Why Employers are Driving Innovation in Healthcare

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Why Employers are Driving Innovation in Healthcare
Calendar08 February 2018

Amidst the blizzard of coverage of last week’s announcement that Amazon, JP Morgan Chase and Berkshire Hathaway are forming a company with the goal of finding a better way to provide their employees with health coverage, this New York Times article stood out: Employer Health Insurance: Often-Hated, Sometimes Pioneering, Now on Amazon’s Radar. It echoed the theme of our initial post on the subject last week: That innovation is an ongoing process in the employer health space, and that these three companies – as outstanding as they are -- would do well to look at the successful efforts of other employers as they begin to move from lofty goal to action plan.

There were two points in the article that I think are worth underlining here. First, employers have the right set of motivations to work for positive change:

  • They want to provide health coverage that keeps their employees healthy and productive 
  • They want employees to like their health benefits
  • They need to manage this very significant operating expense

And second, they have the leverage to drive change throughout the system. The article quotes a Berkeley professor who studies the industry as saying, “To the extent that you have seen innovation by insurers, it’s often at the behest of employers.”

For inspiration, read up on the examples in the article of great ideas pioneered by some bold employers. (Quite a few are Mercer clients – just saying.) The take-away: there is a robust history of employer experimentation in healthcare. The best ideas have paid off, and spread.

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