In case you missed it, Private Exchanges are no longer in vogue. They have been knocked from their lofty perch and have been replaced….but only in name. Let me introduce you its twin brother, the Health Marketplace. The two names have become synonymous with the latter beginning to take center stage. Over the last year, we have invested considerable time learning, consulting, advising, and promoting this new health consumerism tool called Private Exchanges. We believe firmly that Private Exchanges are a tool that could and should be leveraged by employers of all sizes. Consumerism has been an elusive goal for healthcare professionals since the late 1990s and the lack of consumerism is a root cause of many of our troubles today. Since the 90s, there have been several attempts to try and drive consumerism but each have fallen short of achieving this ultimate goal. It is our belief that the concept, methodologies, and available tools offered through a Private Exchange present our best opportunity to drive employees to behave and make decisions like a traditional consumer. When we are able to achieve this goal, the employee/consumer will begin to make decisions as they would if it was their money. Think about all the time an employee invests in selecting their cell phone and data plan and how they ensure they are getting the best deal possible that meets their needs. It is this degree of ownership that we should all be pointing towards. We have also spent time trying to dispel the myth that Private Exchanges are associated with ACA – the term private exchange is not used once in the volumes of pages of ACA. The term Private Exchange is rooted in good ol’ American Capitalism and was labeled as such because there was, at one time, a fevered pitch about the term “Exchange”. It was a key buzz word in the industry and many of the companies producing these products felt compelled to latch on to the term and leverage it for their gain – and, it worked. There were countless articles written about Public Exchanges and their private counterparts. Americans took the bait and the media and industry were actively promoting the concept. So, in circling back to the lead-in for this blog post, why the name change? I believe there are two factors at play for why we’ll begin to see Private Exchanges begin to be referred to as a Marketplace.
- In reality, a marketplace is a better description for what happens within a Private Exchange. Again, the concept is rooted in the fact that employees are being given tools, information, and expanded choice that more closely resembles the purchase of other consumer products in their daily lives. These purchases are made within a marketplace, not an exchange. So, the name more accurately captures the activities within; and
- The Private Exchange providers are now trying to distance themselves from the very concept that initially brought so much attention – the public exchange. Candidly, I believe that with the public exchanges about to launch and with so many people anticipating a rather bumpy ride, the private exchange providers would rather not be lumped together with such a lead zeppelin. (note: the real humor in this is that the Public Exchanges are beginning to refer to their product as a marketplace…so, we may be in this vicious cycle for a while!)
As a result, don’t be surprised when your e-mail in-boxes begin to be filled up with news about Health Marketplaces and you see fewer and fewer articles about Private Exchanges. Regardless of what we call them, we strongly recommend that you introduce this concept to your clients and help bend the trend line by driving consumerism. Let us know how we can help.