How 60 of the nation’s biggest employers are uniting to fight the benefits status quo
When Josh Riff was leading benefits for Target, he found himself increasingly frustrated that he wasn’t able to take more of a lead when it came to managing the healthcare of his employees.
“All the ideas, all the innovation, everything came through [our carrier],” he says. “We were on the hook to pay for our healthcare, but we weren’t doing anything proactive to change the trend or the curve except for what our provider was telling us to do.”
What Riff soon learned after talking to other benefits managers was that he was far from alone. Around the country, benefits departments were quietly seething over a number of issues wreaking havoc on their companies and their employees: Rising costs. Chronic conditions. Growing amounts of waste. Lack of transparency. Most were disenchanted with carriers and other industry players who were failing to find innovative solutions to fix the problems.
Unsatisfied with the status quo, Riff, a trained ER physician, began to look into the new crop of health-tech startups aimed at providing cutting-edge benefit solutions for employees. Riff began meeting with them, but it was hard to keep up. There were too many companies, and he couldn’t take all the meetings while he was running benefits for one of the country’s largest employers.
Riff had an idea: Why not gather benefits leaders at large companies to divvy up meetings with the startups, pilot some of the programs and then discuss what worked and what didn’t?
What started as a small group of companies — Apple, Goodyear, Fidelity, Google and Target — meeting together in 2014 has quietly blossomed into a powerful industry force that has intentionally flown under the radar until now: The Employer Health Innovation Roundtable, a grassroots group made up of nearly 60 of the country’s biggest employers that represent nearly 8 million employees.
On the surface, the roundtable is a twice-yearly meeting for companies including Boeing, Delta, Facebook, Walmart and more to connect and match with health-tech startups and to look for solutions to a host of health-related issues plaguing the workplace: The opioid epidemic. Mental health struggles. Musculoskeletal disorders. Caregiving responsibilities.
But at its core, the group represents something more meaningful: Employers joining together to try to take more control of a health system they see as wasteful, costly and confusing.
“Employers large and small are disgusted with the fact that the massive incumbents — the big hospital systems and the big carrier systems — aren’t doing anything to help [find] a solution,” says Sally Welborn, Walmart’s former senior vice president of global benefits who joined the group as an employer member and now serves as the group’s executive adviser. “And there is a subset of us who are saying, ‘OK, we’re so fed up with it, we are going to take matters into our own hands and change things.’”
Though the roundtable isn’t launching its own healthcare business to provide coverage — a la Amazon, JPMorgan Chase and Berkshire Hathaway — in some ways it was a forerunner to newly named Haven, the independent healthcare company the three formed early last year to directly provide insurance to their collective 1.2 million employees and their family members. Instead, EHIR serves more like a think tank, and in doing so, casts a much wider net, bringing together many of the country’s largest employers to embrace tech solutions that aim to better the lives of millions of employees nationwide.
“When we can bring 20 different mindsets and viewpoints and perspectives together, to some extent, it’s very humbling,” says Jason Parrott, an EHIR member who is Boeing’s global leader of healthcare and well-being strategy. “You may think you have it all figured out, but really there’s so much out there.”
The roundtable also has kept a lower profile, issuing no press releases nor holding public events, and putting all of its efforts into serving its members.
“Member privacy is a very important component,” says EHIR CEO Michael Laquere, who met Riff when they both worked at Target. “We like being under the radar.”
EHIR and Haven are two examples of a growing movement that finds employers playing a larger role in how their workers are cared for. There’s Apple, which is setting up a network of health clinics for employees and their families at the tech company’s headquarters. Then there are other companies that are disrupting how employers pay for care by taking insurers out of the equation and contracting directly with leading health systems. Walmart, for example, has partnered with Mayo Clinic and Geisinger to care for certain conditions under a centers-for-excellence model. Companies including GE and Boeing have direct employer contracts with health systems.
Those efforts are a result of a number of issues vexing benefits managers — and employees all over the country — including dramatic costs: Annual premiums for employer-sponsored family health coverage reached $19,616 in 2018, up 5% from the previous year, according to the Kaiser Family Foundation. Employees, too, are struggling: On average, they pay $5,547 per year toward the cost of their coverage. Meanwhile, increasing costs haven’t equated to better quality.
“These benefits leaders are trying to manage their budget and this trend, and their leadership — CFOs, CEOs — are finally saying, ‘You can’t keep increasing another 5%,’ so it’s time to do something different,” Laquere says. “And when you look at the underlying factors of healthcare cost increases — it’s lack of transparency, it’s misaligned incentives, it’s waste.”
Employers are not only looking for individual solutions; they’re turning to one another to increase their market power and to make meaningful changes for themselves and their employees.
“We’re in real market transition right now, and employers are finally driving this in a way they haven’t driven it before,” says Tom Parry, president of the Integrated Benefits Institute, an independent nonprofit that serves more than 900 employers.
Strength in numbers
The roundtable is organized around three different cohorts, each with no more than 20 employers — a number EHIR’s Laquere says is intentional — large enough to make big changes for millions of employees nationwide, small enough that the group can network in a meaningful way. EHIR is a referral-based model and a private network, Laquere says, so it’s designed to stay small. “We’re not a conference; this is an intimate group of trusted, like-minded peers and thought leaders who come together twice a year.”
The group launched a third cohort in March, which is finishing its development and has nearly selected its 20 employers.
Each cohort meets for two days twice a year; each meeting is hosted at one of the member’s company offices. The first day involves employers sharing case studies, partnerships with companies, past solutions or pain points. EHIR doesn’t include benefits advisers or representatives from health plans so that employers can speak freely — as a lot of complaints over the status quo are often directed to those two groups.
“I can look to my peers at Google who went forward with a pilot and really understand what innovative solutions they launched… and we can quickly understand how their employees engaged with the solutions, or what the key results were,” Parrott says. “That sharing of experience really simplifies our efforts and [helps us] think through — not just individually, but as a group — [how] to really improve and optimize the performance of our employees.”
Day two is what Laquere refers to as “Shark Tank day,” where eight to 10 benefits and health startups — EHIR calls them “innovators” — present to employers. Companies can submit to present, and an EHIR advisory panel curates submissions down to a list of the top 50 companies. Then, members of each cohort vote to select their top 10 that are invited to present for pilot opportunities.
Laquere says the companies pay a small fee to present to employers, but says the group does not accept any commission. EHIR employer members also pay a small annual membership fee to give them some “skin in the game.” He would not disclose how much the fees are, but said they help cover the group’s overhead and operations.
The startups that have presented include a notable group of health-tech firms: Cariloop, a platform for employees to access caregiving resources; Hello Heart, an app-driven platform designed to help employees manage hypertension, heart rate and cardiovascular health; Livongo, which focuses on diabetes prevention; and Happify, a digital platform that helps employees understand the source of their feelings. More than 150 innovators have presented to EHIR members over the last five years.
The companies “are using technology that the industry hasn’t been using,” says EHIR’s Welborn. “They are actually doing what the health systems aren’t doing. … They are building programs that the providers should have been doing, but they’re not.”
Startups have been on the rise as employees clamor for access to their personal data and employers look for specific ideas for helping them with their pain points. These companies allow employees to track their heart rates, their sleep cycles, their blood sugar — all from their smartphones.
“Previously, healthcare lacked technology-first solutions,” says Cindy Pulido, director of U.S. health benefits at Facebook and an EHIR member. “In the past few years, we have seen an influx of companies using technology to challenge the status quo in healthcare delivery.”
Making a match
The group’s goal is for employers to match with an innovator, then for the two to work together to pilot a program for the company’s employees. It’s been a success: There’s generally a 90% match rate, Laquere says, meaning that nine of the 10 innovators that are selected to present are matched with one or more members. The average number of matches ranges from three to five members.
The matchmaking aims to help the startups, too, since it gives them an idea of what employers want to see. Hello Heart CEO Maayan Cohen, for instance, says her company’s affiliation with the EHIR has been “tremendously valuable” and afforded them “immediate and direct feedback on our solution.”
For the most part, the group’s benefits managers say the discussions are a way to focus on particular pain points that they might not have addressed.
“As an employer — and a large employer in particular — we have a unique opportunity to do better, to think differently and really move forward with new models, new solutions,” says Boeing’s Parrott.
Through the group, the aerospace company — which has approximately 150,000 employees — has partnered with Livongo, a platform that helps employers manage the health of their workers with diabetes and other chronic conditions, which has had “favorable outcomes” for Boeing. The company also has partnered with Vida Health, an app that pairs employees with health coaches, and benefits analytics firm Artemis Health, which will help Boeing better collect and understand its employees’ health information.
“[A lot of it’s about], ‘How do we make it uber-simple for our employees so they aren’t overburdened and overwhelmed by things to do? It’s about taking a consistent approach for the good of our employees,” Parrott says.
“Not every employer is built for this. Not everyone is willing or able or hungry enough to do this and to really drive change.” -EHIR CEO Michael Laquere
Meanwhile, Facebook has rolled out programs with Lyra Health and fertility benefits firm Progyny. Through Progyny, Facebook provides employees up to four IVF cycles, including genetic testing, with no preapproval required. The program’s success — fewer miscarriages, high single birth rates, very few multiple births — has made the firm an evangelist for the partnership, speaking about its success at EHIR meetings.
Other firms, including Delta, have partnered through the EHIR with Hello Heart. Seventy percent of employees using the app at the companies who have partnered with the platform have reduced their blood pressure with an average drop of 22 points, Hello Heart claims.
Employers commit to trying at least one solution each year, Laquere says.
“There’s a real commitment to action,” he adds. “Not every employer is built for this. Not everyone is willing or able or hungry enough to do this and to really drive change. They [have to be] committed to doing something, not just talk about it.”
Though new technologies and platforms have been identified as one solution to improve overall well-being, others have been wary about too many technologies in the picture, citing consumer and employer “point solution fatigue.” How does an employer manage all these solutions, and how does an employee keep up with each one? That’s a challenge the group acknowledges, saying it’s a topic of conversation among members.
Welborn admits the partnerships aren’t a silver bullet to the problems plaguing the country’s health system, but says they are one way to fight back. “It’s an arrow in the quiver,” she says. “As big as some of us are as employers, we have not been able to get the provider system to fix the problem; we haven’t been able to get the carriers to fix the problem. So instead of having one big bomb to fix it, we are going to sling a bunch of little arrows at it and maybe over time it will make a difference, particularly for our own employees.”
Call to action
Initiatives like the roundtable aren’t just about technology or partnerships, the same way problems in the healthcare industry aren’t just about costs. It’s mainly about fighting back against a system they believe needs disruption and committing to making a change.
Though it might go against conventional wisdom for employers to get together and share ideas on how to reduce costs and retain and attract talent, it’s an important way for employers, as a group, to be heard.
“As big as some of us are as employers, we have not been able to get the provider system to fix the problem; we haven’t been able to get the carriers to fix the problem." - Sally Welborn, EHIR adviser and Walmart’s former senior vice president of global benefits
“Sharing lessons learned and how to communicate different benefits makes us stronger and pushes the industry to keep up with our companies,” says Facebook’s Pulido. “As benefits professionals, we challenge each other to think outside the box.”
Parry, the president of the Integrated Benefits Institute, agrees. Benefits managers historically have been more open about troubleshooting and look to their peers to help find solutions to help employees, he says, adding that the institute plans a program in the coming months that will use a technology platform to link employers to each other around their common issues and give employers access to subject matter experts from the marketplace. The institute is not connected to EHIR.
There are also similar initiatives to EHIR: The National Business Group on Health has a group called the Health Innovations Forum, which it launched a year after EHIR, in 2015. That group has some overlap membership.
These initiatives are all important for the greater good of the health system, Laquere says, adding he hopes these groups — and independent moves from employers — might inspire more employers to act.
“[It’s time to do] something really different to disrupt the traditional models with alternative solutions that can materially address rising costs,” he says. “We want to empower [employers] to take the lead and take more control — it’s sort of the last hope.”