HEALTH CARE un-covered's New Beat: Disintermediation

As I’ve written previously, before I left my job as VP of corporate communications at big health insurer Cigna, I was in a leadership meeting with the company’s CEO at the time, Ed Hanway. 

At the end of the meeting, as we sipped on coffee and finished off snacks, a colleague asked our nearly fearless leader a question I’ll never forget: “Ed, what keeps you up at night?”

Ed surprised us all with a quick, one-word answer: disintermediation.

Many of us, me included, quickly looked up the fancy, unfamiliar word on our Blackberries. 

The year was 2007, and the campaigns to succeed George W. Bush, whose administration had been friendly and generous to us, were taking shape. Ed made no mention of the fact that the leading Democratic contenders, Hillary Clinton and Barack Obama, were talking about the need to enact sweeping reforms that could squeeze our profit margins. And advocates for a Canadian-style single-payer health care system were becoming more visible, vocal and organized. Even our private polls were showing that more voters supported Medicare for All than opposed it. People despised our industry. But Ed made no mention of any of that, maybe because he had confidence that those of us in public affairs (our lawyers, lobbyists and my team) would make quick work of reforms we and our shareholders didn’t like, just as we always had, regardless of who occupied the White House. 

No, what made Ed lose sleep was his concern, undoubtedly secretly shared by others in his orbit, that the company’s employer customers would eventually view big health insurance companies as unnecessary–and rapacious–middlemen. They’d begin to search for alternatives in the market (the mythologized and worshiped “free-market,” unfettered by government meddling, before which my colleagues and I bent our knees and insisted was the only worthy arena for tweaking the status quo). Ed worried employers would stop buying our “value proposition” and our “solutions” and find ways to disintermediate us out of the employee health benefits space–partly if not completely.    

Well, guess what, Ed was prescient, and that’s why I’m writing this post (although I doubt Ed worries much anymore about Cigna getting the axe. He retired a year after I left the company with a $110.9 million going-away package, way more than enough to cover any out-of-pocket expenses he might ever face).

But David Cordani, Ed’s successor, and the CEOs of all the other insurance giants, undoubtedly are now paying attention to an employer community that is waking up and beginning to take action. This awakening hasn’t made headlines yet, but a growing number of employers and unions are either ditching the middlemen or insisting on new contracts to replace the ones that have cost them–and America’s workers–an arm and a leg, year in and year out. 

So in addition to HEALTH CARE un-covered’s focus on what’s happening–or not happening–in Washington and state capitals and how big insurers have transformed themselves into Decepticons that pick our pockets and refuse to pay for the care we need, we are starting a new beat that I call, well, DISINTERMEDIATION. (Yep. All 17 letters, seven syllables of it.) 

This new beat will showcase the sliver of the health care market where enlightened brokers, consultants, employers, entrepreneurs, lawyers and health care providers have become modern-day Houdinis, disentangling themselves from big insurance companies’ grasp. They’re doing exactly what Ed feared would someday happen: proving that the millions of Americans with employer-sponsored coverage can get access to care with better outcomes–and without ridiculously high premiums, deductibles, copayments and coinsurance requirements–by carving out the insatiable giants.

Our DISINTERMEDIATION beat will shine a much-needed light on what’s happening out of view of most lawmakers, reform advocates and the media. We’ll introduce you to the people who are at the forefront of this important movement, including former insiders who, like me, were cogs in the industry machinery, dutifully doing whatever was expected of them to help the C-Suite achieve aggressive profit goals–until they couldn’t stomach it anymore. They now have a religious-like fervor to help America’s employers, unions, health care providers and consumers find a better, fairer and far less expensive way forward. 

Last month, HEALTH CARE un-covered co-hosted a webinar with the Validation Institute that featured three of those folks who are as up to speed on what’s happening in the world of health insurance and health care delivery as anybody I’ve come across: Julie Selesnick, an attorney at Berger Montague; Jeff Hogan, the president of Upside Health Advisors; and Brian Klepper, a principle at Healthcare Performance, Inc. 

The Invisible Hand Is An Ideal Pickpocket, But Disrupters Are Smacking It

I want to stress that I long ago stopped believing that the unrestrained “invisible hand of the market” will deliver us into health care nirvana. It just ain’t going to happen. Greed is a powerful force, maybe the most powerful force in health care today. But some of the disintermediators you’ll meet already have racked up a bunch of success stories (which we’ll tell you about in the months ahead). And in the current state of our political system, controlled as it is in so many ways by my former colleagues in the insurance business, the people we vote for aren’t going to lead us to the promised land all by themselves anytime soon, either. I’m once again seeing growing support for improving and expanding traditional Medicare to cover everybody, but at the same time I’m seeing that big insurers have many members of Congress–in both parties–in their back pockets, just as they always have. If that crowd gets its way, we’ll all wind up in Medicare Advantage, a worst-case scenario that keeps yours truly up at night. We will continue to keep an eye on what the people we vote for are up to and whether what they support would benefit their corporate campaign donors more than the rest of us. Our reporting, we hope, will educate and inspire lawmakers to enact reforms that, along with the disintermediators, will help free us from the industry’s vise, which is squeezing the life–and life savings–out of so many of us. And if you get your coverage through an employer, we hope you’ll bring our reporting to the attention of the folks in your C-Suite. 

Next up later this week you’ll meet two former insiders who are helping employers and their employees save millions on prescription drugs by putting the kibosh on prevalent trickery in the pharmacy benefit business.

Welcome to DISINTERMEDIATION.