Physician entrepreneurs, policy reform can help small businesses navigate rising health care costs

As we approach the end of the year, businesses are facing a 10-year high health care cost hike. While ballooning prices affect all Americans, the small business community will feel an outsized pinch. Congress should push proposed legislation over the finish line and employers should explore alternative health care options to help relieve the financial pressure.

The U.S. health care system is in dire need of transparency, choice and competition. Changes associated with the Affordable Care Act have strangled doctors, hospitals and employers with government red tape. The resulting regulatory landscape has restricted patient choice and meaningfully increased costs for middle-class families and small businesses. 

A survey from earlier this year finds that 98 percent of small employers that provide health insurance to staff are concerned rising costs will make offering the benefit unsustainable within the next five to 10 years. Not only could employer-sponsored health coverage disappear for millions of small business employees, but ballooning costs are also sapping resources that could otherwise be invested in facility upgrades, employee wages, job creation and expansion.

While a broad simplification of the health care system that prioritizes the doctor-patient relationship is needed to fully address the problem, current political realities in Washington make that nearly impossible. Instead, entrepreneurs should focus on nurturing free market workarounds as policymakers adopt complementary, incremental reforms that enjoy bipartisan support.

Even in the current divisive political environment, these goals are attainable.

As families and small businesses drown in high health care costs with plans that feel like they offer little coverage, entrepreneurial physicians have created an alternative path to access affordable medical services that put the patients back in control. It’s called direct primary care. 

Patients at these practices pay a modest monthly fee to access regular exams, telemedicine, and routine procedures that operate outside the traditional health care mafia. And rather than being a slave to paperwork and insurance companies, direct primary care physicians are able to forge strong relationships with their patients.

As health care costs continue to skyrocket, small businesses that currently provide health benefits should explore these types of options for their employees. That way, the small business community can access medical services ranging from high quality primary care to catastrophic coverage at a fraction of the cost. Although it’s a boutique industry now, a growing market demand will attract more physicians to the arena.

Meanwhile, on Capitol Hill, lawmakers are gearing up to address soaring prescription drug prices — a trend that is costing businesses and families big time. Policymakers are attempting to inject transparency and accountability into the drug supply chain to rein in prescription drug prices that have ballooned by nearly 90 percent over the past decade. 

Much of the problem is due to the middlemen of the drug supply chain called Pharmacy Benefit Managers (PBMs). These entities were originally created to control costs but have increasingly taken advantage of government loopholes and consolidated. Now, PBMs can game the system and absorb billions of dollars a year from the pharmaceutical market at the expense of small businesses and their employees.  

Federal policymakers are rightly considering several pieces of bipartisan legislation that would help shine a spotlight on middleman behavior and lower costs. 

For example, the DRUG Act would strip PBMs of incentives to steer patients towards more expensive medication by adjusting compensation structures to a flat fee, rather than a percentage of the price tag. The Protecting Patients Against PBM Abuses Act follows a similar strategy while also fostering transparency and accountability. And other policy proposals take significant steps towards delivering drugmaker rebates to patients at the pharmacy counter as financial savings.

The current health care cost trajectory is unsustainable for small businesses. While an overhaul of the system is politically unfeasible, elevating direct primary care options and addressing middlemen schemes in tandem is the next best alternative as we approach 2024. 

Elaine Parker is the president of the Job Creators Network Foundation, which manages the HealthcareForYou.com policy reform framework.