1. “If at first the idea is not absurd, there is no hope for it.”
………Albert Einstein

2. Economists agree that employee
benefits are simply wages otherwise
taken. While there may be tax
preferences, at the end of the day
benefits are simply part of Total
Compensation.
The problem is that the
uncontrolled cost of health care
and the attendant premiums are
crowding out the actual take
home pay of most American
workers – that more and more of
the Total Compensation people
make is in the form of benefits
rather than wages.

3. When you add the questionable value of excessive health
insurance premiums for most employees to the lack of
pricing transparency that is a key part of any managed care
network, you create a real opportunity for “consumer
arbitrage” – a very real Consumer Driven Healthcare
Solution.

4. And to all of this let us add the sanctity of the patient/doctor
relationship – something forgotten in today’s world of
managed care and various government programs – and we
have created the best of all possible worlds.
More affordable care with the providers of your choice!

5.  ERISA plans are the funding foundation. Smaller plans with 25 to 100




employees will typically use aggregate only funding. Larger plans with
more than 100 employees will typically use traditional specific and
aggregate funding. Currently under PPACA, self funded plans offer
significant advantages over insured plans.
There will be no networks. The plan document will provide for claims
to be paid at “Medicare Plus” – payments ranging between 100 and 150
percent of Medicare. Providers are paid “cash” – typically within 15
days of service.
Percentage payments may be different based upon the type of
provider: primary care physician; specialist; and facility.
The base plan will be a High Deductible Health Plan that will qualify as
a Bronze or Silver level plan, but other plans may be offered.
Balance billing disputes will be handled by using the Farley Patient
Advocacy program.

6. 
First, we use Reference Based Pricing – RBP – based upon a Medicare payment schedule plus
something between 100 and 150 percent of base payment depending upon the type of provider
(Primary Care, Specialist, and Hospital).

The agent and client jointly decide on this reimbursement level and it becomes part of the plan
document.

To this we add the services of Compass PHS. They provide the pricing transparency needed for
the employee to know prior to the visit whether or not there will be a balance bill. For each
and every procedure the employee receives 3 prices from providers for each CPT code. The
employee is then free to choose which provider that will accept the reimbursement as payment
in full.

In addition, Compass provides a true “concierge service” for employees including quality ratings
for providers, assistance in choosing specialists, setting up appointments with providers, and
following a claim through to completion. They also review the Explanation of Benefits to assist in
making sure that all claim costs are legitimate. In short, Compass helps the employee navigate
the complicated healthcare system we have in place today.

We also add the services of BidRx for pharmacy claims. While acute medications are
competitively priced, the savings on maintenance medication is truly astounding.

Finally, we provide a number of Consumer Tools for the employee such as CADRplus, Medibid, Digital Labs and Medical Travel. These services are offered on a voluntary basis for the
employees.

7. 
The underlying benefit plan is a High Deductible plan for the employee with 100%
reimbursement after the deductible is met. Plans that have either a Bronze or Silver Actuarial
Valuation are the most common. The goal is to get pricing for the administration and
catastrophic coverage to the point where the employer can afford to pay all of the premiums –
or at least a significant portion.

We want the employee to have a real incentive to become a shopper for medical care since
the huge majority of care is for non emergency circumstances. This is a critical to keeping
the overall costs down and allowing more of total compensation for most employees to be
in the form of wages.

While balance billing disputes are few and far between in the existing plans in place, one must
assume that they will happen occasionally. The overall national reimbursement rate for hospitals
is between 130 and 140 percent of Medicare, so even the potentially huge claims are likely to
fall within the plan document parameters and avoid balance billing. In any case, we have legal
assistance “baked into the program” to challenge the providers if needed.

This is a “sea change” for most people – initial and continuing education for employees and their
dependents will be key for real ongoing success.

For cases with less than 50 lives we will need medical questionnaires completed. For cases over
100 lives we will need claims experience. For groups with no claims experience (no matter what
size), it would be wise to have all employees complete medical histories.

8. If at first the idea is not absurd, there is no hope for it.
Albert Einstein

9.  This is a financial sale – not an HR sale. You must
sell this to the owner/CEO and/or CFO. Human
Resource professionals will run from this idea since
it will require significant change in employee
behavior.
 Real prospects will spark to this idea early on – it
will not take multiple meetings to convince them to
move. They either get it or they don’t.
 Education for both the employer and the employee
is critical to the success of these plans.