In the wake of changing transparency laws, disruptors in the pharmaceutical market, and increasing consternation about how to pay for the rising costs of healthcare, the health insurance market has plenty on its plate.
Employers are becoming more active in their healthcare decisions, patients are demanding higher quality and more convenient care, and legislation is shedding light on the actual costs of services and procedures.
Within that context, D CEO Healthcare sat down with Lockton Dunning Benefits Dallas Office President Steve Idoux, who discussed what he is seeing in the changing world of benefits management, including what is driving the costs, what employers are asking for, and what makes the North Texas Market so unique. Idoux assumed his role in 2021 after serving with the company for 14 years and was most recently executive vice president.
D CEO Healthcare: What are employers looking for right now regarding benefit plans?
Idoux: “Employers are being challenged in many ways and trying to understand what’s driving their costs. They look at it from the lens of needing to save money or find efficiencies and are focused on the employee experience, wanting to do what’s best for their employees and their families. They ask, ‘Can we get our employees the access they need when they need it? At an appropriate setting?’ You are seeing a lot of movement around navigation and specific point solutions. You can focus on certain conditions that you need, like musculoskeletal problems or diabetes. Every plan sponsor payer should be asking for visibility and accountability.”
D CEO Healthcare: What are some potential hazards ahead for the benefits world?
Idoux: “You will see inflation rise to the high single digits and low double digits. Additionally, a lot of these drugs that are in the pipeline that are coming out are incredible for humankind, but they can be a financial burden for that employer and sponsor. Combined, these things are putting on cost pressures. The economy pre-COVID was so hot that many employers didn’t want to make their employment plan a reason for their inability to recruit or retain talent, so no one touched a lot. During COVID, it wasn’t a priority because they were thinking about keeping their doors open or getting people back into the office with hybrid work. A lot of that’s now settled. These cost issues have moved back to the forefront of their priorities, so I think you’re about to see a big focus on cost reduction in 2024-2026. There was much more of an appetite for things that didn’t come out as fast, like direct contracting or other point solutions. We will have change and disruption in the workforce.”
D CEO Healthcare: How are some of these costs being driven?
Idoux: “There used to be the 80-20 rule, but that is no longer what we see. Before, 20 percent of the population drove 80 percent of the cost, but now that has come down to 7 percent of the population driving 80 percent of the healthcare costs. The frequency and severity of claims have increased, and it is not just the million-dollar-plus claims; many of these claims are $50,000 and above. If you drill that down more, .6 percent of claimants drive 40 percent of the cost. Those claims are something that I call the acts of God. No program, point solution, or wellness program in the world will stop it. That’s your premature baby, blood-borne cancer, burn victim, accident, or a very specific drug or condition. You have to transfer that risk in the most appropriate way possible. Often, within the rest of the costly population, there are things you can do to engage them differently and how you’re doing, and that could be programs in place to steer them to the highest-quality, lowest-cost providers through solutions like Surgery Plus with Employer Direct Healthcare. You see that through plan designs. Meanwhile, roughly 20 percent of the population doesn’t have a single claim. They don’t even get a prescription; you want them to do something and not be a ticking time bomb. That’s when you need to look at the data and see if you need to bother some of these people.”
D CEO Healthcare: How is the benefits consultant world changing?
Idoux: “What you want to avoid, but I think people too often do that are in our shoes, is go into the meetings and say we can save you a bunch of money. How do you know that? That’s like a physician prescribing you something without diagnosis first. When we’re trying to get someone to change, you’re selling the invisible. How do you prove we will be smarter, more proactive, responsive, and provide better customer service? But ultimately, what you do is show the way you approach it and how you think, and all of that is based on data. We found that producers who happen to be in new business development are often prototypical salespersons, like the back-slap guy. But now, you have to know your stuff. You have to be able to have conversations and open doors, and these things take time. Oftentimes, how we ultimately win is with data.”
D CEO Healthcare: How are costs changing how networks are built?
Idoux: “What transpired over the last 20 years is that now, everyone’s in every network. But what you have seen now is the development of high-performance networks or narrow networks. Also, every market will be different, so what happens in Dallas and Fort Worth differs from what happens in Houston. It’s a very local thing, and every market is different. We’ve had to make the continued investment in being able to understand those different networks by market.”
D CEO Healthcare: What makes the DFW market unique?
Idoux: “What makes Dallas-Fort Worth unique is that it is competitive from healthcare to law firms, banks, and construction companies. We have several premier administrators, and this market is forward-looking in many ways. This is where the HMO started and where it got incubated. Many things have happened in this market, and it remains balanced. For instance, the Cleveland Clinic dominates their market, basically, but it’s different here.”
Author
