The Empowering Employers Live Podcast with Q&A!

This live podcast panel discussion, "The Empowering Employers Live Show," focuses on the critical challenges and opportunities for employers managing self-funded healthcare benefits in the current market. The panelists, including experts in PBMs, HR, claims integrity, and consulting, assert that every employer is fundamentally "in the healthcare business" and must adopt a proactive, fiduciary-driven strategy rather than relying on the status quo. A central theme is the widespread issue of misaligned incentives across the healthcare ecosystem, particularly involving Pharmacy Benefit Managers (PBMs) and traditional carrier networks, which often prioritize profitability over plan performance and employee well-being. The discussion emphasizes the necessity of transparency, data ownership, and strategic plan design to achieve both cost savings and improved employee benefits.

The panel thoroughly explores the concept of "status quo healthcare," defining it as the cycle of renewing the same plans, accepting rising premiums, and increasing employee deductibles, which ultimately leads to functional uninsurance and medical debt for millions of Americans. They argue that this inertia is often driven by a lack of education among employers (HR, CFOs, C-suite) and an "affinity for an iconic logo" (major carriers) among employees, despite widespread dissatisfaction with the system. The solution proposed is for HR professionals to recognize their fiduciary duty and elevate healthcare strategy to the same importance as sales and operations planning. This requires HR to partner closely with finance and leverage claims data to identify cost drivers and deploy disruptive, non-traditional solutions, such as reference-based pricing (RBP) and independent PBMs.

Significant attention is dedicated to the pharmaceutical space, highlighting PBM transparency, vertical integration, and the impact of high-cost specialty drugs. The panelists advocate for PBMs to function primarily as claim processors with a per-claim fee, removing misaligned incentives like rebates and spread pricing. State-level legislative reform, such as measures in Arkansas preventing PBMs from owning pharmacies, is noted as a powerful catalyst for change, contrasting with slower federal action. Finally, the panel addresses the unavoidable topic of GLP-1 medications, stressing the need for employers to implement "guardrails" (e.g., pre-determination, physician management) and consider carving out weight-loss coverage into separate, opt-in programs to manage costs and prevent the expense from counting against major medical out-of-pocket maximums. The consensus is that GLP-1s represent a new category that will continue to grow, necessitating multi-year, evolving strategies.

Detailed Key Takeaways

• Elevate Healthcare Strategy to a Core Business Function: HR professionals must recognize their fiduciary responsibility and treat healthcare strategy with the same rigor and importance as sales or operations plans. Remaining passive or taking a "backseat" is no longer acceptable given the financial impact on the organization and the well-being of employees.
• The Status Quo is "Healthcare Insanity": Continuously renewing traditional fully insured plans while expecting different results (i.e., lower costs) is defined as the definition of healthcare insanity. This practice leads to unsustainable premium increases, resulting in benefit cuts (higher deductibles/out-of-pocket maximums) that deter employees from seeking necessary care.
• Transparency Must Be Actionable: True transparency is defined as empowering employers with actionable claims data, coupled with the guidance of a consultant partner, to deploy effective cost-saving and benefit-enhancing strategies. Dumping raw data on an employer without context is insufficient.
• Fiduciary Duty Requires Claim Review and Action: Employers fulfill their fiduciary duty not just by conducting an annual audit, but by actively reviewing claims for ineligible charges and acting on the findings. Failure to act on identified overspending or errors, especially with large claims, may constitute a breach of fiduciary obligation.
• PBMs Should Focus on Safety and Processing: The ideal PBM model involves processing claims for a clear, per-claim fee, while removing themselves from the profit-driven incentives tied to rebates and drug pricing. Their core value should be ensuring patient safety and efficacy by electronically correlating all prescriptions filled across different pharmacies.
• GLP-1 Strategy Requires Guardrails and Carve-Outs: To manage the rising cost of GLP-1s, employers should implement strict guardrails (e.g., pre-determination, clinical management for Type 2 diabetes). For weight loss coverage, it is recommended to carve it out into a separate, opt-in program to control the budget and prevent the expense from counting toward major medical out-of-pocket maximums.
• The Power of the CHRO/HR Leader: HR leaders are often the most powerful executives in a company outside the CEO, controlling both the salary line and the benefits line (the two largest expenses). They must use this leverage to challenge the status quo and drive innovative benefit solutions, rejecting the notion that they are merely an "offshoot" in strategic conversations.
• Address Root Causes, Not Just Symptoms: Effective healthcare strategy moves beyond treating chronic symptoms (allopathic medicine) and focuses on root cause solutions, such as primary care, preventative wellness, functional medicine, and pharmacogenomics testing, to improve the average baseline health of the population.
• Technology Must Bridge System Gaps: Technology and data must be better utilized to provide clinical value, not just cost control. The system currently has fragments where patients (especially those with chronic conditions like asthma) can fall through the cracks when formularies change or costs increase, potentially leading to tragic outcomes.
• The Future of Transparency is Shopping: Medical shopping and price transparency (driven by Tika, CAA, and No Surprises Act) will only scale when the process is simple, and the patient has a clear incentive (e.g., waiving deductibles or co-pays) to choose a lower-cost provider. High deductible plans alone have failed to create educated consumers.
• Proactive High-Cost Claim Management: Managing high-cost claims requires a proactive approach, including designing the Summary Plan Description (SPD) to allow for flexible strategies (e.g., site-of-care optimization for infusions) and ensuring stop-loss policies protect the plan across multiple years, given the 14.5x increase in $2M+ claims observed recently.

Tools/Resources Mentioned

• Varys RX: An independent PBM partner used by one of the panelists.
• Walk-On Clinic: An on-site primary care clinic partner used by one of the panelists.
• Shoulder: A behavioral health partner (mentioned by an audience member).
• Claim Doc: A medical claim auditing and member advocacy company (sponsor).
• Medifi: A company mentioned in relation to employee benefit engagement statistics.
• Nomi Health: A company focused on rebuilding self-funded benefits (sponsor).
• Veailance: A company focused on data-driven claim cost management (sponsor).
• Talon: A company focused on medical shopping price transparency.

Key Concepts

• Misaligned Incentives: The structural problem in healthcare where entities (like PBMs, carriers, or brokers) profit more when costs or premiums increase, rather than when they decrease or when patient health improves.
• Reference-Based Pricing (RBP): A disruptive healthcare payment model where payment rates for medical services are set based on a benchmark (often a percentage of Medicare), rather than relying on traditional carrier-negotiated network rates.
• Fiduciary Obligation: The legal duty of employers (specifically plan sponsors and HR leaders) to act solely in the best interest of the plan participants (employees) when managing and administering the health plan.
• Vertical Integration: The consolidation of multiple stages of the supply chain (e.g., a PBM owning a pharmacy and a health plan) under one corporate umbrella, which often exacerbates misaligned incentives and limits competition.
• GLP-1s (Glucagon-like Peptide-1 Receptor Agonists): A class of medications (e.g., Ozempic, Wegovy) originally for Type 2 diabetes but increasingly used for weight loss, posing a massive financial challenge to employer health plans.
• Functional Uninsurance: The state where employees have health insurance but cannot afford to use it due to high deductibles, co-pays, and out-of-pocket maximums, effectively making them uninsured for routine or necessary care.