Michael Thompson, the president and CEO of the National Alliance of Healthcare Purchaser Coalitions, sits down with Leigh and Sally to discuss the three things employers and consultants should be focusing on now as they adapt to today’s environment for a thriving workforce. He shares how the nation’s premier purchasing coalition is charging their employer members to think broader, viewing the total health care needed for an employee and solving for it within the benefits plan.
About our guest:
Michael Thompson is the President and CEO of the National Alliance of Healthcare Purchaser Coalitions (National Alliance). The National Alliance is the only nonprofit, purchaser-led organization with a national and regional structure dedicated to driving health, equity, and healthcare value across the country. Collectively, it represents over 45 million Americans, spending over $300 billion annually on healthcare including a broad cross-section of private sector and public sector employers as well as union organizations. Thompson is a nationally recognized thought leader for business health strategies and health system reform.
Prior to joining the National Alliance, Mike was a Principal at PricewaterhouseCoopers (PwC) for 20 years where he worked as an advisor to employers, health plans, providers, and other healthcare stakeholders. Prior to PwC, Mike served as an executive with diverse roles with Prudential Healthcare for over 17 years. Mike is a Fellow of the Society of Actuaries, serving on the Health Practice Council. He is also widely recognized as a leading national advocate for mental health and wellbeing and is a Past President of the New York City chapter of the National Alliance for Mental Illness (NAMI).
The complete transcript from this episode is here:
Welcome to another episode of The Granite List Live. Navigating a sea of benefits solution is daunting at best and new vendors emerge every week. Host Leigh Dill and Sally Pace bring brokers and employers a solid resource when it comes to uncovering what's new, what's needed, and what is happening now to allow for the best plan design possible. By staying on top of trends, brokers and employers can in turn stay on top of spending while improving employee engagement and outcomes. Listen in to this episode today, where they welcome Michael Thompson, President and CEO of the National Alliance of Healthcare Purchaser Coalition.
Leigh Dill (00:48):
I don't envy the massive task you have of keeping all these massive employers operating to the best standard possible in the benefits space. Just in thinking through some of the things you've accomplished, I want to jump right to the success stories. What are some things as you look at, let's talk pre-COVID and post-COVID, some things that you all and that the Alliance has accomplished in helping guide employers through the twists and turns that we've all seen over the past couple of years.
Michael Thompson (01:23):
Running benefit plans, leading health care strategies for major corporations is a really complex job. And it ranges from very strategic decisions around what amounts to the second biggest expenditure of the organization to a thousand moving pieces around health and healthcare that you kind of have to know and navigate and understand on behalf of your employees and their families. And it's one of the most personal things that you do for your employees and their families. And you're trying to manage that and balance that with the budgetary constraints that the company is under and it's challenging for any organization.
Michael Thompson (02:05):
The good news is that employers are very informed on a lot of topics in this area. And what we try to do at the National Alliance is kind of stay ahead of that curve. Actually anticipate where this is heading and trying to educate both our coalitions and their members on how to be relevant in a changing environment. And that can range anywhere from strategies around how to promote high value, better value care to improve the health of that population through various strategies as well.
Michael Thompson (02:44):
Needless to say, COVID turned a lot of things on their heads. The basics didn't change, the objectives didn't change, but the set of facts that we were dealing with changed overnight. One of the amazing things I think we had to do at the National Alliance is pivot with a pace that we've never had to do before. And the sheer volume of information that people needed to stay on top of this and be in front of it for their employees and their families, as well as their management was critical. And I always say we probably put out more information last year than we did in the last four years. And it was because of the complexity of the environment.
Michael Thompson (03:30):
But the basic tackling around health and healthcare, that's a continually evolving area that I'd like to say we help to shape where it's going by educating and staying ahead of the curve. I think most recently with COVID and some of the racial justice movement, we have refocused on issues of equity as well. And that's been a newer area of focus that I think we have gotten ahead of. And that's part of our mission is to stay ahead, to help employers and coalitions navigate and frankly lead the change in the industry.
Sally Pace (04:10):
Can you give us, look in your crystal ball, I know you've got so much information and are so involved in that universe. I feel like years ago it was the larger corporations were moving to that self-insured plan, raising deductibles, they pulled the, what I would call the big levers. And there are lots of smaller levers still out there. And I know you have to fine-tune them just right. Looking ahead, what are you telling your employers? What's next?
Michael Thompson (04:39):
When you look at the trends in the industry, they tend to have a fairly long runway. We stay on those paths for a while and you mentioned a number of them. First it was managed care and then it was consumerism, right? We're going to give people the money and have them share in the cost and that's going to help them navigate the healthcare system better. I frankly think we're at a, another inflection point, a turning point that we can't push any more of the burden on to employees and their families. At least most companies can't, our deductibles and our co-insurance are out of pockets, have outrun what people can afford.
Michael Thompson (05:16):
Our deductibles are probably, I was looking at data the other day that said that in a decade, wages went up 20%, inflation went up 26%, family premiums went up 52%, and deductibles went up 160%. and now deductibles are about give or take four times what the average person can comfortably afford. Which means that if you have any type of material illness, you are jeopardizing people paying their own bill. We can't keep going down that path. And it is going to require us to pivot. And to your point, where do we pivot? Well, we're very strong believers that we need to focus on delivery and payment reform as a starting point. And that will require more delivery-based strategies in our benefit strategies as well.
Michael Thompson (06:07):
And with us, we focus on a few key areas there. We think we need to reinvest in primary care, and we have a big focus on advanced primary care in that regard. We think that episodes of care or centers of excellence probably is the best we can do, particularly in a consolidated market for more specialized and complex care. And we're very, very concerned about high-cost claimants. This is an area that's just exploded, and we are developing strategies in that area because the re-insurance market has not been particularly supportive of mitigating that risk. And we need to develop strategies that, I actually think that's the biggest threat to employer-sponsored coverage is high cost claiming. And it's not because everybody gets one it's the problem is if you do, and the limit on those is just incredible. And increasingly, as you know, they're ongoing and if they're ongoing, you're going to get lasered and you've got a major problem.
Michael Thompson (07:04):
So that's, on the delivery side, we're very focused in those areas. Obviously, a lot of focus on transparency, but transparency alone does not lead the movement to a higher value. But frankly, we also think that as coalitions, as the employer community, we need to be active in the policy arena too, because with the consolidation of the delivery system, what you effectively have is something acting as if it's a market, even though there are monopolies and oligopolies. And they're exercising that market power like never before. And we know that the commercial side, the employers are potentially overpaying, certainly for institutional care. And it's a problem. And we are activated on the policy front.
Michael Thompson (07:51):
On the health front, I would kind of sound more optimistic note not because we got our act together, but I think we're learning more about what matters and how to approach it. I think our early strategies were much more siloed in their nature. We've got a disease management program for this, and we've got a wellness program for that. And we got the whole spectrum, but we really are thinking holistically around the individual. And I think our focus now is educating and promoting what we think are the strategies that have been outperforming these highly siloed approaches. What we're calling total person health, and sometimes whole-person health.
Michael Thompson (08:34):
And it's really recognizing that people don't have one disease. They often have multiple common diseases. That the behavioral health issues are interplayed with the physical health issues. That, and in fact, if you've got both, the cause and the impact are that much greater and there are underlying social needs that are part of that. And so we're moving to much more hyper-personalized experience for employees that really look at them more holistically. And of course, technology can play a major role in doing that and supporting that broader context of total person health.
Michael Thompson (09:12):
If we kind of evolved from kind of wellness to population health, the culture of health, I really think this total person health thinking more with not throwing the rest out, but really taking it to the next generation where it's a much more personalized experience for the individual is what has worked. It's not that this is something that's not out there, it's out there, but this is what has delivered the better result when we look at things more holistically. And frankly, that plays into the discussion around equity, because if you're considering how to support individuals within your population, some people would say well, we treat everybody the same. Well, that's a losing strategy. But the winning strategy is understanding pockets of people within your organization and understanding the experience they have and how to support them given their realities. Essentially, don't leave anybody behind [inaudible 00:00:10:09] man. And that requires more intentionality to look at the data and understand where we go from here.
Sally Pace (10:15):
So are you finding, I mean, that's so much great information there and I do want to kind of dig into a couple of the points that she just made. But talking about all the vendors that are out there in the marketplace and each one kind of has its niche and tackles a specific disease state. How do employers, I mean, it sounds like another question I want to ask is are they taking on the burden or is the caregivers that are taking on the burden of these additional costs if we're not passing it on to the employee? But how does the employer have this personalized approach? Is there a vendor that does it? Is it a nurse advocate that really gets to know their population individualized? And if some of these large employers, that's hard to touch everybody, but what's the answer for that?
Michael Thompson (11:05):
I think it's such a great question. When we think about it, we actually think it's not one thing. It actually applies in different parts of the spectrum, right? So it applies in the primary care office that looks at you holistically. If it's advanced primary care, they're not looking at you with an eye towards the issue you came in from, they're looking at you with more of a longitudinal and a more holistic view on your needs, your behaviors, your outcomes, right. And thinking longer-term how to support you with that lens. Certainly a number of the advocacy services, part of what made their models more successful was their ability to get to know the individual and their family better. And to use that information to get them what they needed. And to prioritize multiple needs in a way that they were sequenced in a way that, sometimes if somebody is depressed, they're not going out jogging anytime soon, right. So let's work on that depression and then let's help them get back out and be more active and eat right, right.
Michael Thompson (12:06):
And it's that people’s first orientation that tends to get that out. Frankly, if I have cancer and you have a program that manages cancer, well, you might need a specialty program that manages cancer. But if they're not looking at the holistic issues around your cancer, including your mental health and other issues, they're missing opportunities. Even the financial management issues around managing your cancer. So all of that ties into a more holistic view of the individual.
Michael Thompson (12:39):
And so, which vendors should pay attention to this? Yes, all of them should. And clearly, there's overlay between your various vendors and there's some synergy. Some of the solutions now are being built with an eye towards comorbidity, an eye towards building in the social determinants and social needs into the assessment. Building in assessment on behavioral health needs into the assessments and then monitoring progress against them. So it's kind of, you will hear people say, we have to take an equity lens to everything. Well, I would agree with that. And I would also say, well, you shouldn't be taking a total person health lens to everything too. Let's think about how does this optimize for people that have complex lives and complex health needs?
Leigh Dill (13:24):
What about, I love the big, I'm going to call them the big three that you've outlined that you're focusing on when it comes to delivery side. And you deal with negative employers and then some mid-large size, all of them have a bevy of consultants across the benefits spectrum that they work with. And that's frankly, a large part of our audience too, is the broker consultant community. So is there any advice you're giving your employers in the National Alliance? Is there any onus on the broker consultant community to help step up and deliver these big three? Where do you see that relationship playing out?
Michael Thompson (14:04):
You probably know that I was 20 years, I was a consultant in the benefits arena as well. So I've lived in that world and I know the complexities of that environment as well. And I know that brokers play a major role, particularly as you go into smaller and mid-sized companies because they rely heavily on intermediaries to support them in, again, this highly complex environment. And oftentimes to bring clout where they don't have it, to just get people to pay attention and do the right thing. And so I value that.
Michael Thompson (14:41):
Where I have become increasingly concerned has been the emergence of business models that kind of calcify advice to employers based on who my quote partner is and who I'm getting this arrangement and that arrangement with. And so when we talk to employers we say, you need to be your own advocates. Yes, you're going to need to rely on advisors, there's no doubt. But go in there with your eyes open and ask the right questions, both in terms of make sure they are thinking about your unique needs and your unique situation. But also, what's their motivation, how are their business models working. It wasn't always that way, but I think increasingly, and it's true, not just with advisors and the brokers, but increasingly with the plans and others that everybody's got a business model that seems to be helping them. But sometimes gets in the way of truly being that. client first advocate. And I think we need to balance that. And I think good brokers and consultants know that, and they go out of their way to really focus on what that client's needs are.
Michael Thompson (15:48):
Yes, there are best practices but one of the things that I struggle with is there's so much innovation in the system that if you partner for too long, you've effectively fallen out of the innovation cycle, right. Because what was hot four years ago is not hot anymore, right. And something else has emerged. I mean, it's such a dynamic marketplace and requires you to kind of stay on your game, continually upgrade your thinking and then educate and advocate for your clients for the best opportunity. And I think in some ways the coalition movement is a parallel universe that educates on a parallel basis. But with far less of a customized lens than a broker or a consultant will typically bring to you.
Leigh Dill (16:35):
I have two things. What I hear you saying, Mike, and I want to make sure I understand correctly. You talked about transparency and that that is an element of a high-performing health plan. But what I also hear you saying is you're encouraging your employers to push back on the broker community for their transparency, i.e, how do you get paid? Where does your compensation come from?
Michael Thompson (16:59):
Transparency's become a, it's more than a nice to have now. The economics of all the intermediaries have evolved dramatically to the point that what you think their business model is, is a minority of their business model. And if that's the case, then you have to take that, you need to understand that as you are working with them and try to be your own advocate. You can't just turn the keys to the car, you have a fiduciary responsibility to the plan, to your employees and their families, to your company. You need to be your own best advocate in that way. The reality is, I don't know of any employer that doesn't trust their broker and consultant or else they wouldn't use them, right. I just hope that trust is warranted. Better that you're aware of what the economics are and you can guard against what can sometimes be.
Michael Thompson (17:56):
My favorite is, for some reason, everybody has their own PBM coalition and they've all got the best deal. It turns out the people who do the evaluation on who has the best deal, always theirs is the best deal. Even if somebody else does it, that theirs is the best. They can't all be the best deal. And it's clear that there are biases in the marketplace. Let's try to be as transparent as possible in that. And again, I think in the long run, a great consultant, a great advisor, a great trusted advisor has earned that trust and will continue to earn that trust and really values being the type of advisor they want to be, which really put the client's needs first. The business model should take care of itself. Unfortunately, people have found it very profitable to create side deals. And I frankly think it's dangerous when your trusted advisor has a vested interest in one solution versus another.
Listen to our next episode, why holistic care matters to employers for the continuation of this conversation with Michael Thompson. Thank you for listening to this episode of The Granite List Live. Access our entire library by visiting your favorite podcast venue or subscribing our site, thegranitelist.live.