In this episode, we are joined by Jeff Bakke, Chief Strategy Officer at WEX Health, to discuss the findings of their report WEX Health Clear Insights Report which looks at how consumers view and engage with their healthcare benefits.
Highlights of this episode include:
- Review of some key findings from the WEX Health Clear Insights Report
- Why high deductible health plan participants feel they are making smarter health decisions
- How men and women look differently at unexpected healthcare costs and saving for them
- What educational resources do consumers prefer when making informed choices about healthcare
Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast.
As a growing share of healthcare costs are increasing becoming the responsibility of consumers, it’s important to understand how people use and choose their healthcare benefits.
Jeff has 20 years of experience in business and technology management in the healthcare and financial industries including leadership in national health plans and the consumer-driven healthcare space.
Jeff, welcome to the show!
Jeff Bakke: Hey, Mike. Thanks. Glad to be here. Great to join you!
Mike: Well, we’re happy to have you. For those of you in our audience who may not be familiar with WEX Health, can you briefly describe who you are and what you do?
Jeff: Yeah, you bet, Mike.
So, WEX Health provides a healthcare financial technology platform for partners—about 500 partners. And these comprise of health plans, health companies, third party administrators, financial institutions, a pretty wide array of organizations that deliver benefits and other healthcare-related technology needs.
Mike: Excellent! And today, we’re going to talk through some of the result from your first ever WEX Health Clear Insights Report.
Jeff, can you tell us why you decided to conduct this research and what you were trying to find out?
Jeff: Yeah, we really wanted to make sure that we were getting deep in terms of helping employees being better prepared for healthcare expenses. I think your listeners know that deductibles have gone up considerably over the last several years. And if that’s a problem, we see preparing for out-of-pocket expenses as the cure.
And so, one of the major things that WEX Health does is provide solutions for consumers to help them pay for out-of-pocket costs. And these are health savings accounts, flexible spending accounts and other account-based products. We work with 9 of the top 20 HSA providers in the country. And we wanted to get pretty deep on this.
And so, we decided to work with Zogby. And we pulled about 1100 Americans and asked them a bunch of very specific questions about their employer plans with health insurance, their decision-making process, some of the ways they think about preparing for these costs and what they’re spending the money on.
In addition, we worked up some very specific calls-to-action for our partners to help them with the 300,000 or so employers that they support and the 25 million consumers out there that we can reach to help them prepare for these expenses.
Hopefully, that will reduce the problem for hospitals and healthcare providers in terms of outstanding receivables and other things with consumers that are not able to pay.
Mike: So Jeff, the report has several key findings and suggestions in it. And I’d like to focus in on a few of them with you.
First, let’s talk about high deductible health plans and HSA’s in particular. You found that more than half of the respondents didn’t know they could invest in their HSA. Could you tell us about that?
Jeff: Yeah, you bet! High deductible plans are the problem. I know a lot of hospitals and your listeners probably think of it in that way because it creates a consumer responsibility amount. Health savings accounts are really a deterrent.
So, we want consumers to understand that, how they work, and use them to be prepared for these out-of-pocket expenses.
We learned about half of the respondents believe that 401k accounts actually offer more advantaged pre-tax savings solution. And they weren’t aware that, in fact, as the HSA account holder, not only can you invest your funds—which is really important—but that you can also withdraw them tax-free.
They’re actually is every 401k advantage in an HSA, plus the ability to take the money out early and not pay a taxable pre- and post-retirement. So there’s a lot of advantages to an HSA over a 401k especially as it relates to their healthcare spending.
And then, three-quarters said that they see their HSA as a way to pay for healthcare expenses this year, suggesting that they may be unaware that funds can get carried over from one year to the next. Especially at a hospital, you don’t know when you’re going to be in the hospital. It’s hard to prepare for that in a given year. And so we want to make sure that people that have a health savings account or are considering one understand that this might be a hospital visit five years from now that you’re saving up for now. And that’s an important capability.
Mike: Yeah, you bet! And you also found that high deductible health plan participants feel that they make smarter health decisions—which kind of dovetails I think with what you just said. Why don’t you tell us about that?
Jeff: Yeah, I think there’s financial advantages here. But one of the biggest things about consumer-driven health plans and high deductible plans is that it really engages the employee and the consumer now into thinking about their actions and their own health and how that impacts their financial wealth.
People talk often about health and wealth, but 82% of the participants in our survey, those that were in high deductible plans, they somewhat or strongly agree that managing their healthcare spending helps them be smarter about their own health.
So, you see this kind of transitioned from my wallet to actually my physical health.
Three-quarters of the respondents liked the fact that they get lower premiums because there’s a high deductible. And they are more focused in their health in taking some financial responsibility in that.
And then, the primary reason that these individuals enrolled in an HSA in addition to their high deductible plan was to prepare for future healthcare needs—about 36%—and then the ability to save out-of-pocket or future unexpected medical cost, 29%.
So, a lot of the consumers that have these products really understand and are starting to get it. It’s just great.
Mike: You bet! And an unexpected healthcare cost, as you mentioned, they’re almost a concern. And it appears that men and women look at this a little bit differently which I thought was interesting. What did you find out?
Jeff: Just in terms of men and women, not surprisingly—and my wife would concur with this—it turns out that women are a little bit more responsible, a little bit more prepared, and frankly, quite a bit smarter about these matters. Men are more likely to use personal savings, 18% versus 11%. They’re more likely to use credit cards, 28% versus 15%, to pay for unexpected healthcare bills.
This just speaks to, I think, the female, head of household, being a little bit stronger, they’re more worried about finances. Of men, 14% were not at all worried about unexpected out-of-pocket costs compared with just 4% of women. So, some good data points to I guess drive home the point.
It shouldn’t surprise anyone that two-thirds of those surveyed are somewhat or very worried about unexpected out-of-pocket costs of current healthcare needs or illnesses, and nearly half are also worried about healthcare and retirement.
I saw one stat the other day that half the people in the country are just as worried about the cost of a significant healthcare issue as they are worried about the actual healthcare issue which is pretty startling when you think about that.
So, it really is important I think to do what we can in the industry to not have Americans spending all their time worried about this stuff. I know that three years ago, Monmouth University did a survey of Americans, and they asked them, “What are your biggest financial concerns?” And what tied for first were three different categories was losing your job, household expenses, and healthcare. And they were all running about 13%.
This last year, healthcare jumped up to 25%. I think that’s a reflection of the deductibles rising and other things.
And so, bringing these solutions to both men and women and making sure that they understand is super important.
Mike: So, let’s pivot and talk about consumer engagement then. We know that employers offer different educational tools during open enrollment to help their employees make informed choices about their health coverage. What resources did you find consumers preferred?
Jeff: The respondents indicated that they really liked emails and text messages. And one that we were a little bit surprised about maybe is online gold trackers. And we’ve just implemented over the last couple of years now some capabilities in our platform that helps consumer save up for these expenses and really guide them in a little bit more wizard-like fashion to do that.
So, these resources are the preferred modes of communication and ways to help them make better health choices. These things, we’re excited to automate and personalize which I think is super important. When we think about providing a great experience to a consumer, we’ve really advanced beyond a single experience and we think about this much more as understanding a consumer’s health and wealth situation and then personalizing a lot of these information and messaging based upon where they’re at in their life stage, their financial health and their physical health.
Mike: Of course, the report has all kinds of additional information in it. Jeff, if someone wanted to get a copy of the report, where can they go?
Jeff: Yeah, great question, Mike. You can go to www.wexhealthinc.com/clearinsights. It’s a really nice report. Our team worked very hard on it along with a lot of data and sort of a better understanding of the American population and how they interact with this. You’ll get some good information and insights on what to do about that.
Mike: Jeff Bakke, thanks so much for joining us today on the Hospital Finance Podcast.
Jeff: Thank you, Mike.