As many of you know, I spent the majority of my career with Hewitt Associates (prior to Aon coming into the picture). During the latter part of my 17 year career there, Hewitt became very focused on Six Sigma and ensuring an in-depth root cause analysis was performed on any issue that came to the surface. For those unfamiliar with Six Sigma, I promise I won’t bore you with the details. However, the general concept behind Six Sigma was not to put a band-aid on a problem as a short-term fix, but rather identify the root of the problem and address that issue so that it could be eliminated/resolved. I submit that our current health care situation is in dire need of Jack Welch and a Six Sigma Black Belt (of which I am not) and, at the risk of further stating the obvious, the current path of ACA does little to address the root problems. My hunch is that many of you agree with this submission. Over the last few months, I’ve had the opportunity to speak to many groups about ACA and the potential impacts that Private Exchanges will have on the benefit trend line. In preparation for each of those discussions, I have been taken back to the Six Sigma mindset and have tried to determine whether Private Exchanges are solving the root problem or simply addressing the symptom. After looking at the issue from many different angles, I believe the answer lays not in the exchange itself, but rather in the outcome of the private exchange’s focus — consumerism. My belief is that a lack of employee consumerism and engagement is at (or near) the root of our problems and this must be addressed if we are to hope to see any improvement in the trend line. All the band-aids and aspirin in the world (disguising themselves as pay or play, HDHPs, private exchanges, etc) will not have a long-lasting effect on our health care trend line if we do not engage the consumer and provide him/her with tools to support them in this process. An engaged consumer will drive change, will change habits, will take accountability, and will address the root cause. However, we face an uphill battle in overcoming the current consumer mindset (click here for a related post from my friends at Benz Communications addressing this mindset). It will take time. It won’t be easy. But, I believe firmly that we first must educate and provide tools to bring the consumer buying process more in-line with traditional buying processes. Private Exchanges, in my opinion, have come the closest to driving consumerism more so than any of the previous industry attempts. The best Private Exchanges engage the consumer with strong decision support, creates skin the game via a defined contribution, and provide tools for post-purchase utilization. However, and it is worth repeating, only the best Private Exchanges accomplish this objective. The landscape is littered with organizations touting their ability to run a private exchange and address the root cause, but there are far more pretenders than contenders. Give us a call if you’d like to better understand how to tell the difference.
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