Health+Benefits

Top 5 Healthcare Trends of 2020

Digital brokerage partnerships are reshaping the health insurance market.
By Katie Oberkircher Posted on December 14, 2020

For the first time since the 1960s, national healthcare spending decreased this year. The COVID-driven recession depressed the use of health services and caused people to skip care, leading to closed outpatient facilities and doctors’ offices. The pandemic also drove up hospitalizations, creating the largest financial stress test the U.S. healthcare system has ever encountered. These economic and demand-driven shocks to the system pushed the industry to quicken its rate of transition.

1

Consumer-centered care is on the rise. A majority of Gen Z (61%) and millennials (64%) say they are interested in a benefit their employer currently doesn’t offer, according to the 2020 MetLife Employee Trends Survey. And 69% of employees say having a wider array of benefits would increase loyalty to their employer. Employees have expanding expectations in part because they have more access points to care and benefits, creating a “choose your own adventure” environment.

In an effort to provide personalized benefits options, new consumer-directed plan designs to promote cost control for employees and employers through a simplified benefits experience have emerged. For example, Bind is a broad-network, broad-coverage, no-deductible, transparent health plan. Consumers can adjust their coverage as their needs change, which allows them to be flexible when making decisions about their finances and their healthcare needs.

Clear-cost options like Bind are edging out High Deductible Health Plans (HDHPs) in some cases because employees are looking for certainty and predictability. Employers cannot turn to HDHPs because there’s less room to shift costs onto employees.

2

Emerging broker business models prioritize holistic wellbeing. COVID-19 spurred an elevated focus on mental health support. Clinical and non-clinical engagement tools were sought out because of a host of interconnected factors like workplace safety, work/life balance, stress, and financial uncertainty. 43% of employees who don’t consider themselves financially healthy also said that their mental, social, and physical health is significantly lower than the average person.

The vehicle to promote care of the whole person is in many cases a voluntary benefit paid by the employee. Brokerages have invested in new coverage solutions and partnerships this year, identifying themselves as human capital management advisors and offering options like supplemental health plans with financial, social, emotional and medical components. New plans include prescription drug coverage, onsite medical care, concierge services, commuter benefits, and paid sabbatical programs in an effort to cater to a person’s needs beyond medical care.
To reach today’s workforce and particularly younger generations, brokers are positioning these strategies as lifetime benefits, linking them with an individual entering the workforce and staying with them through retirement.

3

Benefits communication is the primary focus for many employers. Communication has been one of the biggest themes of 2020 as it relates to a movement toward a simplification of the benefits enrollment and utilization process. Four in 10 employees believe their employer does not offer benefits that help them. There is a sizeable gap in holistic wellbeing between employees who understand their benefits and those who do not.

Benefits communication has traditionally been anchored around open enrollment, discussing costs, availability or coverage details. It has not focused on how benefits can work together.

Targeted communication strategies help employees gain awareness of the benefits they have access to and understand how those benefits can support and protect them as they navigate new challenges.

Employers have made investments in virtual employee engagement strategies, while acknowledging demographic gaps and market segmentation. Investments range from digital benefits navigation tools, like HealthJoy, and scheduled touch points with employees where leaders connected staff with wellbeing resources in real-time. During those exchanges, family and mental health specialists were made available to answer questions and provide support.

4

Family benefits have taken on new meaning. Childcare is currently the second biggest concern for employees behind job security. At least one parent is employed in 91.3% of families with children. Without schools or caregivers to rely on consistently during the pandemic, some employees, particularly women, are making the difficult choice to leave the workforce or cut back their hours, despite the long-term damage to their finances and careers. Women are handling 70% of childcare during business hours.
 
Progressive employers have curated geographically-targeted referral, navigation or placement resources to source back-up or full-time childcare. One such solution is Cleo, which creates affordable childcare options for parents through family “co-op” matching or concierge caregiver matching. Member families also receive weekly programs and one-on-one coaching from child development specialists.

5

New partnerships are widening the healthcare ecosystem. The network orchestrator model, a term coined at Wharton emphasizing the importance of leveraging relationships in the digital age, explains how network capital is critical to scaling businesses and increasing value for each participant who joins the network. Under this model, competition exists between networks rather than individual companies. Industries overlap, which creates nontraditional partnerships centered on client solutions rather than information siloes.

In the self-insured market, Verily, an Alphabet company and sister to Google, announced a new subsidiary, Coefficient Insurance Company, backed by Swiss Re. Coefficient is a digital, data-driven health risk solution for self-funded employers to control cost volatility in the employer stop-loss market. The partnership brings together Swiss Re’s risk knowledge, distribution capabilities and reputation in the stop-loss market with Verily’s health devices and tech-driven tools.
 
In the small-group employee benefits market under 50 lives, growth is stemming from digital customer collaborations. Broker-led investments and partnerships include Lockton’s individual market solution Mylo and Bindable, an insurtech that recently built customized white label marketplaces for Mercer’s clients, allowing them to offer auto and homeowners insurance. The platform collaboration allows both companies to reach larger audiences by integrating into each other’s customer experiences. Other new digital brokerage platforms such as Gusto go to market using their integration capabilities, offering a one-stop benefits and payroll shop for small employers.
 
These cross-industry partnerships push incumbents to find new ways to manage risk and create solutions that help clients grow their businesses as well as advance a pay-for-value mentality.

Take a look at what we predicted last year: Top 4 Healthcare Trends to Watch

Katie Oberkircher Director, Market Intelligence & Insights Read More

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