U.S. Health Care Is in Flux. Here’s What Employers Should Do.
The coronavirus pandemic has brought uncertainty in many areas of day-to-day lives and is now bringing uncertainty into health care. Read this blog post to learn more.
Emergencies naturally draw our attention — and our resources — to the present. The U.S. response to Covid-19 is no exception. Yet the problems exposed by the pandemic point to the urgent need to prepare now for the next waves of this crisis, including new clusters of infection and new crises of debt and scarcity. They also highlight the opportunity to develop a more resilient health system for the future. Employers can and should play a central role in this effort.
For employers, this period of exceptional economic strain has exacerbated the longstanding challenges of managing the health care costs of their employees. The future course of the disease and economy may be uncertain. But businesses that are rigorous in the way they purchase health care benefits, leverage digital health technologies, and partner with hospitals and physicians will be able to better manage an expected roller coaster in health care costs and premiums.
Dealing with Covid-19 itself is expensive: Covered California estimated that the costs to test, treat, and care for Covid-19 patients this year will be between $34 billion and $251 billion; America’s Health Insurance Plans predicts the cost will total $56 billion to $556 billion over a two-year period. Yet the total costs of U.S. health care this year will likely drop due to the postponement or cancellation of regular clinical services and elective procedures due to the virus. According to one estimate, Americans may spend anywhere from $75 billion to $575 billion less than expected on health care this year. Another actuarial firm projects that self-insured employers may see a 4% reduction in their employees’ health costs this year.
Nonetheless, health insurance premiums for employers are expected to rise in 2021. An analysis by Covered California projected that nationally, premiums will increase between 4% and 40% — and possibly more. Recent filings with the District of Columbia’s Department of Insurance, Securities and Banking related to the individual market and small groups for 2021 show that Aetna filed for an average increase of 7.4% for health maintenance organization (HMO) plans and 38% for preferred provider organization (PPO) plans, while UnitedHealth proposed an average increase of 17.4% for its two HMOs and 11.4% for its PPO plans.
What explains this projection of higher premiums in 2021? Will second and third waves of Covid-19 lead to more expensive intensive-care unit and hospital stays? Will patients flood clinics for the hip replacements, cataract operations, and other “non-urgent” services they delayed during the lockdown? Will hospitals try to charge commercial insurers more to compensate for their losses in 2020?
The answer to all these questions is a definite “maybe.” Ironically, the fundamental reason rates are expected to rise is the cost of uncertainty itself. And the situation may only get murkier if the pandemic resurges.
Even if premiums stay as they are, employers may still be unable to afford them amid plummeting revenues. Before Covid-19, premiums for employer-sponsored plans had been consistently outpacing inflation. In 2019, the Kaiser Family Foundation reported that the average annual premium for employer-sponsored health insurance was a whopping $20,576 for a family of four (and $7,188 for an individual) — a 54% increase over the previous 10 years. That dwarfs the average inflation-adjusted increase of 4% in wages in the same 10-year period from 2009 to 2019.
Given these rising costs, employers should look beyond 2021. They should not seek a short-term fix by raising copayments, deductibles, and other out-of-pocket costs for next year. While this strategy may initially reduce spending on health care, studies show that it will disincentivize employees to seek preventative treatment. In fact, families with higher deductibles are less likely to take their children to see the doctor, even when the visit is free. Over time, this leads to worse health outcomes for employees and their families, which also means much higher costs.
Here are three strategies that can help employers weather the inevitable ups and downs of 2021 and beyond and improve employee health:
1. Manage health care benefits like all other purchases.
Business leaders, especially the CEO, need to make it a priority to understand the health care benefits business. Employee health benefits consume more than $15 million annually per 1,000 employees, and employers should treat costs with the same rigor and expertise that they assess other major expenses. Whether it’s through their broker, insurance company, or consultants, businesses should examine these costs closely and understand where they are deviating from benchmarks and why. A car manufacturer should not overpay for care anymore than it overpays for steel.
For example, when employees experience a common ailment like uncomplicated back pain, do their doctors tend to order MRI and back surgery, driving up costs unnecessarily in an overeager fee-for-service model of treatment? Or do they follow more cost-efficient, preventative guidelines that lead with rest and physical therapy?
By challenging providers with these types of questions, large employers such as Walmart and Boeing have redesigned their employee benefits plans to encourage employees to seek second opinions and have even gone so far as to allow them to expense travel to medical centers that offer better care at lower costs. Employers may also find that forming alliances or joining cooperatives can expand the scale of their data, help them identify and exploit opportunities for improving the quality and cost of treating specific conditions, and enhance their purchasing power for health care.
2. Leverage technology.
The Covid-19 pandemic will open unprecedented opportunities for employers to leverage technology that helps employees seek, manage, and receive health care over the internet. During the emergency, public and private insurers lifted provider restrictions on telehealth, and the increasing willingness of both clinicians and patients to use digital technologies is changing the landscape of health care, especially for those who have chronic conditions that require ongoing monitoring. Given that Medicare is likely to sustain these changes, employers should work with their private insurance partners to ensure continued coverage of telehealth for their employees.
Virtual chronic care solutions are also gaining traction. Take people with type 2 diabetes, who now comprise about 10% of all Americans and whose care costs more than $325 million per year. Technologies like a Bluetooth-enabled continuous glucose monitor (CGM) obviate the need for daily finger pricks and glucometer checks for monitoring blood sugars. (Verily, the company I work for, is developing a next-generation CGM with Dexcom.) This technology, when paired with a smartphone app that records meals (a quick photo of the food is sufficient), exercise, and medications, can help individuals understand the impact of their actions on their health. Onduo, a digital health company managed by Verily, combines this technology with telehealth and chat features to connect employees to health coaches and physicians. It offers a virtual diabetes clinic on demand.
Amid a burgeoning marketplace of digital health offerings and innovations, employers should shop and negotiate for health care solutions with the same rigor they shop for their business needs. They should challenge vendors to demonstrate the cost-effectiveness of their programs to produce better health and improve productivity, presenteeism, and quality of life for their employees. They should even consider demanding money-back guarantees like some health systems now provide.
3. Partner with hospitals and physicians.
As health systems struggle with their own financial crises, this is a good time for employers to partner more closely with hospitals and doctors. If the CEOs of businesses have much to learn about health care, perhaps health care has much to learn from these CEOs. Whether it’s lessons in improving operations from a manufacturing plant or ways to deliver better customer service from a retail perspective, employers can offer their own industry-specific expertise to help hospitals and medical facilities practice safer, more efficient, patient-friendly, and cost-effective care. For example, Intel shared its expertise in supply chain and “lean” management to improve clinical care in metropolitan Portland, Oregon. Most hospitals and health systems have a community advisory or governance board. By serving on these committees, employers can begin to understand — and perhaps even improve — the care their employees and their families receive.
Employers’ actions must be decisive precisely because the future is so uncertain. By partnering with the health systems that provide care for their employees, establishing clear expectations for high quality and low-cost care, and leveraging telehealth and virtual care solutions to achieve these goals, businesses can help their employees better weather the ups and downs of Covid-19. In doing so, employers can build a more robust and affordable model for the good of their businesses, the economy, and the health of millions of Americans.
SOURCE: Lee, V. (15 June 2020) "U.S. Health Care Is in Flux. Here’s What Employers Should Do." (Web Blog Post). Retrieved from https://hbr.org/2020/06/u-s-health-care-is-in-flux-heres-what-employers-should-do
How to Help Your Team Advance
With many managers wanting to help their employees expand their skill set and talents, they are continuously working side by side with their employees to define their goals and achievements. Read this blog post to learn more.
Working for a company that invests in career development is often a top priority for employees, and if the company doesn't provide those opportunities, employees will take their talents elsewhere. A 2019 iHire survey found that 51.7 percent of professionals voluntarily left their job in the past five years. One of the reasons professionals cited for quitting was the lack of advancement opportunities (reported by 11.7 percent of respondents).
Managers can help combat this talent drain by working with their direct reports to define the employees' career goals and then help them achieve those milestones. "If you want the best team and want them to perform at their highest level, you have to invest in developing them," said Iris Drayton-Spann, SHRM-CP, vice president of human resources and organizational development at WETA, a public television station in Arlington, Va. "Then they will bring their 'A' game."
Investing in your team doesn't necessarily mean paying for high-priced training programs. There are plenty of low-cost and free development opportunities managers can offer employees, such as suggesting certain trade publications to read, or introducing them to a staff or board member who is a subject matter expert or thought leader in a field they want to pursue, said Jody Fosnough, SHRM-SCP, a senior consultant and executive coach for Right Management, a leadership development firm in Fort Wayne, Ind. The key is to find out what skills each team member is looking to develop or what type of position he or she hopes to grow into.
Ask Thought-Provoking Questions
Drayton-Spann carves out 45 minutes every two weeks to talk with her four team members individually about their goals, training needs and anything else they want to discuss about their work. It's up to each employee, though, to set the agenda and tone for the meeting.
"Some of the meetings are casual, some are very formal," she said. "I listen to them, they ask me questions, and then I ask them questions. It gives them ownership over their career development. It's not me telling them what to do." If they make a commitment to work on a project, meet with a mentor or look into a professional membership organization, Drayton-Spann follows up with them at the next meeting to see if they completed the task and to figure out what the next step will be toward their milestone.
To help employees set realistic goals, Fosnough said, managers need to ask more pointed questions than simply "What do you want to do?" Ask employees questions that force them to think critically about their strengths:
- What's a compliment you received about your work?
- What recent problem have you solved?
- How have you surprised others on your team?
- What are you most proud of this month?
These questions will help employees to consider why their colleagues value their work and help them see what types of roles they should gravitate toward in the future.
Find In-House Opportunities
One of the best ways to help team members advance is to invite them to work on a stretch assignment—a task outside their job description—that allows them to learn new skills or interact with colleagues they normally wouldn't have access to, Drayton-Spann said. Instead of telling an employee to take on a new project, Drayton-Spann asks the employee to work with her on a project. She also takes time to explain how the project would benefit the employee's career. Perhaps the worker will learn a new skill or have an opportunity to interact with members of the C-suite, she said.
In addition to stretch assignments, managers can offer plenty of other in-house opportunities to help employees grow into a new position, including cross-training with another department, telling other managers at the company about an employee's strengths, and allowing an employee to shadow someone who holds a position he or she is interested in growing into, said Kimberly Coan, a 20-year HR professional in the Dallas area. Job shadowing allows employees to learn what skills they might need to develop and the type of training they should focus on. And sometimes it reveals that a position they're interested in isn't actually a good fit for their skills, she said.
Career development can also focus on soft skills and help the employee gain confidence. For instance, an employee once asked Coan how to become more comfortable interacting with company leaders outside his immediate department. Coan encouraged him to invite a regional director out for coffee and ask the director how to best help the employee's department director do her job.
If an employee asks to participate in a specific training program, make sure it's appropriate for the employee's goals, said Andrea Raggambi, CEO at PerforMore Coaching and Consulting, a leadership development firm in Falls Church, Va. Often employees will want to earn a certificate or participate in a training program because they heard another colleague just completed the program.
"Sometimes they see their colleagues do certain things, and they think that is the correct career path for them even if it's not," she said. Ask the employee to explain why he or she believes the training will help achieve his or her career goals, how it will have a positive impact on the team, and how it will help advance the company's overall mission, Raggambi said.
Keep Plans Flexible
Keep in mind that not all employees will be interested in advancing their career. Some employees are content staying in the position they have, and managers need to respect that, Coan said. There might be reasons outside of work that influence their decision not to pursue a promotion. For instance, they might be taking care of an aging parent or sick child. But, Coan said, keep in mind that just because employees aren't interested in career development today doesn't mean they won't be interested in three months or a year from now.
Employees' goals can change. Raggambi recommends asking employees to revisit their career plans every three to six months. Managers should always ask, "Does this career plan still look good for you? Are you still excited and energized by this?" It's important to allow employees to reassess their plans and make adjustments.
SOURCE: Rabasca Roepe, L. (09 June 2020) "How to Help Your Team Advance" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/people-managers/pages/developing-your-employees-.aspx
What Your Youngest Employees Need Most Right Now
During the trying times that the coronavirus has placed upon the workforce, it seems to be creating a bigger unknown difficulty in younger employees. Read this blog post to learn more.
The long-term toll of the coronavirus is unknown, but its effects on our health care system and the economy have already been catastrophic. And while the immediate concerns of skyrocketing unemployment and a stalled economy must be addressed today, employers also need to begin considering how to rebuild for the employees returning to the workforce — or entering it for the first time.
This includes Gen Z, the youngest members of the workforce and those currently in secondary school or college. Many who were just beginning their career journey have been furloughed or fired. Those in school were suddenly confined to their homes. Collectively, they are experiencing the greatest national trauma since the Great Depression and World War II.
Ultimately, for the workforce to be equipped to move forward and thrive, employers will need to address the fallout resulting from Covid-19 on their youngest — and future — employees.
How Events Shape Generations
As the Pew Research Center notes, looking at world events and other formative experiences through a generational lens helps provide an understanding of how people’s views of the world are shaped. Young people who grew up during the Great Depression and defended and supported the nation in World War II were coined “The Greatest Generation.” Once past the traumas of these extraordinarily difficult years, this generation shared characteristics that included a patriotism manifested by reverence for American ideals, a belief in the wisdom of government, and a frugality born of severe want.
For Millennials, the horror of 9/11 and the global economic crisis that began in 2007 were calamitous events that were life-altering for their generation. As many were sitting in classrooms, word of airplanes crashing into buildings spread through their school; frightened teachers, family members, and friends were unable to offer their usual reassurance that everything would be okay. The chaos that followed became the touchstone for a future where potential terrorist attacks were an ever-present theme in the way Millennials interacted with the world around them.
As they later began to make their way into the workplace, the economy collapsed. Job offers were rescinded, full-time opportunities became part-time without benefits, and many new hires were the first fired. A generation with an undeserved reputation for disloyalty had to change jobs frequently simply to keep up with basic bills and crushing student debt. Together, these experiences contributed to a profile of a generation more likely to seek order in their world and meaning in their work.
Today, even as the coronavirus has been merciless in its impact on people of all ages, the long-term effects on the Gen Z cohort of adolescents are likely to be particularly severe.
For the rest of their lives, the time the world stopped will be seared in Gen Z’s collective memory, a generation-defining moment that instilled deep fears about their uncertain future. Overnight, they lost their daily interactions with the teachers who trained them, coaches who mentored them, clubs that fulfilled them, and friends who sustained them through the painful ordeals of youth. Milestones such as proms, plays, athletics, and the ritual of graduation can be crucial to social and emotional development, each experience serving as a rite of passage to the next stage of life. These lifecycle markers of adolescence that were nervously anticipated and excitedly shared swiftly vanished.
How Companies Can Support Gen Z Employees
It will be years before sufficient data exist to quantify the full impacts of this experience on Gen Z. Existing research, however, can help employers learn what they should expect and how they can best manage their Gen Z employees, today and in the future.
Research in three areas offers a good start for this analysis: skill development, stress management, and building emotional intelligence.
Skill development. Gen Z’s learning has been disrupted in a way that schools were unequipped to manage. Some converted course work to online formats, often implemented by teachers and professors untrained for such a platform. Others minimized direct instruction, urging students or (depending on the grade level) parents to turn to independent projects and digital resources.
In most instances, learning has been attempted in the presence of entire families similarly house-bound and juggling multiple responsibilities — environments that are not conducive to instruction without any preparation. Grades have been converted to pass/fail, tests have been abandoned, and deadlines extended.
These options may be right for the moment, but likely will have costs. Research shows that Gen Zers already experience a difficult cultural transition between college and the professional world that can leave them feeling disoriented and confused. Now that their structured learning has been upended, employers and employees may need to develop greater patience with Gen Z’s adjustment to the professional world and a greater focus on intergenerational mentoring and support.
Employers should consider thoughtfully designed programs to ease Gen Z’s transition by, for example, rethinking orientation programs, early assignments, and mentoring focusing on the development of expertise. For example, orientation programs generally consist of a short-term introduction to manuals, computer systems, and other basics of the workplace. A more comprehensive approach could extend orientation throughout the first-year work experience, offer rotations throughout the organization, and include programs to help new hires integrate into the culture of the workplace. Programming can also address substantive job requirements, offer strategic career support, and provide training on the organization’s goals and objectives, allowing employees to appreciate where they fit and why they matter.
Mentoring, too, can be a powerful way to leverage generational diversity. Research demonstrates that, properly coached, new professionals will develop faster because their learning has been enhanced and guided. To maximize the opportunity for a successful mentorship program, employers should ensure managers understand the benefits of strengthened intergenerational relationships, dispel negative perceptions that could weaken engagement, and provide the needed time and resources. One way to accomplish such buy-in is by including reverse mentoring programs where young employees help senior workers improve their skills in technology and social media. For members of Gen Z, such mutually-supportive relationships can enhance their expertise and ease their transition into the workplace, offering employers the added bonus of a stronger multigenerational culture.
Of course, the most significant and potentially enduring adjustment that workplaces had to make during this pandemic has been the implementation of remote working arrangements. The sudden shift was forced on employers by a crisis, but workplace experts have long advocated for greater flexibility based on changing gender and age demographics, globalized businesses, and technology improvements. As businesses begin to rethink how they open their doors, they should also consider building new transition and learning opportunities into the culture of flexibility that younger workers are seeking.
Stress management. For more than a decade, researchers have noted an alarming trend: Gen Z reports higher levels of anxiety and depression than other generations. Studies also tell us that childhood exposure to significant stress can impact brain development and affect mental and social development. If Gen Z’s baseline already shows high levels of stress, what will the impacts of this pandemic be when it comes to their work and careers?
Most companies are aware that unaddressed employee stress and anxiety can also result in absenteeism, turnover, and lowered productivity. Recent data estimate that the annual cost of job stress to U.S. businesses exceeds $300 billion. But too few firms have developed effective programs to help their employees with mental health struggles. In fact, studies shown that an effective stress management policy operates at the employee, workplace, and organizational levels. In particular, organizational approaches lead to more sustainable results than interventions solely directed to individuals.
Further, because Gen Zers are starting their careers with higher levels of anxiety exacerbated by the coronavirus pandemic, employers can adapt existing research and best practices to create customized programs for young workers. This could include early-career affinity groups that encourage open conversation in a supportive environment. In addition, coaching interventions can boost an individual’s confidence in their ability to succeed and reduce anxiety, helping to keep minor performance challenges from becoming career-damaging incidents.
Emotional intelligence. Research demonstrates that emotional intelligence, consisting of self-awareness, self-regulation, motivation, empathy, and social skills, is a critical element of effective leadership — and can be taught and learned. Employees who develop emotional intelligence can provide a foundation for a respectful work environment and a talent pool of future managers. This area of research offers both challenges and opportunities for Gen Z employers.
In having to cope with a shut-down of life as they knew it at such a young age, many Gen Zers have experienced a massive interruption in their ability to discover what motivates and fulfills them. Because of this, they’ll need more time in their young adult years to undertake this self-exploration. Employers can help fill this gap by offering programming that helps build emotional intelligence from the outset of their careers — not several years down the road. One note: I would recommend eliminating the phrase “soft skills,” a term that actually denigrates the importance of training and development in these important areas.
Employers are likely to benefit from the likelihood that Gen Z enters the workplace with a greater level of empathy and adaptability, qualities that are critical components of emotional intelligence. Having experienced both the significant disruption to their own lives and the pain and sorrow felt by friends and loved ones who suffered during the pandemic, Gen Zers are likely to be vigilant to the emotions of others at work.
Companies have the opportunity to help members of Gen Z become the Next Great Generation of leaders. Having been tested at a very young age, they will bring a special blend of resiliency and humanity to the workplace. Employers can take advantage of these unique formative experiences by providing structured support to their younger employees that will smooth their transition and ensure their place as valued members of the workforce.
SOURCE: Rikleen, L. (03 June 2020) "What Your Youngest Employees Need Most Right Now" (Web Blog Post). Retrieved from https://hbr.org/2020/06/what-your-youngest-employees-need-most-right-now