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Q&A: Brian Klepper, National Business Coalition on Health

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Q&A: Brian Klepper, National Business Coalition on Health

Brian Klepper was named CEO of the Washington-based National Business Coalition on Health in March. He also is a columnist and speaker and serves as an adviser to the Lundberg Institute and the Patient-Centered Primary Care Collaborative. He recently spoke with Business Insurance Senior Editor Joanne Wojcik about mechanisms underlying America's health care cost crisis and what employers can do to address them. Edited excerpts follow.

Q: The Patient Protection and Affordable Care Act has been criticized for not doing enough to control the rising costs of health care. How is the ACA affecting employers' decision to self-fund health care benefits?

A: Some of the ACA's market reforms, like coverage of essential benefits, modified community rating and limits on cost sharing, will likely encourage some small employers to transition to health plan self-funding for the first time. Not only will their costs probably be significantly lower, but they'll have more data and more control over the benefit design.

Q: What is NBCH's strategy to help employers control costs in a post-ACA environment?

A: First, I think it's important to understand that the health care industry contributed $1.2 billion in 2009 when health reform was formulated, so the limitations on cost control were pushed hard by the health care industry itself, and they got their way. I think that the delivery of value through the coalitions is a big topic, and one of the things that I'm very actively doing right now is identifying high-value next-generation risk reduction mechanisms in health care, truly transparent pharmacy benefit managers, truly advanced third-party administration firms, musculoskeletal management firms, vascular and surgical and oncology management — all functions that can sit in front of the health plan and drive high value, improvements in health outcomes and reductions in cost.

The core principle is if you belong to a business health care coalition, your costs should be lower and your outcomes should be better. This is a very different model than the coalitions have pursued in the past, but that's where I think they need to go. There are some purchasing coalitions that have pursued this very heavily: The Alliance in Madison, Wisconsin, or the Savannah Business Group in Georgia. This needs to be a more uniform approach throughout the coalitions.

We need to be able at the next level to roll up and leverage the members of the coalition … in a way that leverages their purchasing heft in the market.

Q: Private exchanges are reporting significant growth. How are your coalition members responding to the availability of these exchanges?

A: A portion of them have set up independent review of these exchanges. I think that's a good thing. A lot of the consulting firms are very conflicted. To be a consultant and at the same time to offer an exchange to an employer can be construed as a conflict of interest. There need to be independent advisers.

If your benefits consultant is advising you on your long-term benefits strategy, and if your benefits consultant is offering a private exchange option, they are not likely to be objective and to encourage you to take advantage of their exchange. That's the rub. And so if you are an employer and you are using, let's say, a Towers Watson & Co. as a consultant and you are seriously considering using a private exchange, you may want to consider someone else's private exchange, like Aon Hewitt's. You don't want to be in a situation where your adviser has a vested interest in the counsel that they provide.

Q: What are some employer-led initiatives NBCH has identified to drive value-based purchasing and quality improvement efforts?

A: If you look at some of the programs going on, The Alliance in Madison, Wisconsin has a new effort called Quality Path that gets purchasers to make commitments to quality in a new and substantial way. The Savannah Business Group is partnering with health care systems and physician groups, bringing substantial savings to members. And Pacific Business Group on Health has an Employers Centers of Excellence Network program. There are others too numerous to name that are sprinkled throughout the country.

Part of the task is to identify existing programs that have been successful in communities, scale them and then make them available to other coalitions and purchasers around the country.

One way to think about this is purchasers are acting on behalf of purchasers, and the health care industry has figured out and institutionalized many mechanisms at all levels of the system to make costs more than they need to be. These efforts are about disrupting those mechanisms while driving appropriate care, and the results can be very powerful. We need to find those programs wherever they exist and promulgate them.

Q: Do you see NBCH working with any other employer groups to drive greater change?

A: We're interested in working with anybody who has aligned interests around enhanced health care value. In a system that costs double what all of our competitors on the international stage cost, and in a system that RAND Corp. has shown eats up $4 out of every $5 in household economic growth, there's a lot of room for change. We have allowed health care to crowd out investments in education and infrastructure replacement and a lot of other things. So anybody who is after the same goal of higher-value health care, we ought to be aligned with — that's for unions and local government and firefighters. I think our goal at this moment … is to stabilize and strengthen the organization and get some wins. But going forward, we will absolutely be focused on getting as much clout as possible, working with other players to make the kind of things happen that we know can happen for a healthier economy, healthier business environment and a healthier country.