Haven Healthcare – An Employee Benefit Advisor’s Perspective

by Bill Kite, Owner, D&S Agency

We were excited when we first heard of the joint venture of Amazon, JP Morgan and Berkshire Hathaway with their combined employee population of 1.2 million to “disrupt” healthcare costs. That excitement was further enhanced knowing leaders such as Dimon, Buffett and Bezos, with their midas touch, could potentially benefit the entire healthcare industry. We were disheartened to read Mr. Greene’s Washington Post article on 1/4/2021. Mr Touissaint’s 1/6/2021 follow up article “Why Haven Healthcare Failed” made some good points. Those of us who work daily in the employee benefit arena know the real reason Haven failed was the fact that healthcare is delivered at the point of care! It is the employees and their dependents that make the most difference by knowing how to manage their health, knowing how to use their benefit plan and ultimately knowing how to be a great consumer is what makes the real difference. Having 57 employees in Boston is not enough “boots on the ground” to effectively manage 1.2 million employees and their dependents.

A very fine full service third party administrator in Charlotte, NC, Healthgram, not only manages plans and processes, but directs clients to use primary care, manage chronic disease and most importantly they use their internal call center/pre-authorization/pre-admission unit to help coach the 15% of their clients that annually have significant claims. Their studies suggest that only 20% of their clients effectively know how to utilize their employer sponsored benefit plans!

Because of cost, employees and their families have to be great healthcare consumers. Employers who have adopted Employee Stock Ownership Plans (ESOPS) promote good management and consumerism to their employees daily. End result, better run companies, resulting in higher employee ownership values.

Healthcare lost consumerism in a number of ways. The United Benefits Advisors Health Plan Survey showed years ago that groups who only communicate benefits through their intranet (electronically) have health claims 6% higher than those employers who hold meetings and teach employees their benefit plans and how best to use them. We all learn differently; the 20% Healthgram number has to be increased. Point of sale pricing has to be better understood. Tamiflu in our market is $200 considering insurance carrier upcharges, dispensing and transaction fees; $39.95 if you pay cash. If you pay $39.95 with a credit card, check or cash it is an after tax expense! Those employees who have built their own Health Savings Account can use the convenience of a debit card and pre-tax contributions to reduce this cost to $25-28. That is consumerism that directly benefits every employee and their family.

Our final point, but there are many more, is that as benefit firms continue to roll up into equity ventures, some of the world class service provided by local employee benefit firms is lost because their new focus is on sales growth. These equity ventures themselves also seem to roll as well every three years and it is not uncommon to see employee turnover just prior to equity valuations. World class service is damaged and, unfortunately, even lost.

As an example, the benefit product we use has access to 300 employees, depending on type of process, to manage 3,000 members. We teach employees how to be better consumers and absolutely coach them when it is their turn to have that major healthcare event. Many of our clients have not had a premium increase in years and saved enough in expenses to offer premium holidays and other incentives.

Healthcare is a management issue, just like running your company or surviving a “pandemic”. The chance that the hundreds of independent healthcare systems, who protect THEIR data, will develop effect transparency is still a far port. Education remains the key and for our two cents shows that it is way more important to help your employees understand than to have 1.2 million employees and their dependents drift aimlessly on the healthcare sea.