The most difficult job in the corporate world, and why it’s only getting harder
I grew up in Finland where employers only worry about serving their customers, and the focus of Human Resources (HR) is on hiring and retaining talent. These things alone are hard enough for any company.
As for healthcare, this is the responsibility of the Finnish government given it is a single-payer system. This system needs to address quality, cost, prioritization of acute vs. preventative care investments, evaluation of new treatments and drugs, and hundreds of other healthcare decisions. There are thousands of people trying to get this complex equation right for the benefit of the entire country, every day.
So, when I came to America and eventually learned that an HR/benefits leader at a company that produces shoes (or sells soda, or anything else for that matter) must also figure out the entirety of their employees’ health care — the same hundreds of decisions the Finnish government is making for the entire country — I thought that’s either impossible or just crazy (or both).
Now at Virta Health I work with many of these benefits leaders, and I still don’t know how they get it all done. I’ve come to think of the role of an HR/benefits leader to be one of the hardest corporate jobs. Yes, there are consultants, third-party administrators, consortiums, peer groups, and many other organizations who offer help, but at the end of the day, it’s one person who is responsible for both quality and outcomes (not to mention overall employee satisfaction). Meanwhile, the CFO and CEO are constantly asking why the healthcare budget per employee is going up faster than inflation and wages practically every year and demanding to get it under control now!
Being an HR and Benefits leader is a very big and tough job.
Observations: Evolution of benefits leader focus in healthcare
It’s almost impossible to believe that this job is getting even harder. But it is. The undeniable rise in health benefit costs is outpacing everything else CEOs and CFOs are looking at. More and more people are metabolically unhealthy (read: obesity, diabetes, cardiovascular disease, hypertension, kidney disease, chronic inflammation,…) and the cost of treating the symptoms of these conditions and related issues is going up, not down.
Very few benefits leaders have been successful in getting ahead of this cost trend, but it’s not due to lack of trying. In fact, there might have been even too much trying based on my observation of the last two decades’ in health care technology (or “digital health”) with these companies selling directly to employers.
1: The Pre-digital era: 2000–2010
Most employers relied on health plan aggregated services and provider networks, while focusing on risk screenings through health risk assessments (e.g. biometric screenings), wellness events, and Employee Assistance Programs (EAP’s). The goal was to offer value to employees and spot issues early, so people could get help before it’s too late. Many employers implemented various incentives to get their people to sign up to these programs. That said, the cost of healthcare just kept going up.
2: Digital wellness and engagement programs peak: 2010–2015
In this period, various digital wellness, weight-loss and other related programs peaked. Digital social networks were growing fast and several digital-first wellness companies focused on group challenges and “gamification” of wellness to drive what seemed to be missing: “Engagement”. Step-trackers and fitness apps had their golden years selling to employers. Offering these digital programs and tools made logical sense: health care costs are going up, most of it is driven by people getting lifestyle diseases, and they weren’t “engaging” with any of the programs offered. So, offering weight loss services, fun (group) games around fitness, and incentivizing people to move became the norm. On the surface, it seemed like a good idea, or at least not harmful to anyone.
Except that there is close to zero credible evidence (just the opposite!) that generic employee wellness programs or step-trackers actually work beyond the positive perception that an employer is trying hard to offer something useful.
3: “Digital point solution explosion”: 2015–2020
When employers showed interest in working directly with digital wellness and app companies from step trackers to weight loss programs, many wellness (or healthcare) entrepreneurs saw an opportunity: few people want to pay for digital fitness apps on app stores, but employers have “unlimited” (actually, not true) budgets to buy wellness solutions for their employee base. (I remember one Fortune 500 benefits leader sharing how they get 3,000 digital health vendor solicitations per year. Try sorting that out.) But this didn’t stop thousands of digital health (app) companies from selling their magical promises to self-insured employers. Which takes me to today.
4: Next in 2020’s (I hope): “Show me the money, show me the outcomes”
Leaving Covid-19 aside, what seems to be happening now, in addition to the “point solution fatigue,” is that benefits leaders are left with a bunch of shiny objects. Meanwhile, health care costs keep going up, which is not making the CFO or CEO very happy.
Of course, part of the benefits package is to simply keep employees happy and excited, but when it comes to hard health care costs, benefits leaders are left scratching their heads: “Show me the money, show me the results. Sizzle is helpful, but isn’t going to solve my real problem.”
But it is hard to sort out what is marketing and what is substance for anyone. As a result, I’m seeing many employers hire or “rent” Chief Medical Officers, require claims-based economic analysis to prove economic impact, and also lean even more heavily on outside experts who should be able to tell what’s real — clinically and economically — while the CEO and CFO are watching the numbers and asking for results, finally.
This seems like a healthy trend: show me the money, show me the outcomes. This will also mean that healthcare companies that fail to deliver the goods will have a hard-time surviving the next five years.
After 20+ years as an entrepreneur and operator, I think I could do almost any functional job at least at a mediocre level, except being a benefits leader. The more I think of it, the harder the job looks to me. Here’s to hoping the next era makes it easier, which would be a win for everyone.
