Radical Transparency in Healthcare Benefits

Employers are becoming more transparent on a number of fronts these days. Should benefits selection and design be one of them? Janet McNichol, the human resources director of the American Speech-Language-Hearing Association, believes the answer is yes and is backing it up by allowing employees to work together to redesign ASLHA’s network-only health plan.

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One day after Recode reported that Arianna Huffington believed Uber’s Travis Kalanick could be redeemed, the ride-share company’s founder stepped down as CEO. The move brought a collective sigh of relief from the five major investors who forced Kalanick’s hand. But, the leadership change may also eventually allow former customers to reinstall the Uber app they abandoned during at least two #DeleteUber campaigns to date during 2017.

Trend watcher David Martin attributes Kalanick’s demise to the concept of radical transparency — the idea, in this instance, that companies are now “glass boxes” and a business’ culture is “always public and its most powerful public-facing asset or liability.”

Starbucks seems to inherently understand how to use its glass box to tout its approach to hiring, and to employee benefits: First, by announcing the opening of a store in Kuala Lumpur dedicated to providing jobs for deaf employees, and, second, responding in February 2017 to 19 presidential executive orders by showcasing the company’s values and its health insurance benefits.

As we continue to discuss the renewed opportunity to use employee benefits as an attraction and retention tool, one thing HR executives need to consider is how radically transparent should your companies be regarding benefits selection and design?

An HR leader I share ideas with regularly is Janet McNichol, the human resources director at the Washington-based American Speech-Language-Hearing Association. Janet is one of the most creative and thoughtful HR leaders I know.

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ASHA currently offers its employees three health plans: a network-only plan, a traditional preferred-provider-organization with in- and out-of-network benefits, and a high-deductible-health plan with a health savings account. The plans all cover the same benefits.

The association was planning to eliminate the network-only plan because enrollment was declining, and the offering did not appear to meet the employees’ needs in the same way as the PPO and HDHP.

The ongoing national debate about healthcare coverage, however, made it clear to McNichol and her HR colleagues that many people desire low-cost, low-cost-share health insurance coverage. Given this realization, they believed there was an opportunity to redesign the network-only plan with low cost as the focus. To keep costs down, the reworked plan design could not be as robust as the current plans.

And here’s where the ASHA leadership made a unique pivot. They decided to allow the employees to decide together how to redesign the network-only health insurance plan.

McNichol is leading the initiative and elected to use a deliberative group process to work with employees on the new design. She created — and is piloting — an interactive game where teams of 12 to 24 employees consider their individual needs and preferences, and weigh them against the wants and desires of the overall staff.  Ultimately, as a group, the employees and HR team will decide together throughout the summer what should be included in ASHA’s network-only health plan.

The game design itself builds upon a simulation exercise called the CHAT Project — Choosing Health Plans All Together — that researchers created in 1998 for public deliberation to promote the just rationing of healthcare services. This process has been used in California and Oregon, as well as several foreign countries. Since its initial days, the researchers evolved CHAT into an online exercise that allows them to receive more input, but removes the important social conditions that face-to-face deliberation brings.

ASHA’s game opens with participants viewing a video that introduces the concept of tradeoffs and ties the activity to the national healthcare discussion. They then individually review the 12 benefit descriptions that comprise the overall network-only health plan. They are given 55 pins (with one pin representing approximately two percent of the total plan costs) and are instructed to distribute them across the options that are important to them personally. Participants must also weigh the breadth and depth of the benefits by selecting among good, better and best options for each benefit.

Throughout this process, the employees make tradeoffs because they would need 72 pins to purchase the full array of benefits described.

Participants are then given “life event” cards and test their plan design — in front of the group — against the needs of someone other than themselves.

The final round of game play involves a facilitator and the entire group. Each employee represents their own needs as well as the needs of the perspective characterized by their life event card as the team deliberates, trades off, and finally selects the team’s plan design.

ASHA’s early results indicate the initial players value vision, dental and the rehabilitation benefits the most. The rehabilitation benefit was the only offering where the group selected the “best” option. While the group strongly wanted the centers of excellence option under the hospitalization benefit, they ultimately gave it up.

The biggest advocate for access to medical centers of excellence was an employee who understands the intricacies of healthcare and has had cancer. An employee who is a mom with three healthy children who all wear glasses and need braces had a different viewpoint on what was best for her family.

It appears, at least at this point, that ASHA employees give more weight to their known needs versus their possible needs. And, from both McNichol’s and my experience, that’s consistent with employee behaviors we’ve seen over the years. It explains why workers often select vision and dental benefits because they believe they will use the products, and then 70 percent of them never file a claim over a two-year period. It is difficult for employees to spend money on a benefit they hope they will never need.

Of course, HR executives like McNichol would love to see her employees choose the centers of excellence benefit. So, she’s already investigating how to possibly offer the option as a concierge service.

No matter the ultimate outcome for McNichol and her employees on the network-only health plan design, it looks like radical transparency may be part of ASHA’s future in how it designs and offers employee benefits. Hopefully, it will also allow ASHA to continue to attract and retain highly sought-after employees.

Carol Harnett
Carol Harnett is HRE’s Benefits columnist. She is a widely respected consultant, speaker, writer and trendspotter in the fields of employee benefits, health and productivity management, health and performance innovation, and value-based health. Follow her on Twitter via @carolharnett and on her video blog, The Work.Love.Play.Daily. She can be emailed at [email protected].