Why Employer-Sponsored Health Plans Do Not Change

The #1 Reason Why Employer Sponsored Health Plans Do Not Change... Employers Are Satisfied.

The 2022 Kaiser Family Foundation Employee Benefits Survey Reported:
1) 87% of Employers are Satisfied with the QUALITY of healthcare for their health plan members.
2) 88% of Employers are Satisfied with the ACCESS to healthcare for their health plan members.
3) 66% of Employers are Satisfied with the COST of healthcare for their health plan members.
4) 76% of Employers are Satisfied with the ENGAGEMENT of their health plan members.
5) 82% of Employers are Satisfied with the PRIMARY CARE available to their health plan members.

According to the Technology Adoption Lifecycle, only the Early Adopter employers have a Mission and a Vision for their employee health plan. The rest of employers are largely reactive.

Therefore, in order for a disruptive healthcare startup to be successful, it needs to:
1) Identify Early Adopter employers that are 2) Self-Funded with a 3) Cost-Reduction Problem, having 4) a recent change in Top Executives AND the startup has a 5) Hyper-Polished Salesperson as one of the founders.

A 10X better product and value proposition will FAIL in the employer healthcare market unless the above segmentation and sales strategies are implemented.

Sources:

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[SteveSchutzer]

Striking numbers and kind of explains it all - frustrating to hear employers complain about their cost trend lines but 66% say their satisfied with the cost of healthcare? So the big question is -- how will the CAA impact these numbers and employer sponsored healthcare? And I wonder if we surveyed the employees of these same employers how they would respond - if they are unhappy, and breach of fiduciary claims become more prevalent -- just maybe this will disrupt the adoption curve. We can only hope. Thanks Dr Bricker.

[TaeWooKim-eept]

This should be taught to all health tech srartups

[PacoGValencia]

Those stats on HR satisfaction are mind-blowing. I can't imagine the employees subjected to those plans are anywhere near as satisfied. There is definite reluctance to change, in my experience, but that's mostly because there's not much difference in "products" out there. Whatever incremental benefit is outweighed by the hassle of making a change. Until there's a significantly better "product, " the difference will be made by dynamic sales and marketing like you say, but that's just making different salespeople some money, not making anybody healthier. :(

[SathiyanKutty]

I work in Kaiser Sales and part of the ongoing discussion is around 2nd Sale and what levers are available to increase penetration with current customers. I like your perspective of no pain, no change. Thanks!

[thenaturalgemini]

Interesting topic. Many like to say Health insurance is bad a scam etc. but the employers also play a part in the healthcare system. You mentioned budget and I laughed out loud. I am still waiting for our client to let us know their budget for healthcare and we initially asked them that last year. The answer was they did not have one. 🤣🤣🤣🤣Just winging it.

[MitchellHall-ngod]

Maybe the reason you don't think the product can lead out is because all you've worked with is "mouse-traps" - truly wild to me that you take the time to speak on what needs to be addressed in healthcare startup, and the message is something like: "your product doesn't matter, having a slick executive sales guy matters, finding market segment matters".

[robvidalbjj]

So how do you find those prospects that fall into that small venn diagram overlap?

[johnm.]

Employers are extremely reluctant to change brokers because they develop emotional bonds with them. Asking an employer to change broker/consultants is akin to knocking on someone's door and asking them to divorce their spouse. No matter how "polished" the presentation or effective the solution, they're not going to change their broker. They're just using you for free consulting. They'll just take your best ideas and turn them over to the incumbent broker and have them try to execute them not knowing what they're doing.

For the most part, the only time employers change brokers is when the broker either leaves the business or there's a change in leadership at the company.