After healthcare reform, who will care about health?

9/28/12

A recent study by the Principal Financial Group revealed that participants in a comprehensive wellness program benefit from that program, and that those who receive individual coaching receive the greatest benefits. The research found that almost all of the over 12,000 participants improved their health risk status. However, among those that received personal coaching 34% moved from high risk to a lower risk category.

This study sparked my interest after the recent HRPA Washington Summit. At that event I heard a number of CHROs advocating for getting their companies out of the health insurance business completely (i.e., pushing their employees into government exchanges) or pushing them into private exchanges where the employees could benefit from the purchasing power of the large company, but that they would take on responsibility for their health insurance premiums. CHROs in favor noted that this will take the health insurance spend off their books and reduce the hassles of dealing with employee complaints about whether or not a particular procedure should have been covered. Thus, CHROs may quickly buy into the idea of a win-win...reduced cost they can show to the business and reduced hassle in their own jobs.

However, Kevin Cox, CHRO at American Express noted a little discussed problem with this, and this should be considered before jumping out of the health insurance space. Programs such as that discussed in the Principal study are implemented by companies because companies have strong incentives to reduce their health insurance spends. If employees are healthier, companies spend less on insurance and thus, companies invest in ways to improve their employees' health. However, once the health insurance spend leaves the company's books, with it goes any incentive for the company to care much about employee wellness (or at least that incentive is reduced significantly).

Thus, if companies get out of the health insurance space, it begs the question: why should they care about health? And if they don't, who is going to care about health? Think that through and the answer might frighten you.