Workers May Feel the Pinch from Health Reform

Employers play a critical role in the Patient Protection and Affordable Care Act (aka Obamacare) as the primary providers of health insurance coverage to working adults.  A recent Gallup poll shows that over half of employers say that healthcare costs are hurting the operating environment of their business a lot, while three-quarters say it's hurting a little or a lot.

Health Reform Is Expensive for Employers

In 2014, small businesses will have to start paying for health insurance if they have 50 or more employees.  If they don't, they pay a $2,000-$3,000 fine, which is well below the cost of paying for the average employer-sponsored family health insurance premium of $15,022. Even including the average amount employees pay, about $4000, employers are still left with an average of $11,000 to pay towards health insurance premiums.  Multiply that by 50 employees (at a minimum) and we're talking an annual extra expense of $550,000.  This is not a trivial amount of money.  A half a million dollars is enough to bankrupt many small businesses, regardless of how much the owners of the business may want to provide health insurance for their employees.  Even owners of large fast food franchises like Wendy's and Taco Bell have announced they will reduce employee hours so they will not have to pay for employee health insurance.

Employees May Feel the Pinch.

That means people working for already low wages will not only be missing out on employer-sponsored health insurance that they can pay for with pre-tax dollars, but they will also be bringing home less money to pay for premiums out of pocket with post-tax dollars.  Even if employers do not cut back on the number of hours their employees work, they may cut wages, as some professors at the Wharton School suggest.  They argue that employers may keep total compensation per employee the same by reducing wages and increasing compensation in the form of health insurance premiums.

Regardless of exactly how employers will choose to address the increased cost of providing health insurance, someone has to feel the pinch.  Either the business takes the hit, or the cost is passed along to workers.

For a great visual on how health reform is projected to affect employers, check out this infographic at Entrepreneur.

Three reasons why information technology won't save health care

Between rising health care costs, increases in chronic illnesses, an aging population, and the complexity of health care reform, the US healthcare system is facing an onslaught of challenges in the coming years.  In particular, the fragmentation of health care services is a particularly strong challenge to the system as people are living longer while living with more chronic conditions that require some level of monitoring.  On top of this, administrative costs make up at least 7% to 14% of health care spending.

Some argue that administration is the problem, and that it's things like paperwork that clog up the system and make it inefficient.  Leslie Ziegler asks "Can designers and developers save health care?"  and suggests that what we're really dealing with is a design problem. She recommends that entrepreneurs focus on creating better user experiences for patients and providers.  She describes some of the innovative new products and services that have recently been developed by entrepreneurs, like an online diabetes management support group and an app for spine surgery patients to better understand their diagnosis. 

But can a few gadgets really save health care in the US?  Probably not, but it may help some people have better outcomes.  Here's a few other reasons why launching a bunch of technology solutions at health care will not save the system.



1. Too many payers and a lack of transparency.
 Many restaurants have their menus, including pricing, posted outside the front door.  Ever seen this at a doctor's office?  Didn't think so.  Transparency in pricing of medical services and procedures is remarkably absent in a so-called private "market" for health care (I guess it is so private that the prices are hidden).  While some people may argue that health care providers don't disclose prices because they are shady people, the real reason is that prices vary depending on who's paying.  Each insurance company negotiates a reimbursement rate, individuals paying out of pocket pay another rate, and Medicare/Medicaid have yet another rate with the SAME doctor for the SAME procedure.  So posting a price list clearly becomes problematic. 

As high-deductible plans and HSA accounts become more prevalent, some entrepreneurs have developed searchable price databases.  Healthcare Blue Book is one of these, as is OkCopay.  While these don't solve the transparency problem, with people becoming responsible for a larger portion of their health care payments, such databases may force physicians and hospitals to compete on pricing, potentially reducing some of the out-of-pocket costs for consumers.


2. Technology requires people who can effectively use it
3/4 of physicians say that electronic health records distract from patient care.  Less than half believe that electronic health records are designed with physicians in mind, and the percentage of physicians who have a favorable opinion of electronic health records has decreased from 39% in 2011 to 32% in 2012. Design may be a large part of the problem with successful use of digital technology in health care, but that's only part of the answer.

Your new app may be super easy to use, but integrating new technology into an existing organization with its own culture is about more than just learning how.  People come with all kinds of preconceptions about how technology can enable or hinder their goals.  And they might feel like the new technology is just out of place with their daily activities. Enter Christian Briggs and Kevin Makice of SociaLens, who have developed an assessment tool for organizations aspiring to implement new technology, measuring what they call "digital readiness."  Understanding digital readiness can help an organization (or an entrepreneur) to figure out how users might respond to an innovative technology in the context of their work environment.


3. Human error.
The recent story about a nurse throwing away a kidney that was being donated by a living man to his sister illustrates that no matter what else is going on, and no matter how important the task is, people do stupid things.  Wasteful things.  Things that can kill people.  200,000 people die every year from preventable medical errors, more than the number of those who die in car crashes each year.

There is no technology that can completely solve this problem, but if patients have better ways of educating themselves about their health and health care through the use of new technology, we stand a chance at being advocates for ourselves. 

Technology has the potential to drastically change the way that health care is delivered, financed, and taught.  But it's no panacea.  We need to be aware of the ways in which health care, technology, and culture interact when proposing new user-friendly designs.