Large employers have been bearish on private health insurance exchanges, but a case study presented at last week's Future of Health Care Summit may get them to start thinking differently.
Dean Carter, the chief human resources officer (CHRO) at Sears, said at the summit that the retailer saved $38 million in the first year that it used a private exchange, according to The Advisory Board Company.
In addition, Carter saw an evolution in the way employees selected plans. In the first year, employees shopped for plans that looked like what they already had, the article said. In the second year, they shopped for plans with lower premiums. By the third year, they were picking the plans that were the best value.
"There isn't a CHRO I know who isn't thinking about private exchanges," Carter said.
The private exchange effort has succeeded at Sears because it represents, in a way, the "democratization" of healthcare, Carter added. Give employees choice, price transparency, accountability and the ability to change plans every year, he said, and they become smarter consumers.
Despite the skepticism of large employers, the Kaiser Family Foundation (KFF) believes private exchanges could reshape the health insurance industry, FierceHealthPayer previously reported. Though fewer than 3 million people purchased plans on a private exchange in 2014, KFF said nearly 40 million individuals could do so by 2018.
For that to happen, both employer and private insurance exchange operators need to make better use of decision support tools, The Advisory Board Company said.
In addition, a market that includes about 180 private insurance exchange providers will likely undergo consolidation, the article said. Those best able to provide point-of-service decision support are most likely to reach their full savings potential and rise above the crowd.
- here's The Advisory Board Company article
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