robharkins

For highlights of my perspective in articles and blogs, see my comments on LinkedIn and Twitter.

This post is part of our Exchange Innovator Series featuring leading private exchange, health care reform and Medicare experts from Willis Towers Watson. See John Barkett and Sherri Bockhorst.

I’m Rob Harkins, private exchange practice leader for mid-market employers, for Willis Towers Watson’s private exchange business sector.

As part of the Health and Benefits segment, it’s my mission to ensure satisfaction internally, as well as externally, with our leading mid-market clients, accessing a modernized technological approach to benefit delivery, whether their need is individual Medicare, pre-65 retiree benefits, or group coverage.

I’ve been heavily involved during the merger of Willis and Towers Watson, enhancing the transition and acting as a bridge between our Health & Benefits consulting group and our base of mid-market employers, with populations ranging from the hundreds to the tens of thousands.

My health insurance roots

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Baltimore with my wife and friends

I cut my teeth on exchanges at Extend Health – a start-up that was acquired by Towers Watson in 2012. Having worked on Medicare Advantage with a focus on state and public sector employers, I was a steward for our channel partner relationships between consultants that wanted to provide a private Medicare exchange to their clients, including Towers Watson and Willis. I eventually moved from Extend Health to become the exchange practice leader at Willis. Collaborating with Liazon, I developed the Willis private exchange platform. In the process, I kicked the tires on every private exchange in the market in order to create something that would deliver true value to our employer clients and their employees.My education was in health care administration, which provided a terrific springboard for my career. I’ve worked in a range of companies, from start-ups to major national health insurance carriers, and this breadth of experience helped me to develop products and solutions that synched with innovation in the health care space.

 

My attention and focus is always drawn to what we can do operationally to innovate with technology and engage employees. I’ve always been the change agent. My true passion is looking at what is on the horizon and integrating the very best components of the past, present and the future into one integrated vision. One of my strengths is getting employers to understand how and when change can be beneficial. I believe in identifying various opportunities that can bring clients value, and then helping them get there by painting that picture for them.

Where I see health insurance going

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I love the outdoors and hiking

One of the top reasons employers are now turning to private exchanges is the changing workforce.

A digitally savvy younger workforce does not want to access benefits from an antiquated system. They just don’t. No one wants to get into a car and wind down a window or push a button to lock a door. Health exchanges are to benefit delivery what the smartphone has been to the telephone.

The benefits world moves very slowly, especially when it comes to employers who have a very paternalistic approach to employees. But how can we continue to deliver on paper or in a clunky benefit administration system that has to rival the ease with which we can buy cars? The system has to be very sophisticated.

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Very proud of my big family

Private exchanges are bringing benefits into the 21st century—with access and choice. Ten years from now, everyone will be using exchanges, because the way it was done yesterday just can’t continue. Once you change technology, there’s no going back. The dial-up phone is gone.

I believe that there will be gradual embracing of all the components that are part and parcel of the technology enhancements exchanges bring.

We all learned how to shop online—no one gave us a training manual. We all figured it out, and our culture changed around the technology, and the technology was very agile and responsive. And that’s what the exchange platform is: It’s a new way of doing things.

To reach me for comment on an article or a presentation, contact Melanie Meharchand, Director of PR and Social Media for Exchange Solutions, Willis Towers Watson.

 

Despite efforts to establish quality metrics for health care and empowering health care consumers to choose elements of their own coverage, recent findings still show that people shop primarily around cost. This is according to an analysis by the U.S. Department of Health and Human Services (HHS), covered in a recent article in the New York Times.

According to the HHS analysis of buying trends in the public health insurance marketplace, two-thirds of people went for the lowest- or second-lowest-priced plans for the plan year 2015. For the plan year 2016, approximately half of people chose the cheapest plans.

According to health economist Austin Frakt in a different article in the New York Times, choosing a health plan based on premium price alone may be problematic because it leaves out other aspects of choosing care, such as the cost of the deductible. Other aspects of care, such as quality of care and number of doctors in the area, are also left out when only cost is considered.

This is where employers can step in. With clear and regular communication, and simple benefit tools, employers can help employees make the the best health care decisions possible given their health status and budgets.

To read the entire article in the New York Times, click here.

With the 2016 primary season coming to an end, and candidates at all levels turning their attention to the general election, the Affordable Care Act (ACA) will remain a topic of much debate. Some candidates want to see it repealed; others want to keep it and improve upon it.

But according to John Barkett, director of policy affairs for Willis Towers Watson, here’s something that all candidates might want to consider. While most employers had concerns about the ACA, six years have passed since the bill was signed into law. At this point, many employers are not willing to take the risk and endure the added disruption of throwing it out and starting all over again. However, they do want to see major changes to the ACA.

In a recent bylined article in Employee Benefit News (EBN), Barkett shared the five things employers would change about the ACA, based on his numerous conversations with employers about the good, the bad and the ugly of adapting to this major piece of legislation and the changes it has brought to employer-sponsored health care.

What would you change about the ACA?

To read Barkett’s article in EBN, click here.

Enrollees in health plans on public exchanges are “underreporting” that they are smokers to avoid a tobacco surcharge being levied on their plans. This is bad news for all public exchange participants, including non-smokers. The tobacco surcharge–estimated to be 10% on average in 2014–is meant to offset the high cost of diseases associated with smoking such as lung cancer.

Unfortunately, the current system does not have the ability to verify if someone who claims to be a non-smoker is telling the truth. Said Jeff Levin-Scherz, senior consultant for Willis Towers Watson, “Enforcement typically relies on the honor system.”

The same is true for employer-sponsored insurance as well, although not all companies rely exclusively on the honor system. According to Levin-Scherz, some companies require lab tests for employees, which can help them identify smokers. In 2015, about 40% of large employers had a tobacco surcharge.

Even when smokers do self-report, it’s not clear that the surcharges are effective at getting smokers to quit, which would be better for their health and for reducing health care spending generally. According to the American Lung Association, while the surcharges may help offset the cost of smoking-related diseases, such punitive measures “have not been proven effective in encouraging smokers to quit or reducing tobacco use.”

Wellness programs that include smoking cessation may be a better alternative to punitive measures like tobacco surcharges.

For the complete article in USA Today, click here.

Over the next four years, 78% of employers anticipate making moderate to significant changes to their health plan design and vendor strategies. The goal of these changes is to keep cost increases at the current level, 4%, which was the smallest increase in 15 years (but still twice the Consumer Price Index).

These are the findings of the Willis Towers Watson 2016 Emerging Trends in Health Care Survey, which surveyed 467 large employers, collectively representing 12.1 million employees.

The survey also found that while new requirements under the Affordable Care Act have been a source of concern generally, 70% of employers said the recent two-year delay of the Cadillac tax has had a small or even negligible impact on their health care strategies for next year.

Some strategies employers are adopting to manage cost increases include adopting telemedicine, centers of excellence, high performance provider networks, onsite or near-site health centers, and technology to improve employee engagement.

To read more on plans employers have for managing health care costs, click here.

2015 is almost over, and it was another eventful year in health care. The most read blog posts on the OneExchange blog show the range of interests among readers of this blog.

Taken together, our series on Towers Watson exchange solutions leaders topped your list, with a post on the rise of account based health plans ranking a strong second. How employees are under-utilizing Employer Assistance Programs (EAPs) also landed near the top of the list.

A bit further down, the U.S. Supreme Court’s historic 6-3 decision in the case of King v. Burwell captured your attention. The decision reaffirmed allowing subsidies on both state and federal exchanges, ensuring that a key provision of the Affordable Care Act (ACA) — one that is largely responsible for the gains in insuring the uninsured — would remain in place. Director of Policy Affairs for Towers Watson’s Exchange Solutions, John Barkett, explained the case’s implications in our blog post on the topic.

You also were interested in public sector adoption of private retiree exchanges, as evidenced by the popularity of posts on the Ohio Public Employees Retirement System OPERS and Alameda County in California announcements that they were transitioning their retirees to OneExchange. Towers Watson’s acquisition of Acclaris, a provider of software-as-a-service (SaaS)-based technology and services for consumer-driven health plan and reimbursement accounts, also garnered interest as did the news that Towers Watson was a founding member of the Association of Web-Based Health Insurance Brokers (AWHIB), formed to advocate for policies that would enhance the efficiency of web-based brokers when they enroll people in public exchange insurance plans.

2016 will be another busy year for health care, especially as the U.S. elects a new president. Aside from this major event, next year’s hot topics remain to be seen.

Happy Holidays and Happy New Year!

Recent research from The Commonwealth Fund, a private foundation that aims to promote a high-performing health care system, explored how the ACA’s reforms of the individual health insurance market are working. Researchers compared the cost of subsidized plans offered on public exchanges with non-subsidized plans available off exchanges to determine the validity of early concerns that lower risk customers would prefer off-exchange plans. If that were to happen, the number of individuals needing government subsidies and subsidy amounts for plans on exchanges would increase — thwarting the ACA’s goal of offering good coverage at relatively low prices on public exchanges.

In fact, just the opposite has proven to be true. Richer plans that typically appeal to people with health problems make up a greater proportion of plans sold off exchanges than on them. According to the researchers, this means that the ACA’s provisions that discourage this type of risk segmentation are working.

Premium increases tell the story

To make this determination, researchers looked at 2015 premium increases, based on insurers’ federal filings for ACA-compliant plans both on and off exchanges. They found that the average premium for plans in the individual market increased $30 per person per month overall, with the average premium for plans purchased off exchanges ($34) higher than for on-exchange plans ($29). The reason for this premium increase differential has to do with the different preferences of purchasers, such as access to specific doctors or hospitals, which are met by plans bought directly from carriers compared with plans purchased on the public exchanges.

With the ACA, all plans are “guaranteed issue,” which means no one can be denied coverage because of preexisting conditions. This is great news for individuals who might have been denied coverage in the past due to an existing illness or chronic condition. However, the cost to the carriers of accepting everyone is higher.

On public exchanges, the higher cost is mitigated by restricting the doctors and other medical service providers that are considered “in-network,” a practice known as narrow networks. Off-exchange plans, which are offered directly by carriers, are not similarly constrained, giving purchasers access to a wider range of service providers — an appealing feature to people with existing health problems and established relationships with doctors and other providers.

The complete report is available from The Commonwealth Fund’s website.

One of the more controversial provisions of the Affordable Care Act (ACA), the excise tax on high-value health plans, goes into effect in 2018, and many employers are already making changes to the health plans they offer to avoid it. Among the changes are implementing narrow networks, transitioning to high-deductible health plans, and incentivizing participation in wellness programs that improve health and could reduce the incidence of chronic illness down the line.

With the open enrollment period for the 2016 plan year well underway, Sandy Ageloff, West Division leader of Towers Watson’s health and group benefits practice, underscored the importance of employers informing their employees of current and planned changes and what they mean.

In an article by Shelby Livingston of Business Insurance, Ageloff counseled employers to be sure that “employees are paying attention and understand the magnitude of change that might be happening in their employer’s benefit plan this year.”

To read the complete article in Business Insurance, click here.

Employers expect a 4.1% rate of increase in the cost of employer-sponsored health care benefits in 2015 – the lowest in 15 years but well above inflation — according to an annual survey by global professional services company Towers Watson (NASDAQ: TW) and the National Business Group on Health (NBGH), an association of large employers.

Nervertheless, the survey found that employers are more committed to providing some form of health care coverage to employees over the next 10 years than they have been in recent years. Employer confidence in offering health care coverage 10 years from now has nearly doubled to 44% today from 25% in 2014.

“Against the backdrop of sluggish economic growth and low inflation – which limits the degree to which companies can raise prices on goods and services – employers continue to aggressively manage their health benefit plans to rein in costs,” said Randall K. Abbott, a North American leader and senior strategist in Towers Watson’s Health and Group Benefits practice. “By and large, employers have done a good job managing costs in recent years. Despite this success, the ACA’s excise tax looms ahead in 2018, and 4 out of 5 employers now identify changes to health and pharmacy plan designs as their most important strategic priority.”

For more information about what additional actions employers are considering to manage costs, and additional survey findings, read the entire press release here.

It might seem counterintuitive, but there are ways employers can cut costs that result in better quality. This is according to Randy Abbott, a leader and senior strategist in Towers Watson’s North American Health and Group Benefits practice.

Abbott notes that most employers want to achieve better patient outcomes at a lower cost per patient. He points to two value-based strategies as examples of especially effective pathways for getting there:

  1. Employers can build and “curate” medical service provider networks that leverage all available delivery channels to ensure that care is being provided appropriately and affordably.
  1. Employers can add value-based contracting to traditional fee-for-service reimbursement arrangements, which requires providers to focus on outcomes and not just cost.

Three trends make pursuing these strategies appealing:

Consolidation among health care providers. Consolidation typically results in higher prices because it eliminates competition. However, consolidation among health care providers creates the potential of upside economic advantage for all parties. That’s because larger providers can leverage capital expenses over a larger community while patients and their sponsoring employers benefit from care being delivered in optimal venues.

Physician shortage opens up new channels for delivery. A shortage of primary care physicians is being mitigated in several ways. These include telemedicine, smartphone-based health applications – which can enable remote monitoring of chronic conditions, among other activities – and empowering other health care professionals to assume some of the activities that have been reserved for physicians.

Health reform shifting focus to outcomes. By challenging providers to deliver more than a good price, the Patient Protection and Affordable Care Act has changed the way reimbursement works — forcing providers to manage quality, efficiency and outcomes in addition to cost.

In a recent article on this topic in IndustryWeek, Abbott wrote, “Consolidation of health care providers, the emergence of new channels for accessing health care, and the addition of payment systems that reward outcomes create the ability for employers to develop curated networks and integrate numerous payment models to achieve optimal value. These are strategies that all employers seeking quality at a lower cost should consider.”

To read the entire article, which goes into more detail on these opportunities for employer, visit IndustryWeek.com.