We’re talking about the opioid epidemic. Asking whether employers have played a role might seem far fetched, but it is the exact question explored in a new book by Dave Chase.

The Opioid Crisis Wake-up Call looks at the health care system as a whole over time and how inefficiencies, financial incentives and abuses have played a role in propagating a culture of addiction and substance abuse by working age individuals.

“Healthcare” is a $3 trillion industry, and it’s hard to ignore that outside of the government (through Medicare, Medicaid and the VA), the majority of citizens obtain their health insurance through their employer. We could argue the efficacy of the system and whether employers should have a role in the healthcare buying process; however, it’s the system we have today. And, employers are the leaders of it.

Consider the following a book report for The Opioid Crisis Wake-up Call and decide for yourself the answer to our opening question…

The Employer

The process of a health plan buying decision usually starts with the CEO or CFO setting a budget for health benefits, accounting for annual increases and giving HR leaders (who are inherently risk averse) the following directives for health insurance:

  1. “Keep employees happy and productive.”
  2. “Don’t get us sued.”

The results aren’t pretty considering that health insurance has the lowest customer satisfaction of any industry!  Why’s that? Billions of dollars are passed off to third party entities like insurance carriers, Pharmacy Benefit Managers (PBMs), Third Party Administrators (TPAs) and insurance brokers who are not incentivized to act in the best interest of the dollars that are spent. Rather, the incentive is to maximize shareholder value, their own bottom lines or commission income.

A traditional insurance agent’s commissions, for example, are a tied to the  amount of premium paid to the insurance carrier. The more a company pays for employee health insurance, the more they earn in commission. What happens if you combine that dynamic with an unhealthy employee population, waste and inefficiency?  Yep, insurance premium increases.

The System

With billions of dollars coming in, insurers and hospital systems are charged with maximizing shareholder value. This results in the industrial practice of medicine where low margin specialties (like primary care) are devalued in favor of pushing patients to higher margin specialized care and putting “heads in beds” at hospitals. Those practicing primary care often feel like hamsters on a wheel… facing pressure from their corporate administrators to see as many patients as possible, yet also care for the patients who come to them. Prescribing opioids for pain management (pushed by pharmaceutical reps) is an easy way to treat a patient and meet the demands of their patient load.

Through Pharmacy Benefit Managers, insurance carriers have chosen to make pain management medications more available and lower cost through their plans. In contrast, carriers have consistently failed to cover alternate pain therapy modalities such as physical therapy, chiropractic sessions, acupuncture and other alternative behavioral and psychological support services. PBMs have access to data showing opioid distribution volume increase but have failed to address the issue… allowing the crisis to grow.

The end result? In South Carolina in 2016, there were nearly 5 million opioid prescriptions filled. That’s more than one prescription for every person in the state! Chances are many of those individuals are actively employed in various industries across the state, yet the risk of workplace injury is 9 times higher from those who are on a narcotic for pain. According to the medical director of the state Compensations Insurance Fund of California, covering opioids and not alternate pain management programs has “created a monster”.

The Economy

The giant sucking sound in the economy for decades has been the increase in “healthcare” spending. Unfortunately, this has been at the expense of the American middle class who has seen 20 years of wage stagnation. Consider this…

  • 60% of the workforce makes $20 or less per hour.
  • Half of the workforce has an insurance deductible of more than $1000.
  • More than half have less than $1000 in savings.

Those who support their families on an hourly wage job typically can’t afford not to work. So, turning to quick acting, effective pain management solutions like opioids is logical. However, the impact on the economy is direct and expensive. Those suffering from opioid addiction are largely working age adults or their dependents. For many, the habit has been funded by an employer based health plan which is now coming back to bite those same employers.

As the economy has improved, the competition to fill job openings has increased. One of the biggest complaints employers have is that they do not have the labor to meet the capacity for increased production. In one specific mid-west labor market, it was estimated that 40 percent of job applicants either failed or refused a drug test. This resulted in propagating the labor shortage and maintaining levels of unemployment. Furthermore, for each one point rise in unemployment, there is a four point rise in addiction and a seven point rise in emergency room visits. This further impacts state and municipality budgets.

Effective adjustments can be made by professionals in the medical community… MDs, DOs, RNs, PAs and Pharm. Ds. But, what can be done at the employer level?

The Solution

For starters, employers must reject the conventional wisdom that, in order to save on medical spend, you must reduce benefits. To the contrary, the way to reduce spend is to improve benefits. Much like a manufacturer boosts production output by investing in technology and processes, a high performing health plan invests in better benefits for employees. Imagine a plan that places effective  and transparent pharmacy benefits as well as primary care at the core of the program while reducing all barriers to access of it.

Partnering with a Health Rosetta Certified Advisor will help guide employers through the process of implementing the 7 habits of a highly effective employee medical plan:

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  1. Transparent pharmacy benefits
  2. Major specialties and outlier patients (focus on MSK, Oncology and other high cost areas)
  3. Transparent and open networks
  4. Value-based primary and routine care
  5. Independent, active plan administration and patient stewardship
  6. High performance plan design, documents and risk management
  7. Transparent advisor relationships

Recent results of employers who implement Health Rosetta style plans show one-sixth the rate of opioid prescriptions, indicating the result of addiction from an employer based plan becoming rare. The key component to this model is that it incorporates physical therapy and primary care at the forefront of a treatment plan, rather than prescription pain killers.

Health Rosetta Certified Advisors, like Benefit Advisors of Charleston, are mission-driven to change the conversation around employer-funded health plans. We will guide and help implement these core components to help change the current misaligned incentives in the healthcare industry. Not only does this result in a healthier, economically vibrant community; but it also sets your organization up to the viewed as an employer of choice in your labor market.


Learn More

Ready to discuss plan options that will serve you and your employees better?

Schedule a complimentary consultation to learn more about The Opioid Crisis Wake-up Call and how your company can lead the charge against our country’s opioid crisis.

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