Five Qs: Michael Freed on Employer Provided Benefits


Michael Freed, president and CEO of Priority Health, a health insurance provider that recently moved its regional offices from Farmington Hills to Southfield, spoke with DBusiness Daily News about employer provider benefits and trends in the health care space.

1. DDN: What challenges do employers face today in relation to offering employee benefits?

MF: No. 1 is cost. Employers want to make sure they can attract and retain the best talent to compete in their various industries, but at the same time, they want their health care costs to be as low as possible. I think a lot of them are struggling. They feel like they need to offer health insurance as a benefit (but are concerned) as to how they can limit their exposure in regards to the overall cost.

2. DDN: What about bringing in a wellness program?

MF: The trouble with that has often been that wellness attracts the well. So the people who are runners and things like that, tend to be (interested) in wellness, but if you don’t change what you do with that diabetic with heart disease who’s knees are giving out, you’re not going to significantly drive down your costs. Because in almost any health care population, you’ve got half of the people that drive 92 percent of the expenditures, and the other half — the well —  drive about 8 percent. So there’s the dilemma. If you focus on the young and healthy, they may be very engaged with you, but you may not be making that much of an impact on your cost. You have to do the heavy lifting of helping those people who have chronic diseases. You need a different care model than what they have today to take care of them.

3. DDN: Can you elaborate?

MF: (At Priority Health), we stratify a population when we do health assessments when people come in. And when we identify people with multiple chronic diseases, they’re automatically flagged for intervention to make sure they’re getting the kind of preventative and follow-up care necessary. We assign navigators, or care management (employees), who work with that person directly. They make sure they’re taking their medications when they should and looking at how we can (prevent hospitalizations) before they happen. And that make’s a huge difference. We’ve been estimating about a 25 percent reduction (in costs) when we intervene that way.

The difficulty is in scaling (this process). It’s very difficult to scale without using a lot more technology than we’ve historically used, so that’s what were doing right now. We’re developing a lot more technology to help us in that process.

4. DDN: What other trends are you seeing in the industry?

MF: I’ve spent my whole adult career in health care, and it seems that every trend (hopes) to be the thing that’s going to be the silver bullet, but it never really works out that way. So I caution people when they talk about trends. But there are things that we’ve been emphasizing, including transparency. The industry has not had a history of being transparent, so we’re focusing a lot on transparency with our members and people who purchase health care so they know what value of what they’re buying.

5. DDN: How is that going to happen?

MF: A lot of our emphasis has been in mobile. So, for instance, what we’re going to do is allow people to shop for services, book appointments, and make comparisons online. It’s this whole idea of, “A doctor ordered an X-ray for me. Where can I go, and given where I am in my benefits right now, how much is it going to cost me out of pocket if I have it done this afternoon at 3 o’clock.” Those are the kinds of things we’ve never had before as an industry, but that’s what we’re putting into place right now.