November 30, 2013
I’m proud to share some recognition in the fields of health care business and consumerism.
Modern Healthcare: 2013 Healthcare’s Hottest Companies
The Exchange Solutions segment of Towers Watson, launched with the acquisition of Extend Health, was recognized by Modern Healthcare for being one of the fastest growing health care companies in the U.S. – named 4th among a great group of companies.
Institute for HealthCare Consumerism: 2013 Innovator > See pg 63
I’m honored to be named among some very esteemed industry figures by the Institute for HealthCare Consumerism. See page 63 to learn a little about the early days of Extend Health and what’s it’s meant to my team at work and at home to be in the leading wave of health insurance exchanges in our nation.
November 23, 2013
I spoke with several journals about what the Liazon acquisition means for Towers Watson and the exchange space. This coverage pulls in opinions from across the industry as well as my highlights.
Private Health-Exchange Market Consolidates, David McCann
My highlight: ”Towers Watson has plenty of good reasons for buying Liazon….The market is moving so rapidly, and there’s a sense that a tipping point is being achieved…It’s as if the music just stopped and we grabbed the last chair.”
Towers Watson expands private exchanges with $215M Liazon purchase, Jerry Geisel
My highlight: ”Liazon has “the most sophisticated insurance platform by a mile in this market.”
Towers Watson’s private exchange division leader details advantages of Liazon purchase, Kathleen Koster
My highlight: ”We want to be the leading player in private exchanges….A year and a half ago, they [Towers Watson] bought the leading retiree exchange in Extend Health. Today, they’re buying the leading active exchange technology company, Liazon….The acquisition gives Towers Watson the ability to hit the market very quickly with all the most sophisticated exchange technology out there.”
More on the acquisition
- Towers Watson’s announcement
- Wall Street Journal
- Huffington Post Business
- Bloomberg BusinessWeek
- Daily Finance, Motley Fool
- Insurance Networking News
- Employee Benefit Advisor
- Plan Sponsor
A closer look at Liazon
- New York Times, The Landscape of Small-Business Health Insurance
- FastCompany, This Buffalo Startup Built the Amazon of Health Care Buying
Towers Watson Acquires Liazon to Expand Private Benefit Exchange Offerings Through Multiple Channels
November 22, 2013
Transaction complements Towers Watson’s OneExchange with scalable, flexible solution
NEW YORK, November 22, 2013 — Towers Watson (NYSE, NASDAQ: TW), a global professional services company, announced today that it has acquired Liazon Corporation, a leader in developing and delivering private benefit exchanges for active employees. The acquisition, which follows the purchase of Extend Health in June 2012, solidifies Towers Watson’s strength in the private exchange market through its OneExchange solution. Going forward, Towers Watson will continue to enhance Liazon’s award-winning private exchange solution and serve the needs of Liazon’s leading broker, consultant and carrier partners, some of which offer the Liazon product under their own brands.
I joined a panel of experts on when the ACA will be ready for prime time. To The Point tweeted key comments from each of us, including:
- Bryce Williams, Towers Watson: Hard to penalize Americans for not buying what they can’t easily buy online says @brycewatch
- Juliet Eilperin, Washington Post White House correspondent: WH has stopped giving reporters like @eilperin hard #s about Obamacare web hits
- Jyoti Bansal, AppDynamics: Healthcare.gov glitches partly due to “old legacy systems” from state websites says @appdynamics
- Peter Suderman, Reason magazine: Whopping 7% polled say Obamacare roll-out has gone “quite well” says @petersuderman
- Tayse Haynes, Cabinet for Health and Family Services of Kentucky: One surprising state where Obamacare’s been less rocky: Kentucky. We hear from the health czar.
In the full podcast, you’ll hear comments on these points and more:
- What factors states had to consider in setting up their exchanges
- What could happen with those who get their coverage later due to state exchange glitches
- How options for young people’s coverage could impact state exchanges
- How this launch compares to the roll-out of Medicare Advantage and Part D nearly a decade ago
September 29, 2013
All the attention exchanges have been getting lately comes hand-in-hand with confusion and misconception.
Ever heard of “BushCare,” for example? While the move to private Medicare exchange has been hailed by many as a result of Obamacare, the legislation that paved the way for us to start the nation’s first private Medicare exchange was enacted by President George W. Bush in 2003. That law made the first wave of private exchanges possible and enabled the mass personalization of Medicare benefits for their users.
- Why the notion of exchanges stirs up so much angst
- Some common misconceptions about exchanges
- The different types of private insurance exchanges – for active employees, part-timers/seasonal workers and early retirees, and Medicare-eligible retirees
- The relationship between private and public exchanges
- The analogy between exchanges for retiree health benefits and 401ks for pension benefits
Care episode … bill … outrage – It’s a new pattern emerging in the health care industry that is going to go into overdrive next year as millions more Americans get health insurance.
Case-in-point, here are two recent eye-opening stories on outrageous hospital bills:
- $1,721.75 for treating a scraped knee – with the band aid costing more than the X-ray
- $4,500 for an MRI to assess a child’s tumor that was to have been paid completely out of pocket due to a $6,000 deductible
These come on the heels of a recent report on wild swings in hospital charges, not to mention Steven Brill’s chargemaster exposé earlier this year. My last blog post on transparency also came at a time when disparities in care costs for non-care-related reasons, like geography, were in the headlines.
Peeling back the layers of health care pricing certainly gives health care consumers reason to question costs. But it also has some big implications for employer-sponsored health care – especially given the trend toward account-based health plans in the workplace.
Outrageous health care pricing presents a special hurdle for employers in their quest to optimize health benefits for their employees and retirees.
Skin in the game is an important part of the consumerism concept – as employees use more of their own dollars to pay for health care, they tend to economize – leading to cost-savings for them, for their employer and for the health care system.
However, it’s hard to expect consumers to rationalize their health care usage when out of pocket costs can be so irrational and vary so wildly.
So while the trend toward account-based health plans increases, expect to see more of the care episode–bill–outrage pattern as more employees are hit with a larger share of costs through account-based plans.
This sightline is going to be important to rationalizing costs and care because economizing on care can cut both ways: If it’s not done effectively – for example medications are not taken as often as prescribed or chronic conditions are not managed closely – it could end up harming an individual’s health status and requiring more extensive intervention down the road.
And when such individuals are part of an employer’s overall health benefit population, employers are bound to end up paying more in rising health benefit costs down the road, too.
Offering cost-cutting measures alone doesn’t work without consumerism tools, such as up-front transparent access to the costs of care (i.e., before the bill arrives) and the ability to do apples-to-apples comparisons on health services and products that help employees be responsible health care consumers.
Jeanne Denz, director of Global Benefits for General Mills, said it well at an employee health care conference in New York this March. She shared General Mills’ highly effective health benefits program – one that offers employees innovations and convenience in managing their health along with increasing transparency to the costs of their care. Part of General Mills’ organizational philosophy is that, as it asks employees to take a more active role in managing their care, it should also provide employees with better tools for managing their health and their health care costs.
Exchanges can play a pivotal role in helping support health care consumerism for employees. Exchanges can also help employers optimize their health benefits and give them visibility into how those benefits are working, over time.
Towers Watson has found that consumerism tools are among a host of high-performing health benefit components that have allowed employers to get a handle on costs. These components include self-funding health benefits, high-quality wellness programs, care management for chronic conditions, incentives for positive health behaviors, offering Medicare-eligible retirees plan choice through our Medicare exchange (and other populations as exchanges become viable options for them), and more. Towers Watson’s clients who have performed best on managing health costs have implemented these types of programs.
Health exchanges have a ready-made environment for offering robust data-analysis tools and advice centers. In addition to helping employees and retirees become intelligent purchasers of health care benefits, the most effective exchanges will allow employers to continue to manage employee wellness by providing high-performing health plan features such as coordinated care, chronic disease management, narrow networks and so on, to maximize the value of their health care spend and ensure that they have a healthy and productive workforce.
The move forward into health care’s future is bound to get bumpy and noisy, but that’s not all bad. The bumps and noise may be what’s needed to help bring the rest of the system in line with the new health care consumer’s need for access to data, decision support and fair pricing.
March 18, 2013
When Towers Watson acquired Extend Health last year, there were many unknowns in the health care world: the Supreme Court decision on the Affordable Care Act was still ahead of us, as were the fall elections of 2012. Were we concerned about uncertainty for our companies and those we work with? Of course – but the combination of Extend Health, the nation’s leading Medicare exchange, and Towers Watson, a global leader in professional services, gave us the vision to chart a path into an uncertain future.
OneExchange is the culmination of that vision. It begins a new chapter in our company’s history at the same time that our nation takes a huge turn in its own health care history. Forged in the early winds of the pending reform storm, OneExchange is a single destination that offers many solutions.
As they were a year ago, many employers are looking at ACA’s potential impact on their health care benefits and asking: “What’s the right path?
In answer to this question, I can say two things:
- It’s complicated. You knew that – But did you know that’s a good thing? There are more options now than you, your employees and your retirees have ever had in the past. Some will work better for certain populations than others, but there’s a way to figure that out.
- You don’t have to do this all at once. You don’t have to pull the trigger on a massive set of health benefit changes right now. You can get there one step at a time.
With OneExchange, Towers Watson is using the Extend Health platform to deliver an exchange model that transcends a one-size-fits-all approach. It’s agile in the variation in delivers and nimble in its response to the evolving health care marketplace.
ACA changes things on many levels for employers. The parameters are neither simple nor clear, and the answer will not only be different for each company, it could be different within each company.
Figuring out the impact and how to respond strategically to it means taking into account many factors: how many employees, the hours they work, how much they earn, what benefits they get now, what competitors offer and more.
To increase the difficulty of solving this equation, key market-defining elements like final regs on essential health benefits and the costs of new health plans being designed for 2014 – all mission-critical to driving choice and value for employees on any exchange – are yet to be announced.
Not until these unknowns fill in over the course of 2013 will the value of an exchange become fully known.
Before making health benefits changes, employers should be able to look at scenarios modeled on known conditions. They need knowledgeable advice and insight that lets them make the right decisions at the right time.
That’s why OneExchange’s solutions will be triggered as these market-defining elements come into play. Not before. This will enable employers to leverage the seismic shift that’s just around the corner.
OneExchange gives employers a command central for analyzing and strategizing their health care benefits decisions now – and the advice and solutions they need to chart their course to tomorrow.
Rather than being a year of big, sudden change, we believe that 2013 will be the year that large employers take a good look but not a big leap.
At stake for employers is the trust of their workforce – the ability to recruit and retain employees – as well as sheer operational productivity and their reputation in the eyes of the public – all factors with bottom line impacts.
Fast forward a few years and corporate officers looking back on these next few years will want to be able to say, “We weathered the changes, came out whole and are in a better place. As important – so are our people.” By charting a course via OneExchange, we believe leaders of major employers today will also be able to say, “We did the right thing.”
February 21, 2013
Corrections Appended: February 26, 2013
1. Routine Care, Unforgettable Bills
When Sean Recchi, a 42-year-old from Lancaster, Ohio, was told last March that he had non-Hodgkin’s lymphoma, his wife Stephanie knew she had to get him to MD Anderson Cancer Center in Houston. Stephanie’s father had been treated there 10 years earlier, and she and her family credited the doctors and nurses at MD Anderson with extending his life by at least eight years.
Towers Watson Announces OneExchange for full- and part-time employees and pre-65 and Medicare retirees
January 31, 2013
OneExchange combines the strengths of Extend Health’s exchange platform with Towers Watson’s expertise in health benefit design and strategy.
As part of employers’ health care reform (or ACA) implementations, OneExchange will let employers leverage a single exchange with solutions for some or all of their active and retired employee populations: full-time, part-time, early retirees and Medicare-eligible retirees.
January 30, 2013
The genesis of the Medicare exchange market offers some good insights about what things could look like after the seismic shift that’s coming to the rest of the insurance market in 2014.
The law changes. In 2003, the Bush administration enacted the Medicare Prescription Drug, Improvement and Modernization Act (MMA), creating a thriving market for guaranteed-issue medical and prescription drug plans that could finally be compared head-to-head.
Companies and insurers engage. In 2005, one of the Big Three auto manufacturers challenged Extend Health to get better rates on Medicare plans than it could: In the close radius of the company’s headquarters, it had good enough sway, but having to rent networks in retiree destinations from Florida to Nevada meant its group plan was less efficient than the burgeoning individual Medicare market.
Extend Health built a network of national and regional carriers that offered retirees the same or better individual Medicare coverage at the same or better cost than their former group plan. And at the same time, made the company’s costs predictable and sustainable – no longer driving double-digit rate increases for that employer.
Now Extend Health powers retiree coverage at all of the Big Three and many other auto industry employers along with companies in every sector.
Health care consumers reap the benefits. Six years before MMA was passed, almost half of all retirees from large companies had access to health coverage through their former employers [see EBRI study, Figure 2], but that number took a nosedive due to the skyrocketing costs of offering health care. Six years after MMA was enacted, the number finally leveled off and may even be starting to trend back upward, thanks at least in part to the path offered by private Medicare exchanges.
In today’s fragmented market, individual consumers without an employer to negotiate on their behalf pay the most for health insurance. However, in a guaranteed-issue coverage world (like Medicare today) insurers sharpen their pencils to reach individual consumers through an exchange because it effectively becomes a “super-pool” consisting of everyone within a defined geographic area – providing a critical mass of consumers larger than that of any single employer.
What we’ve seen in the development of the Medicare market gives us reason to believe that a truly agnostic exchange – not a closed single-carrier environment or one that simply switches employers from defined benefit to defined contribution funding – is the practical meeting ground for consumers, employers, insurers and the storm of health care reform changes to come in the next year.
Employers have a lot of big decisions to make about health benefits in 2014. But despite headlines filled with state and federal exchange readiness count-downs, for large employers, many of those decisions don’t have to shake the foundations of their health benefit strategies right away. As employers get ready for the coming seismic shift in health care, their top concern is going to be doing the right thing to meet the needs of their workforces and businesses.
And the right thing is not easy to figure out:
- It depends on regs and health plan options that haven’t been fully defined yet.
- It depends on which employee population they’re looking at, both active and retired.
- It depends not just on the calendar day that exchanges flip the on-switch but more importantly on when certain health care reform changes begin to mature.
I anticipate that, come 2014, employers’ adoption of exchanges for some employee populations could look something like the hockey stick trajectory seen in the 1980s with history of corporate 401(k) adoption: Soon after the law changed in 1978, a handful of employers began a move to the new model, but three years down the road, about half of employers were already offering or thinking of offering a 401(k) and the numbers increased by leaps and bounds in the years after that.
In my next blog post, I’ll be talking more about employers’ needs this year, considerations for how to do the right thing and resources they can turn to for solutions.
- Employment-Based Retiree Health Benefits: Trends in Access and Coverage, 1997‒2010, Employee Benefit Research Institute (EBRI)
- History of 401(k) Plans: An Update, EBRI
- Exchanges Part 1: Everyone wants in, Extend Health blog
- Exchanges Part 2: What to look for and what to look out for, Extend Health blog