How American Healthcare is Affecting Small Business Owners

This week, Cigna flagged its interest ($67B worth of interest) in acquiring Express Scripts — the latest push in the ever-changing landscape of incumbent players and private industry to rewrite rules for American healthcare.

If you are an employer, one of your biggest priorities is likely ensuring accessible, affordable healthcare coverage for your staff. And if you’ve been watching the political, business and healthcare headlines so far this year, you might feel relegated to the sidelines, unsure of when and how it will impact your business and your people.

Not anymore– here is what small business owners need to know about this market tug of war and how it could impact their employees.

The ‘historical’ long view of healthcare

Framing the past few months in the context of 20 years as the new models have evolved, there is a marked uptake in activity amongst key players: carriers, investors & employers. However, the reality for small business owners is two-fold: healthcare as we know it is a complex behemoth and will not change overnight (despite the 24-hour news cycles to the contrary). The incremental changes that chip away and reset the foundation of the industry are absolutely worth our attention.

At a high level, this most recent market activity can be viewed from three perspectives:

1. Payors (Health & Pharma consolidation in this case):

Health insurance carriers and related distributors (like Pharma) are aligning to capitalize on economies of scale, and broader consumer reach (like Cigna/Express Scripts and Aetna/CVS).

While investors might see this type of consolidation as attractive from a revenue standpoint, the reality for employers — short to mid-term — is that the complexities of trying to integrate massive organizations of this type, their data and processes, will take some time. Ultimately I expect we will see a streamlining of how consumers can purchase bundled sets of Medical and Drug insurance, of how consumers access their Medical and Drug data, and hopefully of how employers and employees access care.

That above said, technology historians may find some similarities of this activity to their own world: think Michael Dell establishing bundling hardware components and owning streamlined distribution. Think Apple establishing the bundling of hardware components, owning distribution, and owning the software experience. These consolidated models ultimately lead to huge leaps in how better products were brought to market, and how consumers utilized them.

2. Employer Experimentation:

Large employers are evolving their participation in how they offer insurance and care delivery: the Amazon/Berkshire-Hathaway/JP Morgan Chase collaboration; Apple’s onsite healthcare; and even Uber’s healthcare transport. They are actively experimenting with what can work, using their size to take fresh approaches, and proving out what can eventually scale down market, amongst employers who may not have the same revenue base.

3. Insurance Technology Innovators:

“Frothy” investment — more than $3 billion in the past year — has been looking to connect this complex, distributed amount of data, services, consultants, and pricing.

All three of these massive activities are churning right now. At Zenefits, our model lies at the center of all three of them.

Related:  Association Health Plans and What Comes Next

So what’s next?

With Insurance Carrier Consolidators:

We are accelerating conversation with the nation’s leading carriers on how to refine and share data to deliver context to employers and employees more effectively. Today we have digital connections to hundreds of insurers across the country.

With Corporate Experimenters:

We love to see how Amazon, Apple, and others are working to reinvent what is possible for healthcare using their collective size and weight. Zenefits is the first aggregator for progressive small and mid-sized businesses, and we’ve sparked a conversation and connection between them, carriers, and more than 250,000 employees across the nation. These corporations collaborate with us to push the envelope on better access to better benefits and with better visibility, all at the fingertips of their people.

With Insurtech Investors in Innovation:

We are doubling down on our Ben Connect product, which allows our new preferred benefits broker partners, like One Digital, to access our platform and deliver their strategic insight to customers — all through powerful, user-friendly technology.

What Can Small and Mid-Sized Businesses Do?

Stay aware of the big shifts.

There is more movement and incremental change now across benefits’ cost, compliance, consultation and payroll, suggesting business owners pay attention more frequently than during their annual health benefits review.  

That shouldn’t require a lot of heavy lifting. Business’ benefits, payroll and HR systems of record should be telling them if they are in compliance or might have potential exposure, and what to do about it. If not, there are solutions, like Zenefits, that are now in place to have your attention and have your back.

The most important time in history is — always — the moment you are in.

Change is not unprecedented in healthcare. When healthcare exchanges came out 20 years ago, they were meaningful but didn’t reset the entire American system. The Affordable Care Act of 2015 took on a huge topic of universal healthcare in this country, but truly only about 15 percent of the total employee workforce was directly impacted.

Today, the velocity of change is faster. Triggers like acquisitions, test models, and investments all add up to intriguing notches of change. Will things be starkly different tomorrow? No.

But is it critical to stay tuned and look at the long view? You bet. And your employees are counting on you to have their backs — and their health — on your radar.