We live in a country where individual freedom and rights were stitched into our founding fabric. However, when it comes to healthcare, we have a system that is not for the people. In America, employers choose our health insurance, health insurance companies choose which doctors we can see, our hospitals refuse to disclose prices of care and choose how much to bill us. In the end, we, the consumer, are left with little influence navigating a complex and costly system.
For most of us, we've become immune to the status quo where a job is a prerequisite for decent healthcare coverage. Every year, we select from limited health insurance options our companies give us, but the truth is the choice was mostly made for us. Our employer selected a plan from hundreds of options behind the scenes, leaving employees and their individual health needs largely out of the equation.
Why is this a problem? Your company takes care of you, and you are exempt from the minutiae of health insurance. All sounds good — until you actually need to use those "great" health benefits. Anyone with experience navigating US healthcare knows that something is deeply wrong. It's confusing. Basic services are shockingly expensive. The billing makes absolutely no sense. The customer service is terrible. Even with a great health plan, you must navigate your insurance network or you could be stuck footing the bill.
US healthcare is a mess. Employers choose healthcare in the US. These two things are related. Employer-managed healthcare is bad. Really bad. It puts an undue burden on employers, gives little choice and personalization to the consumer, and creates poor incentives for the entire healthcare system. When you trace back many of the issues with US healthcare — poor patient experiences, nonsensical billing, and misaligned incentives — the role of the employer emerges as a key culprit. And we are largely alone in this - very few other countries share our employer-driven model of healthcare.
Employer-selected health insurance is an anomaly, and it just doesn't make sense. We don't ask our employers to buy our car insurance, homeowners insurance, or the stocks in our personal portfolios — so why should they control our personal health? The reason is largely a historical fluke. Employers offer healthcare because of a tax exemption introduced by the US government after World War 2, and we've been stuck with this model for 70+ years.
Why don't we see more innovative options for employees? Why do we get the exact same health plans at companies when 50% of the employees are unhappy with them? Employers and HR have a nearly impossible task — to meet the health needs of a diverse employee population with a few preselected insurance plans. Unless your business has a dedicated benefits team, decision makers have countless other responsibilities and generally consider health benefits a check-the-box necessity. There is little incentive to offer innovative options, even if it would improve health outcomes and save everyone money. If just 10% of employees loudly resist a change, it's probably not worth the headache. As long as employers are burdened with managing their employees' healthcare, the market will never reward innovation.
If you're like us you may have wondered, after a long wait on the phone with your insurance company or an indecipherable medical bill, "How do these companies get away with treating their customers so poorly!?". The answer is that they don't. The secret is that you are not the customer. Try calling your insurance company's large-employer sales number and see how fast they pick up the phone! Although you are the end user of health insurance, you aren't the buyer, and in the eyes of your insurance company, it's the buyer who matters. You are an afterthought, and as long as the product isn't so bad that your HR department has a mutiny on their hands, they will continue to treat you as a second-class citizen.