The Affordable Care Act: How 15 false beliefs can prevent innovative solutions

Your company may be missing an opportunity to save millions of dollars in healthcare costs by failing to implement innovative, low risk healthcare benefit design solutions.

That’s because there are some very common beliefs that keep HR and C-level leaders from finding solutions to their healthcare benefit problems, and these beliefs are so fundamental to how people think that they are unaware of them.

Many organizations have gotten locked into cycles of increasing costs and disappointed employees, and they respond by doing the same thing –tweaking the same variables — and expecting different results.   This approach can be fatal in today’s healthcare reform environment.  Payers are adapting strategies, policies and coverage plans, providers are creating new and different partnerships, processes and care services, so businesses have to generate (or borrow) innovative solutions to today’s new challenges or be driven to financial ruin.  Rather than just reacting to new regulations, effective companies are finding opportunities and introducing innovative responses.

There are consistent pattens within the groups that fail to generate or consider alternative solutions to healthcare benefits challenges.  Working with decision makers has led me to identify 15 common assumptions that block innovative thinking.   The first four are mistaken beliefs about healthcare in general.

 1.    We have to fix this mess.    

Health care benefit professionals doom their own thinking by approaching the problem too broadly.  Yes, US healthcare probably is too big and complex for you to fix, but you don’t have to fix the whole thing!  Think smaller!  Ask yourself  “Given this company in this context, what are some of the things that we can do to provide great care at affordable prices?   How can we manage care and costs?”  Turn off the “healthcare is doomed” media and think smaller and locally.  Think selfishly of only your organization and forget the rest of society, take care of your own.   Fully understand your own company’s situation, define what you want your corporate culture to be, decide how your benefits strategy can impact that and generate as many ideas as you can to get there.

 2.    There are no good solutions, only least bad options

Highly tenured benefit professionals are especially guilty of this belief.  They  have worked in the business for so long and settled for the least bad option so often that they have given up believing that there are actually good solutions to be found.  After years and years of defensively raising deductibles and co-pays, adjusting coinsurance levels, increasing maximum out-of-pocket limits and other methods of cost shifting to achieve the smallest possible increase in premiums – that they have stopped looking for other ways to fix the problem.   In Psychology the term “learned helplessness” refers to the trained belief, after long exposure to only aversive outcomes, that any (all) behavioral choices will lead to unpleasant results.  It’s the belief that the action really doesn’t matter because it’ll turn out bad anyway!  Unfortunately, this pessimistic view is quite common when dealing with healthcare decision makers.

 3.    We should wait until this gets clearer or things settles down.

You cannot wait for things to become better defined or settle down.  This is the new normal of healthcare benefit design…like it or not, it’s extremely unlikely that things will settle down.  You must have or know people who understand PPACA past, present and future and intimately understand what your company is trying to accomplish with its benefits.  (See my earlier blog about the importance of establishing clear objectives and success criteria for your benefits).  Due to healthcare reform (and other factors) today’s  business environment is turbulent and uncertain, yet decisions must be made before any more settling or clarity emerges.  Work with experts, get up to date information, and know that some decisions will have to be made despite the uncertainties, unknowns and undefined terms!

 4.    SSDD:   Same Stuff Different Day. 

If your company is approaching healthcare benefit design in the same way it always has…if you think you’ve been here before…think again.  There are new variables, new players, new rules, new requirements, new options, new everything.  This is not the same problem solving decision-making situation you’ve faced before, so the same solutions won’t fix this new challenge.  It’s time to think differently.

 What’s next?

Next up in my blog I’ll address  how benefits decision makers approach the problem solving process.  SPOILER ALERT: most companies make the very important, very costly healthcare benefits decision in surprisingly undisciplined, haphazard ways.

Then, after reviewing the 15 common mistakes that badly damage how companies make their healthcare benefit decisions,  I’ll offer a few simple, inexpensive methods that can save companies millions of dollars in unnecessary healthcare spending!



Health Care Reformophobia: Illness and Cure

I don’t think “Reformophobia” is a real word and as far as I know “Health Care Reformophobia” is not a real affliction.  But it may be one soon because there has been a lot of fear and anxiety caused by health care reform especially for business owners, leaders and HR personnel.

Typically a phobia is defined as a persistent irrational excessive anxiety associated with a specific object or situation.  But people experiencing reformophobia might argue that the reactions are neither irrational nor excessive.  In fact, the combination of factors associated with the Affordable Care Act create a perfect storm for stress and anxiety:

  • exceptional complexity buried in more than 2,000 pages of hard to read legislation
  • a likely increase in costs for businesses
  • seemingly ambiguous terms, many of which have yet to be clearly defined
  • unique exceptions, situations, factors and considerations that may not have been foreseen by lawmakers
  • shifting deadlines and milestones
  • mandates, changes and requirements that will continue until 2018
  • potentially high penalties for errors
  • rumors of increased auditing by the federal government

A common defense against a true phobia is to reduce or remove the stress by entirely avoiding the anxiety-producing situation or object, or denying its existence.  For healthcare reform this might’ve been an understandable strategy last summer when we were all waiting for the Supreme Court to decide on the fate of the bill.  It may even have been an acceptable strategy until the November election to see if we’d have a new administration that would repeal the mandates.  But it is clearly not what you should be doing now.

Here’s the good news: There are specific steps that you can take to reduce the anxiety enough to move your organization from catatonic paralysis to decision-making and action.

First reduce any vagueness that exists on your side of the equation.  You won’t be able to make smart healthcare benefit choices if you have not explicitly defined your values, people strategy, your compensation philosophy and what kind of culture you’re trying to achieve. What specifically are you trying to achieve with your pay and your benefits?  Does the talent market require that you aggressively recruit or retain talent – or is there a lot of talent from which to choose?   Do your offer other benefits that can reduce the importance of the direct pay component?  What is the average age of your workforce and what matters to each group?  Do you want to be a leader in benefits or do you differentiate yourself as an employer in some other way?  What do you offer: quality work life, a family friendly environment, a fun workplace, great experience?  Define how you want to compete for talent, what your beliefs are about your people, what you hope to accomplish and what comp and benefits strategy makes sense for you. Only after answering these questions can you make decisions about what course of action to pursue for your organization.

Rely on trusted advisors.  You don’t have to know everything if you have experts working on your behalf.  Demand more from advisors (internal and external). This does not mean you need to hire additional consultants.  If you have agent / brokers – they should be culling information for you and working side by side, not just dropping in semi-annually or occasionally forwarding ACA emails from others.   The once a year meeting to market your plan, raise deductibles, tweek out of pocket maximums and creatively cost shift are over.  Find a good partner(s) with current ideas and cutting edge solutions, get constant relevant updates and pursue every possible healthcare solution.  Think both short term and long term.  Demand that your advisors bring you the best tools, aids, timeframes and current accurate information.  If you don’t understand something, ask the experts.  Healthcare benefits are now like corporate law, high level banking or other areas where you cannot be expected to know it all, but you need trustworthy professional partners to whom you can turn for help and advice.

Once you have aligned your vision, values, and talent management strategy and you have a healthcare partner who understands what you’re trying to do, you need to focus your attention and that of others on what you know for sure.  Yes, some things have not yet been completely defined, there are still rumors swirling around about certain decisions, and some (many) things you may have no power to influence. The uncertainty and anxiety has led many to a paralyzed “wait and see” attitude.  But many important decisions are made on the basis of insufficient data.  While your competitors are wringing their hands and waiting for certainty, you can be miles ahead.  Define what you know and what you control.   There is much more known than not known.  Act on only those items that are in your control and make sure that you’re not dedicating time or resources to the things that are out of your control. If you can calm the healthcare waters for your organization, and quickly and efficiently make decisions that fit your overall goals – your employees can get back to the work you hired them to do.

Finally, while the perfect storm of anxiety may lead others to either inaction or to making frantic ill-advised choices, you should follow a structured decision making process to make smart strategic decisions for your organization.  There are half a dozen good problem solving decision making processes, find one you like and apply it to a small group of informed company leaders.  By carefully following a formal group problem solving process, you are more likely to avoid many of the mistakes that can impede effective decision making.

Your prescription for Reformophobia:

  1. Don’t avoid the issue, address the challenge head on.  Leaders are most needed in challenging times and these are challenging times, so step up and lead.
  2. Review, define or re-define the company’s vision, philosophy and goals.  It’s easier to choose a course of action when you determine what you want to achieve and align these solutions to help you achieve that vision.  (If you don’t know what you stand for you’ll fall for anything.)
  3. Rely on trusted experts: Get reliable tools and reliable sources of help and information.  Current and accurate information is invaluable during periods of uncertainty and change.
  4. Help others focus.  Define what you currently know for sure as well as what you know about the proposed changes and requirements that are coming in the next few years.  Define those things that are in your control and focus your resources on what you know you can impact. Re-assure others that the challenge is under control in your company.
  5. Use a structured problem solving / decision making process.  Frame the problem or challenge you’re trying to resolve, define the parameters, question the assumptions, demand and analyze the right data, research and generate as many options and solutions as possible, test a few, select your best option(s) and implement.

These are good fundamental steps to deal with any major issues in your company.  In this context, these basics will help you reduce any healthcare reformophobia that may be paralyzing your organization.