Employers Porter and Teisberg on Redefining Health CareHarvard Business School


Providers  |  Health Plans  |  Suppliers  |  Employers  |  Patients  |  Government

Employers have the motivation and the clout to influence the other actors in the system, including their own employees. Employers are the major purchasers of independent health plans. In addition, about half of employer-provided health plans in the United States are self-insured plans, giving employers even more latitude in how such plans are designed and administered. Employers can exert a strong influence on providers, especially through collaborative efforts with other employers. Finally, employers can influence the way employees think about their health and health care. Redefining Health Care discusses why employers have missed the opportunity to drive value improvement in the health care system, and how they can reinforce the shift to value-based competition.

New roles for employers

Set the goal of increasing health value, not minimizing health benefit costs

Set new expectations for health plans, including self-insured plans

  •  Choose plans that demonstrate excellence in playing the roles described for them. (note: hyperlink to Health Plan table above)
  •  Select plans and plan administrators based on health results, not administrative convenience

Provide for health plan continuity for employees, rather than plan churning

  •  Align interests by encouraging long-term relationships between the plan and subscribers

Enhance provider competition on results

  •  Expect demonstrated excellence from all providers involved in employee care
  •  Collaborate with other employers in advancing value-based competition

Support and motivate employees in making good health choices and in managing their own health

  •  Offer encouragement, incentives, and support to employees in managing their health
  •  Provide independent information and advising services to employees to supplement other sources
  •  Offer health plan structures that provide good value and encourage saving for long-term health needs

Find ways to expand insurance coverage and advocate reform of the insurance system

  •  Create collaborative vehicles with other employers to offer group insurance coverage to employees or affiliated individuals not currently part of the employer’s health plan
  •  Support insurance reform that levels the playing field among employers

Measure and hold employee benefit staff accountable for the company’s health value

  •  Health benefits must ultimately be a senior management responsibility, with staff responsible for results
The Institute for Strategy and Competitiveness at HBS