Redirect Health CFO Discusses How Employers and Payers Can Work Together Post-Pandemic

It's important for business leaders and payer executives to understand what's changed due to the pandemic and stay focused on where they can go in the future. 

Editor's note: This conversation is a transcript from an episode of the HealthLeaders Finance Podcast. Audio of the interview can be found here.

While the challenges and changes that were borne out of the COVID-19 pandemic primarily centered on issues faced by provider organizations, payers and employers were not spared.

It's important for business leaders and payer executives to understand what's changed due to the pandemic and stay focused on where they can go in the future. 

Darryl Baker, CFO of Redirect Health, shares how employers should approach their health benefits design coming out of the pandemic.

This transcript has been edited for clarity and brevity.

HealthLeaders: In your conversations with employers or business leaders, what are they focused on coming out of the pandemic as it relates to healthcare? 

Baker: One thing I view as a positive change coming out of the pandemic is that the market has become more open to virtual solutions rather than in-person solutions. When I think about healthcare and, specifically, programs that businesses set up for their employees, [they] have historically gravitated towards models that were focused on in-person care delivery. This pandemic has highlighted to the marketplace that there are other ways of receiving competent, thoughtful, and quality medical attention virtually.

To that point, virtual care, generally, is a lower-cost way of providing and receiving medical care in businesses whose health plans have been designed around what I'll call the 'old model' of in-person care. They may be missing out on opportunities to create forward-thinking solutions that gravitate more towards virtual care or at least begin the healthcare journey in a virtual manner.

Prior to joining Redirect Health, I was a CFO of businesses, including those in the healthcare industry. When it came to purchasing health benefits for employees at my previous companies, I would defer to the HR people. Historically, we would work with health benefits brokers who would bring a menu of options. As a CFO, it's an uncomfortable position to be in when you're being told by your broker that your option is an increase in costs for a solution that is not necessarily better than what you've been utilizing. 

Since joining Redirect, it has become completely clear and apparent to me that there are options for businesses. I didn't realize that these options existed; that businesses can create health benefits solutions for their employees that are not necessarily centered around the traditional options: Blue Cross Blue Shield, UnitedHealth Group, Cigna Corp., or Humana Inc.

HL: If I'm a small to midsize employer, what are the best ways to get a better handle on healthcare benefits design? What should insurers keep in mind during these conversations as well? 

Baker: Finance leaders need to be more proactive in the conversations with their health benefits brokers. It's important for finance leaders to understand the dynamic [between brokers and health plans], to challenge the broker, and ask questions like, 'What are my options?' It's important for finance leaders to be educated on these options, such as self-funding, which has not historically been available to smaller companies.

The key takeaway for me is that finance leaders need to be educated on this. And I'll admit, I was not [educated] prior to Redirect; I would just take what the broker gave me and say 'Thank you very much.' The reality is that the brokerage community is going to be key in this shifting landscape with respect to how employees and their families get access to medical care through their employers.

We are seeing big players getting into this space; Amazon has recently announced the Amazon Care initiative, and the company intends to roll it to outside businesses in the state of Washington. JPMorgan Chase has announced the Morgan Health initiative, which is focused on helping employers come up with creative solutions and reduce costs. These are big players in this space; they're getting active in transforming how healthcare is delivered through employer-sponsored coverage.

Related: Former Haven Healthcare Alum Joins Flume Health as COO

HL: How can businesses ensure that their employees are financially literate as they examine their healthcare benefits packages? 

Baker: At a macro level, I think that as a nation, we are just awful consumers of healthcare. I think the reason why is because the system has basically said, 'Here's your insurance benefit, you're covered, here's your insurance card, and here's what the network is. Go get your care.' It's like handing your employee an open credit card and saying, 'Go get it done.'

[This dynamic] has made us uninformed consumers. What we need to do is to educate people and inject more consumerism into the healthcare system, and we need to develop solutions that, like car insurance, are truly insurance. Routine blood labs, annual physicals, X-rays, and MRIs, which are relatively low-cost and low-risk, shouldn't require insurance to pay for them.

We need insurance to protect us from catastrophic situations, specialty medication needs, and hospitalizations. In order to educate consumers and employees, we need to help them think of healthcare as something that they consume and price shop.

HL: What would you say to the insurance executives listening to this podcast in terms of what they could do to orient their businesses to be more helpful or proactive in these conversations with employers? 

Baker: It's imperative for all players in the healthcare ecosystem to start to view from a consumer and traditional marketplace lens. The healthcare marketplace is unlike any other marketplace that I've observed, and I am a big believer in markets. The key takeaway for me is to start thinking about healthcare as a marketplace where there are providers, consumers, and also these third-party payers.

Let's put the patient and the provider at the center of the healthcare universe. The payer has a role to play, but if we focus on the patient-provider relationship, patients being more informed consumers, and providers helping their patients to navigate the system, I think we're going to see a tremendous amount of efficiency, reduction in waste, and unnecessary spending going away. 

I would like to see the economics of what's currently wasted in healthcare spend going back into the pockets of the American workforce. If we can reduce the cost of healthcare for our employees, presumably, employers can put those savings back into the pockets of their employees. To me, that would be a systemically huge infusion into the broader marketplace, so I think it's incumbent on all players to take a critical lens and work collectively to ensure that we're delivering the highest quality healthcare at the appropriate price. 

Related: Humana CEO Bruce Broussard Forecasts the Future of Healthcare