Healthcare innovation—a quickly evolving landscape

$3,000,000.  One health plan member, a single treatment designed to alter the progression of neurologic dysfunction by a progressive, irreversible, and fatal ultrarare disease. 

Known as Skysona, this gene therapy treats male children between the ages of 4 -17 with early, active cerebral adrenoleukodystrophy (cALD).  In September, Skysona joined a small list of early approvals by the FDA which will endorse at least 50 gene and cell therapies by 2025, driving a $13 billion market.  Many employers are wondering how their healthcare programs would respond to these new types of treatment and what would be the impact to the rest of their population. 

Innovation that cures disease and provides an enhanced quality of life is remarkable, and a differentiated underpinning of the U.S. healthcare system.  At the same time, in today’s current environment healthcare advances are occurring at a breakneck pace and ensuring accelerated costs for payers.   

We are in the midst of a health affordability and primary-care-access crisis in the United States, which means it’s becoming increasingly more important for those employers sponsoring health plans to take an active role in impact management, while tying employee health to business performance.  In 2021, $4.3 trillion was spent on healthcare across the country— representing more than 18% of U.S. GDP and on pace to reach $6.2 trillion by 2028. 

The majority of our legacy focus remains on restorative healthcare versus proactively driving units of overall health—a culture rooted in physical, emotional, social, and financial wellbeing.  Approximately 50% of medical costs are borne by just 5% of a population, on average, while 50% of a population drives only 3% of total costs.  Yet— unless employers are leveraging data effectively— optics into where health spend is concentrated is veiled.  It’s difficult to combat a problem and evolve without key performance indicators. 

Designing and purchasing employee health benefits has never been more challenging, or more important.  No single strategy or complement of approaches will fit all employers.  New insights into care delivery models, reimbursement strategies, consumer behaviors, social influences of health, and robust venture-capital-backed market entrants are offering novel methods to engage employees and the provider community while making benefit designs more effective.   

Understanding and addressing total health is a critical component of solutions that control costs and improve outcomes.  According to the Kaiser Family Foundation, 40% of a person’s health status is impacted by individual behaviors such as diet, exercise, stress management, and care plan adherence; 30% by genomics and medical history; 20% by social and environmental factors such as home, family, economic stability, and mental wellness; and the smallest segment—10%—is attributable to clinical care. However, this is where we see the largest focus and highest concentration of spending.  

When employers execute effectively, they recognize that employee health, productivity and organizational performance are intricately tethered. Acquiring top talent, helping individuals to stay healthy, and retaining strong teams in a competitive market is paramount—all of which remain a core focus of effective employee benefit programs. 

The Fortune 100 have long understood employee health and engagement as an important production input.  Whether a manufacturer, a financial services firm, a multinational energy company, or a telecommunications giant, forward-thinking organizations leverage culture to create movements—not simply programs.  But the lessons are just as valuable for companies of any size.   

American Express recognized that call-center staff executing on well-being initiatives translated into happier cardholders—when customers “heard” the smiles, felt the culture of health, it forged noticeable ongoing ties.  Dow calls it the Human Element, “Hu,” and reserves its position as the most important component of the chemical companies’ periodic table.  Everything Dow’s human resources staff accomplishes in the benefits ecosystem is centered on the Human Element, treating people as a core asset. 

Perhaps the most interesting, recent example is how Delta Air Lines correlated a specific business performance outcome to its root as an employee health and engagement issue.  Delta learned that its health strategy was driving better employee decisions in high-performing locations, which led to lower costs and better operational KPIs.  The benefits team worked with its health plan vendor to leverage an algorithm, the Health Activation Index™ (HAI), to review 53 health-related decisions made annually.  These included selecting the right setting of care at an appropriate time, use of consumerism tools/apps, etc.  What Delta learned transformed its approach to employee engagement.  At airports with an above-average HAI, customers’ survey responses produced a NPS 21% higher than average locations, employees delivered a 56% higher service recovery, 18% lower global injury rate, 16% lower rate of baggage mishandling, and average disability durations were 4 days shorter.  Additionally, for each five-point increase in HAI, Delta realized a 1% reduction in medical trend.  Targeted investments in health and well-being, when deployed correctly, pay dividends. 

Effective consultants work with clients to curate a leading-edge portfolio of employee benefits—built to empower a healthy, productive, and secure workforce—while enhancing the opportunity to attract and retain desirable talent.  It’s not enough for organizations to simply offer the latest employee benefits product, those firms succeeding in the war for talent build holistic strategies to optimize employee health and wellbeing—engineering an offering focused on keeping employees healthy to work, focused at home, and prepared to retire.  We’re excited to be incubating meaningful change with our client-partners to successfully navigate the challenges ahead. 

Brian Orsinger, CEBS, GBDS, VBS is a Consultant at McConkey Insurance and Benefits. With more than eighteen years of client-facing human capital experience, he has a proven history of designing and implementing health and welfare programs for complex, multi-cultural organizations ranging in size from middle-market to Fortune 500.