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Interventional Orthopedic Insights

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From the Desk of Regenexx CEO Jason Hellickson

Is Your Company Too Risk-Averse?

“Your Company is Too Risk-Averse,” says the latest issue of the Harvard Business Review. This article has great insights for anyone running a benefits plan to consider as we have seen far too many Chief Medical Officers, HR Executives, and even C-Suite decision makers abandon the opportunity for transformative change to pursue small, incremental change.

Health care decision-making is even more risk-averse. In the article, “The Coming Golden Age of Disruptive Innovation in Health Care,” the authors discuss the typical innovation pathway in healthcare.

“In health care delivery systems, we have rather preferred to adopt ‘accretive’ innovation – new technology or services that are added to existing services, thus adding new revenue streams without jeopardizing existing provider or supplier income. We promote ever more sensitive scanners, build unproven proton beam radiation centers, and purchase brand name drugs with tiny benefits over existing generics. Accretive innovation can yield better outcomes, and causes little dislocation in the health care sector, but does not dramatically increase value.”

So, why do we pursue small changes? We are hard-wired to be loss averse. The article cites a 2012 McKinsey survey where managers were presented with an opportunity for an investment that would either produce a 4x return (NPV) over four years or crater in the first year. These managers were then asked how much risk they were willing to accept, a question that should be a mathematical decision. They were only willing to accept an 18% chance of loss vs. the mathematically neutral 75% chance.

Companies also put processes in place that encourage group-think and discourage risk-taking. Many decisions on benefits go through a never-ending committee process for evaluation. Decisions that can get made by executives go through a process of getting buy-in from the broker, CMO, various committees, and finally after getting approval from every conceivable stakeholder are approved. It’s really no wonder that we favor small incremental changes.

What Value Is Being Missed?

So what about the “value left on the table”? In one review the authors concluded that group investments could have performed over 30% better if managers abandoned extreme risk aversion. Think about how much value is left on the table in your health plan. Savings in the health plan are bottom-line returns. From Walmart and Boeing, to smaller self-funded employers, companies across the country are taking control of their health plan and driving significant decreases in spend year over year.

How can businesses make changes to improve their decision-making process as it relates to healthcare? If your company values innovation, then reward the employees who bring you those opportunities. We have worked with a lot of innovative people at all levels within an organization and the ones that feel most free to recommend innovation do so in a culture that clearly values this kind of innovative thinking. These employees are driving real value to your business!

Healthy Risk Is Good Business

Healthy risk management doesn’t mean consensus-based decision making. Often we see decisions get presented in an unstructured way in front of multiple decision-makers without a clear line of authority. Do 15 people have to agree about a decision to add it? What unique value does each decision-maker add? Often we see credentials become a stand-in for expertise. Start by identifying how you are going to make a decision including who will ultimately make it, who can influence it, and who is merely offering their input. The end result can be better decisions made more timely and avoid extreme risk aversion.

Successful risk management means seeking creative and innovative approaches to healthcare for the well-being of employees, and therefore the well-being of the company. The Regenexx Corporate Program is one of the most innovative direct contracting options available to self-funded employers and is at no cost to add at any time in the calendar year.

Make Decisions Your Employees Desire

By adding Regenexx procedures to your health plan, you are providing your employees a benefit they want and are asking for. If given the choice between an orthopedic surgery, or a non-invasive treatment with the goal of reducing pain and improving function and mobility, employees choose the latter over 95% of the time.

 

“I’m very appreciative my employer offered my family and me a procedure option that works very well instead of surgery. I had a torn meniscus and my Regenexx procedure fixed the problem 100%.” -Patrick C.

“I’m able to focus better at work because I’m not focused on my pain. I have more energy to be social and active due to a decrease in pain.” -Micaela C.

“I no longer have chronic tight, neck pain. The improvement in my knee is very significant, and I don’t have the long recovery that happens with surgery.” -Ambika P.

“By not having to undergo surgery I was able to go back to work within days and I was also able to return to full use within weeks with little setback.” -Kimberly T.

So what’s holding your company back from adding Regenexx? To learn more about how to add Regenexx procedures to a self-funded health plan, please call 877-341-5968 for a value-based discussion of how we can help or visit regenexxcorporate.com.

Live Informed,

Jason Hellickson
Chief Executive Officer, Regenexx
1-319-899-4332
jhellickson@regenexx.com

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