Regulations are holding up access to high-value healthcare
In a true free market, most consumers will naturally seek out lower cost, higher quality products and services. There are numerous reasons why that has not been the case in healthcare. They include the lack of price and quality transparency, complexity of navigating care, consolidation of provider markets and regulations that prevent the alignment of the incentives to drive free-market decisions.
Thankfully, there is a growing group of employers trying to improve access to affordable healthcare for employees and their families. Instead of working within the status quo, which has resulted in lower wages and higher healthcare costs, these employers have taken steps to innovate their benefit plan designs, identify or create high-value care solutions and reward high-value healthcare providers.
These strategies have been so effective that employers are able to offer high-value healthcare services at low or no cost to their employees, which perpetuates cost-saving opportunities. This is a winning formula for all key stakeholders: employees and their families, employers and providers who deliver high-value healthcare.
We know that health savings accounts (HSAs) paired with high-deductible plans provide a good balance of incentives that are critical to a functioning free-market system, and most midsize to large employers offer these today. Unfortunately, current federal HSA rules are an obstacle to making high-value healthcare free or affordable to employees.
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Under current regulations, only a limited set of preventive care services and certain prescription drugs for individuals with chronic conditions may be provided on a low-cost or no-cost basis without jeopardizing an enrollee’s ability to make or receive tax-free contributions to an HSA. This even applies to services provided by employer-sponsored on-site or near-site clinics. While the federal government recently extended some COVID-related flexibilities for telehealth, but it did so only for a limited time and didn’t apply these flexibilities to care delivered in employer-based clinics.
The challenge has been how to align incentives and empower employees to choose high-value care when HSA rules are still too rigid to give employers the flexibility they need and t is virtually impossible for the average consumer to identify and navigate to high-value care without support.
The first problem must be addressed by the federal government, either through legislation or a relaxation of current HSA rules to give employers the flexibility they need to offer high-value healthcare for low or no cost to employees.
At a minimum, changes to HSA rules should include:
Giving employers the ability to cover employer-owned clinic services and other high-value alternative sources of healthcare before deductibles are met without jeopardizing the tax-favored status of employees’ HSA contributions.Making the relaxation of the rules around telehealth for primary care, behavioral healthcare and similar services permanent, and allowing plans to offer these at first-dollar coverage or with little cost sharing; Giving employers the flexibility to adjust out-of-pocket costs for higher cost services, medications and chronic disease management services when employees are enrolled in a value-based insurance design plan paired with an evidence-based high-value network.
These recommendations will advance the primary goal of HSAs, which is to give consumers a financial stake in healthcare decision-making. We are not suggesting that enrollees be shielded from meeting their deductibles when they choose lower-value healthcare. We only suggest that when employers can identify a significant variation in cost for similar quality services, or secure a lower-cost arrangement for high-quality healthcare, that they be given the flexibility and leeway necessary to guide enrollees to that care.
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The second challenge — the difficulty of navigating care — may be addressed by employers that have the desire and budget to create their own high-value healthcare options for employees. This is primarily happening through employer-owned or otherwise independent on-site or near-site clinics that provide comprehensive primary care to patients.
We call this advanced primary care, but some employer clinics are going even further by bringing in other services such as imaging, behavioral health services and chiropractic care. The addition of services depends on what opportunities exist within an employer’s workforce.
Employers also can create high-value care options by partnering with organizations that have the data and analytical capabilities to identify nearby physicians, specialists and outpatient clinics that deliver care with excellent outcomes at reasonable prices, or have the data and capabilities to build high-value care networks. Employers that have on-site or near-site clinics provide this information to their clinic providers who are then empowered to make informed referrals to care outside the clinic.
Imagine how different healthcare would be if everyone had a primary care physician empowered with information about where to refer to get the best outcomes at the lowest prices, regardless of system affiliation. Imagine the free market working to encourage higher cost providers to lower their prices or encouraging providers with poorer outcomes to improve by adopting best practices.
This is the promise of free market healthcare. The federal government should continue working on a bipartisan basis, and employers should continue to innovate to help us get there.
