As long as employers control employees’ healthcare, life-saving technologies will go underutilized

A familiar mantra about why health insurance is so expensive is that the cost of healthcare is expensive. I have always disagreed with this statement. It is the third-party financing through employers that drives the underlying costs — not vice versa.

Our current financing system provides inferior healthcare for many and inhibits adoption of new and emerging technologies. This often results in poorer health outcomes and, at times, even death. It also creates false vendor markets created by misplaced incentives.

But there’s an easy fix. By changing incentives, we can develop more efficient healthcare markets, better care and lower costs.

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New healthcare innovations using genetic testing and analysis can identify troubling healthcare conditions before they become serious. Precision medicine is using data to develop personal treatment plans to provide better outcomes for cancer patients. Blockchain technology can easily aggregate and manage healthcare data in a secure way. Artificial intelligence could be used to analyze that data against millions, if not billions, of other records to identify health problems before they show a physical presence. Mobile technology can track your data 24/7 and alert you when there’s cause for alarm. My doctor could concurrently receive an alert notifying him that I may need to see him.

This all sounds great — and it is possible, but it rarely happens. It is not easy for me to get my data. There is no system of artificial intelligence to analyze and act on my data. And my doctor does not have access to the technology or get compensated for embracing it because our healthcare financing has misplaced the incentives.

Our system is not built around my personal desires and incentives, but around those of an employer trying to provide health insurance and control costs for a larger group of people. In this system it is a zero-sum game, wherein the fixed budget of employer money is used to offer one or two insurance plans to meet the needs of diverse employee populations.

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The combination of employees changing jobs and employers changing insurance companies also results in disconnected care. For example, I have had four different insurance companies over the past three years. Who knows where my data is? My primary care doctor does not even know I have fired him. Disconnected care results in disconnected data. We have the technology where tracking, managing and analyzing one’s healthcare data could save someone’s life. Yet, our healthcare system is designed to meet the objectives of an employer and not the individual consumer. Employees are puppets in this system, often abdicating responsibility and reacting to what the employer provides, possibly at their own peril.

Over the past two years I have reviewed more than 100 new healthcare technologies. What I have found is astounding: Many of the companies are targeting the employers, payers or healthcare systems and not consumers. The message to employers is, “buy this for all your employees and you can reduce healthcare costs.”

What happens if I adopt the telehealth program or use that direct primary care doctor and then quit my job? Will my next employer pay for this service? And am I being asked to pay more in my monthly contribution for services that I may not want? Who owns my data? Where is it? All these vendors developing programs for employers to purchase may be creating an artificial market. When an employer pays for a service for employees, there often is no proof of adoption.

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However, if overnight, employers were out of the health insurance market, how many employees would directly pay for some of these services? What would the cost of telehealth be if only those who wanted it paid for it? The aggregated impact of a market where the target customer is someone other than the actual consumer has created an artificial market and false demand. If all these vendors had to sell directly to consumers, the landscape and pricing would look vastly different.

The root cause of a dysfunctional healthcare system is a flawed financing system that is driven by the tax code. A health insurance policy purchased by an employer is tax-free while an individual purchase does not have a similar tax advantage. This has created a system that does not enable life-saving technologies and services to take hold. If we want to fix our healthcare system, we need to get employers out of the way. The government can do this by eliminating the employer deduction for health insurance and moving the deduction to the consumer.

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Imagine the impact of empowering 160 million Americans by giving them control of the money. I believe that both employers and consumers would embrace this change. Employers can still provide funding to compete for talent, but then get out of the way and let market forces deliver what consumers demand. Take the handcuffs off the healthcare system, and we will see how the power of the consumer, combined with American ingenuity, will create a more efficient, personalized and cost-effective system that will be the envy of the world.