Twenty of America’s largest corporations have joined together to improve the way healthcare benefits are purchased for employees in an effort to create better health care outcomes. The stated goal of the newly formed Health Transformation Alliance (HTA), according to a press release, is “to break with existing marketplace practices that are costly, wasteful, and inefficient, all of which have resulted in employees paying higher premiums, copayments, and deductibles every year.”
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“The current system is unsustainable and it costs our employees too much,” says Kevin Cox, the chief human resources officer (CHRO) of American Express. “Even the most successful companies won’t be able to afford the rising costs of health care in the not too distant future.”
“Our priority in this coalition is supporting positive health outcomes for our strongest asset—our employees. Healthcare benefits are too important to our people for us to sit on the sidelines; the status quo needs to change, and we have to be part of the solution. We are creating a better way of getting workers what they want and need,” says Kim Hauer, the CHRO at Caterpillar.
The initiative focuses on reforms to the supply chain that are designed to reduce redundancies and waste, all of which drive up the cost of health care coverage. By coming together to share expertise, the companies seek to make the current multilayered supply chain more efficient.
Collectively, the 20 companies are responsible for healthcare benefits for four million people and spend more than $14 billion annually on health care for employees and their dependents, as well as retirees.
The HTA, a not-for-profit entity, will serve as part of each company’s health strategy. It is meant to bring increased innovation, improved analyses of the latest data, and greater leverage into how corporations obtain coverage for their workers. A pilot project to help employees obtain more affordable prescription medications is planned for as early as 2017, with the rest of the HTA’s initiatives launching in 2018 or later.
“The American health care delivery system is a patchwork of complicated, expensive and wasteful systems,” says Marc Reed, the chief administrative officer of Verizon. “We’ve done what we can as individual companies. By joining together, we can do more. We need to stop applying bandages to the system and address what’s fundamentally wrong.”