includes private and public sector, nonprofit, and union organizations), these coalitions now represent more than 45 million American lives with annual spending of $400 billion annually on healthcare. Collectively, they are driving the movement toward health equity and value in the healthcare marketplace.

At the invitation of Karen van Caulil, PhD (president and CEO), I had the privilege of delivering the keynote address at the 40th annual conference of one such coalition. The Florida Alliance for Healthcare Value conference certainly lived up to its impressive title: “40 Years of Impact: Pioneering Progress in Healthcare, Addressing Challenges, Shaping the Future”.

For me, a real highlight of the conference was meeting and listening to Harris Rosen, the 80-year-old founder, president, and COO of Rosen Hotels and Resorts. This relatively small regional chain based in Orlando has a distinctly diverse employee base in terms of culture, race, socioeconomic status and demographics. Many of its 5,000+ employees are immigrants who previously lacked access to healthcare or education and, as a result, have complex health issues (e.g., tuberculosis and a 56% high-risk pregnancy rate).

Twenty-four years ago, Rosen took active control of the organization’s healthcare benefits, creating an employee health plan that today serves as a model for successful employer-sponsored healthcare. The high-value outcomes Rosen achieved have made him a veritable celebrity. In the process of lowering costs (55% less than the average) by reducing waste, the organization has fostered a much healthier, more satisfied workforce with a turnover rate in the low teens versus a hotel industry turnover rate approaching 60%.

The organization continues to innovate. With a corporate commitment to wellness, on-site clinics with vetted providers, and an operations staff dedicated to healthcare, Rosen’s employer-sponsored health plan features:

• Unlimited primary care visits that are free and “on the clock” for all employees. There is no cost for transportation, most routine and preventive care, physicals and health screenings.
• No copays on 90% of prescriptions.
• Negotiated reference-based pricing for most major procedures.
• On-site immunizations, family planning, nutritional services; pay cost differentials for unhealthy versus healthy meals in the employee cafeteria.

Early on, Rosen recognized the value of reinvesting a portion of the organization’s cost savings in the communities where employees live. Over the past 24 years, he has invested $11 million (the amount that would have been overspent on healthcare in a single year) in Tangelo Park, an underserved, once-crime-ridden neighborhood in Orlando. He began by paying for early education (preschool, day care, pre-kindergarten and after-school programs); then he expanded programs to include college expenses (full time employees’ college tuition after 5 years of employment, state college tuition for employees’ children after 3 years of employment).

Is it working? The program has paid for 450 college educations, helped boost the high school graduation rate from 45% to nearly 100%, and played a role in lowering the crime rate by 63%. Never one to rest on his laurels, Rosen recently agreed to adopt another underserved community several times the size of Tangelo Park.

It amazes me that more mid- and large-size employers seem reluctant to seize the employee healthcare reins when information on value-based purchasing is readily available. For instance:

• The Leapfrog Group collects, analyzes, and publishes healthcare data on safety, quality, and resource use to help purchasers find high-value care. Employers of any size can use the Leapfrog VBP [value-based purchasing] Program for Self-Insured Entities in their quest for value.
• High-cost claims have become the single fastest growing issue for employers in the last several years. The National Alliance of Healthcare Purchaser Coalitions provides action steps that employers can take to mitigate high-cost claims while improving health outcomes.

My hope is that more U.S. employers will begin to explore similar paths to creating better value in the health plans they provide for their employees. Failing that, we might be forced to clone Harris Rosen.

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