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Path to Transparency
- 1. Transparency… The Path to the True Cost of Healthcare 5201 Johnson Drive Suite 305 Mission, KS 913.236.3090 800.304.9852 SRABenefits.com
- 2. Overview Healthcare – A Major Problem for Business New Paradigm Needed Healthcare Plan Design Deductibles and Copays Case Study: Cigna Choice Fund Cultivate Savvy Consumers Healthcare Marketplace Lower-cost Medications Assist in Coordinating Care Information on Provider Quality Transparency Brings Value to Employers and Employees 2
- 3. For Real? ___ Martians ___ Flying Saucers X ___ Controlling Healthcare Costs ___ Time Travel 3
- 4. As a Business, You Have Two Choices Healthcare – A Major Problem for Business 4
- 5. Healthcare Costs: Major Problem for Business The old model does not work – Employees don’t understand the true cost of healthcare or know where to find the best care Employer benefit plans are overpriced and underappreciated – Routinely costs $4,000 more annually per employee than necessary – Employee health plan satisfaction < 50% Unlimited care management and ill-designed wellness programs have failed Medical inflation will continue to rise in 2013 – 3-4 times the rate of all other consumer goods (7.5%) Healthcare is expensive – One month of cholesterol medicine - $250 – CT scan - $3,500 – Outpatient surgery - $52,000 Healthcare – A Major Problem for Business 5
- 6. Employees are Confused by Healthcare Issues – Healthcare is complex – It is disorganized – It’s not focused on customer satisfaction Healthcare – A Major Problem for Business 6
- 7. New Paradigm Helps Control Rising Healthcare Costs Avoid the mistakes and gain a competitive edge By dodging these pitfalls, you will: – Improve your margins – Raise your employee benefit satisfaction – Create employee-friendly benefits Healthcare – A Major Problem for Business 7
- 8. New Paradigms Starts with Fresh Perspective Employer benefit decisions are influenced by those who specialize in insurance and paying medical claims – Knowing how to negotiate insurance rates and discounts has very little to do with how people actually receive care and make decisions Traditional insurance models distort the reality of health care for its most important consumer: The Patient Healthcare – A Major Problem for Business 8
- 9. Help Patients See the Light When patients become powerful consumers, they can clearly see: – Many health care services are truly commodities – Cost varies by provider – Only patients and physicians make healthcare decisions – Patients educated as savvy consumers can reduce costs What is the solution? – A multi-step process that starts by aligning your benefit design with value-based decisions and behaviors Healthcare – A Major Problem for Business 9
- 10. Key Principles for Effective Health Plan Design Shared Financial Affordability Responsibility for Medical Services Coverage for Employee Tools and Catastrophic Events Support Healthcare Plan Design 10
- 11. Health Plan Design The goal: Selecting a plan that provides effective “coverage” for the employee at a cost the employer can afford To many companies, the design process simply means various tweaks in coverage that curtail premium growth or shift more cost to employees Instead, benefits design should focus on solutions that drive down costs today while educating employees on how to achieve lower costs tomorrow Core Design Principle – shared financial responsibility is a powerful motivator for patient behavior change Healthcare Plan Design 11
- 12. Low Deductibles and Copays Separate Employees from the True Cost of Care Common Procedures Average Cost Can Be as High As Imaging X-Ray Chest $41 $340 CT Chest $530 $1,725 MRI Brain $1,370 $4,631 Diagnostic Procedures Colonoscopy $2,147 $4,661 Endoscopy $2,117 $4,245 Surgical Procedures Arthroscopic Knee Surgery $3,793 $6,949 Labor & Vaginal Delivery $8,720 $13,908 Disc Surgery $7,137 $28,545 Healthcare Plan Design 12
- 13. Eliminate Low Deductibles Current employee perspective: “Looks like I have spent “Once I spend my my entire deductible…I $500 deductible, I guess I need to go get could not care less some more work done how much my before the end of the healthcare costs.” year.” Solution: Raise the deductible and add Health Reimbursement Account (HRA) Healthcare Plan Design 13
- 14. Eliminate Copays A copay is a fixed fee for a particular service or medicine – They create the same fundamental psychological impact on employees as low deductibles and first dollar coverage Copays can be expensive for both employers and employees – A cardiologist visit with in-office testing will cost your employee a $30 copayment, but the cost to your company $1,000 Solution: Eliminate copays – They destroy the connection between price of healthcare and cost to the employee – They can even penalize employees when they meet their out-of-pocket maximums. Take copays out of your health plan and actually save your employees up to 30% on out- of-pocket costs Healthcare Plan Design 14
- 15. Case Study: Cigna Choice Fund Sixth annual study reaffirms that: – Choice Fund consumer-driven health plans save money without compromising care – Customers are increasingly engaged and smarter about their health and health spending Cigna Choice Fund plan combined a Preferred Provider Organization (PPO) medical benefit plan with a consumer health care account. Options – Health Reimbursement Account (HRA) – Health Savings Account (HSA) Healthcare Plan Design 15
- 16. Case Study: Cigna Choice Fund Savings achieved without cost shifting to customers – Analysis of customers’ out-of-pocket health expenses showed that those in Cigna Choice Fund HRA paid nearly the same percentage as customers in traditional plans –regardless of their health status Benefits- When compared to customers in traditional plans, Cigna Choice Fund customers – Spend less on overall medical services – Receive equal or better quality care – Are more engaged in their health and health spending – Are more satisfied with their health care experience – Over five years, Choice Fund plans could save up to $9,700 more per employee when compared to traditional plans. – 14% lower overall pharmacy cost trend in the first year – 72% of Cigna Choice Fund customers used generic equivalents over brand-name medications Even Better health risk profiles on full-replacement cases Healthcare Plan Design 16
- 17. Healthcare Reform’s Impact on Healthcare Design Growth of high-deductible consumer-directed health plans (CDHPs) – Provide the most affordable option and on average satisfy more than the coverage mandate requires Bronze Plan is minimum coverage requirement – Actuarial value of 60% Congressional Study confirmed that CDHPs had 72% actuarial value Healthcare Plan Design 17
- 18. Cultivate Savvy Consumers Factors to consider – Price – Quality – Convenience 18
- 19. The Healthcare Market Varies Widely Cost Variation – Upper GI Endoscopy in Kansas City $3,000 $2,580 $2,500 $2,000 $1,500 $1,292 374% $980 $1,000 $544 $500 $0 A B C D Cost Cultivate Savvy Consumers 19
- 20. The Healthcare Market Varies Widely Almost every employer is surprised to learn that where its employee receives treatment could affect its bottom line by $40,000 or more No need for medical tourism - you can send your employees down the street Cultivate Savvy Consumers 20
- 21. Responses to the Price Differential That statement is an assumption and often false – In fact, better facilities are usually more efficient and can often have the lowest price. – Almost no hospital or surgery center “Well, the more can justify higher prices based on objective evidence of superior quality. expensive facility is of higher quality.” Solution: Provide incentives to your employees to use lower- cost healthcare when possible. Cultivate Savvy Consumers 21
- 22. Where Are the Prices Listed? Providers and insurers agree not to share price information with the public so it will not become available to its competition However, forcing providers to compete on price is the best way for employers to push the healthcare market in the direction of higher quality and most cost-effective care Utilize a third party database of over 20 million claim pricing points for all types of procedures in the U.S. (Compass Professional Health Services– compassphs.com) Solution: Provide comparative price information for employees that is: – Targeted to their specific needs – Timely – Easy to access – Given in conjunction with other support services that allow them to take advantage of the potential savings Cultivate Savvy Consumers 22
- 23. Example of Pricing Recommendation Dear Mr. Smith, We researched the facilities where your two preferred doctors perform knee replacement surgery. Below is the cost comparisons for the surgery at the hospital, appointments, and other associated charges. Both St. Ringo Hospital and St. George Hospital perform a significant number of procedures each year. However, St. Ringo is the newer facility with updated facilities and operating rooms. Component Saint Ringo Hospital George Hospital Charges $20,500 $34,600 Anesthesia $2,100 $2,100 Total $22,600 $36,700 One of the most expensive parts of a knee replacement is the implant. While the implant is typically provided by the hospital and included in the hospital bill, physicians will sometimes order these at cost for patients which are almost always cheaper than having the implant provided by the hospital. This practice, in part, explains the difference in cost between St. Ringo and St. George. Cultivate Savvy Consumers 23
- 24. Example of Pricing Recommendation Our data also suggest the physicians you requested are on similar contracts which have estimated costs as follows: Component Dr. Feelgood Dr. Strangelove Office Visit – New $120 $100 Patient Office Visit- Existing $115 $115 Patient Office Consult $215 $215 Physical Therapy $86 $86 Surgical Procedure $2,000 $2,400 Total $2,546 $2,926 Cultivate Savvy Consumers 24
- 25. Show Employees Lower Cost Medication Options The prescribing habits of most physicians are not rooted in clinical and cost-effectiveness Although in some cases, the brand name medication may be the best option, there are every effective generic medications to treat a number of issues Some PBM’s have on-line cost comparison tools, but fail to interact with the patient and doctor in a meaningful way to actually change the prescription to a lower cost option – leading to unnecessarily large pharmacy spending. Solution: Provide employee with medication cost comparisons and work with the patient and doctor office to get the prescription changed to the higher value. Cultivate Savvy Consumers 25
- 26. Show Employees Lower Cost Medication Options Current Generic Clinical Monthly Medication Equivalent Alternatives Savings Lipitor Pravastatin Lovastatin $116 $120 $4 Generic $4 Generic Effexor XR Venlafaxine Amitriptyline Generic $105 $36 $4 Generic $68 Nortiptyline Alternatives $4 Generic $101 Protonix None Omeprazole $109 $125 $15 Annual Savings: $3,922 Cultivate Savvy Consumers 26
- 27. Don’t Leave Employees to Coordinate Care by Themselves Eliminate the “revolving door” approach to care Employers must find a health pro who can focus on care coordination Solution: Provide your = better care for less employees a medical home money that includes everything from cost and quality guidance, doctor selection, explanation of care options, scheduling appointments, obtaining medical records and reviewing bills. Cultivate Savvy Consumers 27
- 28. Provide Relevant Provider Quality Information “But my doctor recommended him…” Cultivate Savvy Consumers 28
- 29. Provide Relevant Provider Quality Information Combine cost comparisons with quality of service data Ensure that a physician is board certified, associated with reputable hospitals, and not part of a pending or adverse malpractice lawsuit Encourage employees to go beyond these baseline checks to understand referral patterns, past customer = satisfied patient experiences, and personality fit Solution: Provide profiles of physicians who can meet your employees’ specific needs – board certified, free of disciplinary action, good bed manners, competent, courteous office staff, same day/next day appointments Cultivate Savvy Consumers 29
- 30. Steps Along the Path to Transparency Prepare Choose Treat Pay Understand Compare Schedule Review Bills & Insurance Costs Appointments Charges Benefits Select Assist with Create Health Doctors Communications Summary Explain Obtain Medical Options Records If You Follow the Path to Transparency 30
- 31. By using the cost comparison and provider-quality data, you will cut your healthcare spending by at least 10% and $625 per employee per year. If You Follow the Path to Transparency 31
- 32. Yes, For Real ___ Martians ___ Flying Saucers X ___ Controlling Healthcare Costs ___ Time Travel If You Follow the Path to Transparency 32
- 33. David Wetzler President, SRA Benefits 913.236.3091 DWetzler@SRABenefits.com srabenefits.com 33
Editor's Notes
- As far fetched as you think lowering costs may be, I hope by the end of this presentation you will see that this is a real possibility(Blue Cross ad)
- You have two choices: let rising healthcare costs continue to eat away at your profits – or do something about it.
- Let’s face it – the old model does not work, and new healthcare reform laws will not lower your costs. Employees are overweight, more susceptible to illness and chronic disease and have no understanding of the true costs of healthcare or even know how to find the best care. The result – Employer benefit plans are overpriced and underappreciated. They routinely cost $4,000 more per employee per year than they should. Meanwhile, employee satisfaction with their health plan is less than 50%. Years of unlimited care management and ill designed wellness programs have essentially failed. Employers who must find a way to reverse this trend are stuck in the middle – needing to attract top talent with competitive benefits, but having to control costs at the same time. Traditional solutions to the healthcare cost juggernaut simply have not worked. PwC’s Health Research Institute projects medical cost trend will remain flat at 7.5 percent in 2013, but this number is still 3-4 times the rate of all other consumer goods.Employee health plans are expensive because, in general, healthcare is expensive. One month of cholesterol medicine can cost $250. A CT scan can cost $3,500. Outpatient surgery can even cost $52,000
- Employees are dissatisfied with their health benefits– why? Healthcare is complexIt is disorganizedIt’s not focused on customer satisfaction.If you have you ever tried to reconcile an incorrect medical bill and EOB, you know how true this is.
- For the first time, you, the employer, will have inside knowledge on how to avoid the mistakes that your competitors are making. By dodging these pitfalls, you will improve your margins, raise your employee benefit satisfaction and create employee-friendly benefits. There is a clear path to address these challenges, but a new paradigm is required.
- All new paradigms start with a fresh perspective. Today, employer benefit decisions are influenced by groups and individuals who specialize in insurance and paying medical claims. Unfortunately, knowing how to negotiate insurance rates and discounts has very little to do with how people actually receive care and make decisions. In the care setting, the traditional insurance models distort the reality of health care for its most important consumer – the patient.
- We need to shift the paradigm to allow the patient to step above the fog and find themselves as powerful consumers with the ability to demand higher value and more cost-effective care. Once you rise above the fog, you can clearly see a few fundamental principles:Many health care services are truly commodities;Cost varies by provider;Only patients and physicians make healthcare decisions; andPatients educated as savvy consumers can reduce costs. If you don’t make these changes, your employees will continue to pass through the health care system making poor decisions and costing your company untold dollars. There is a way to solve both the employer cost and employee satisfaction problems. It is a multi-step process that starts by aligning your benefit design with value based decisions and behaviors.
- The goal of effective health plan design process is selecting a plan that provides effective “coverage” for the employee at a cost that the employer can afford. To many companies the design process simply means various tweaks in coverage that curtail premium growth or shift more cost to employees. Instead, benefits design should focus on solutions that drive down costs today while educating employees on how to achieve lower costs tomorrow. That focus highlights a core design principle – shared financial responsibility is a powerful motivator for patient behavior change.
- Low deductibles separate employees from the true cost of care. Healthcare is very expensive and many healthcare services cost more than $500 (See Chart #1). For example, an MRI can cost between $500 and $4,600, a healthy baby delivery ranges from $3,500 to $14,000 and disc surgery can be anywhere from $5,000 to $28,000.
- If you your deductible is only $500, the ramifications of a $3,000 difference in total price of a significant procedure is meaningless to employees. They have no incentive to find the best price and a psychology develops where employees say, “once I spend my $500 deductible, I could not care less what my healthcare costs.”How many times have you heard an employee say “looks like I have spent my entire deductible…I guess I need to go get some more work done before the end of the year.” That free-spending mentality costs you, the employer, money. If you are fully insured and have more than 100 employees, your annual premium increases based primarily on your employees’ medical claims. The more they spend, the more your premiums rise – and these increased costs directly hit your bottom line. Solution: Raise the deductible, but still reimburse some of the costs to your employees in a way that discourages overspending – Health Reimbursement Account or H.S.A.
- A copay is different than coinsurance. A copay is a fixed fee for a particular service or medicine. Typical copay amounts are $30 for physician services; $100 to go to the Emergency Room; $10 for a generic drug; or $75 for a brand name medicine. Copays have the same fundamental psychological impact on employees as low deductibles and lack of first dollar coverage – they destroy the connection between the true price of healthcare and the cost to the employee. A cardiologist visit with in-office testing will cost your employee a $30 copayment, but the cost your company $1,000. Even worse, copays can often cost an employee more money. For example, an employee visits a dermatologist. Let’s compare the cost of that visit to the employee with a $35 copay compared to the cost if the employee had 20% coinsurance. The average cost for a first time visit to a dermatologist is $150, and the average cost for a repeat visit is $85. Under the copay plan, each visit costs $35. Under the co-insurance plan, a first time visit would cost the employee $30 and a repeat visit would $17. Both are less than the $35 copay. Unfortunately for the employee, copays usually don’t apply to the out-of pocket-maximum so there is no limit to the amount of money an employee can spend on copay related services. Solution: Eliminate copays. They destroy the connection between price of healthcare and cost to the employee. Further, they can even penalize employees when they meet their out-of-pocket maximums. Take copays out of your health plan and actually save your employees up to 30% on out-of-pocket costs.
- Reinforces Need for Proper Plan DesignCigna Choice Fund Experience Study Reinforces Need for Proper Plan DesignThe sixth annual Cigna Choice Fund Experience Study once again confirms that Choice Fund consumer-driven health plans save money without compromising care and customers are increasingly engaged and smarter about their health and health spending.The Cigna Choice Fund Experience Study is a multiyear comparative analysis of utilization, claim and cost trend data for two groups of customers: those in traditional PPO/HMO plans (the control group) and those in Choice Fund consumer-driven health plans (CDHPs). A CIGNA Choice Fundplan combines a Preferred Provider Organization (PPO) medical benefit plan with a consumer health care account.
- Savings achieved without cost shifting to customers Analysis of customers’ out-of-pocket health expenses showed that those in Cigna Choice Fund HRA paid nearly the same percentage as customers in traditional plans –regardless of their health status. Substantially lower pharmacy trend infirst year When compared to customers in traditional plans,Cigna Choice Fund customers with Cigna Pharmacy Management substantially reduced their pharmacy costs:• 14% lower overall pharmacy cost trend in the first year• 72% of Cigna Choice Fund customers used generic equivalents over brand-name medications Better health risk profiles on full-replacement casesCustomers enrolled in full-replacement Cigna ChoiceFund plans improved their health risk profile by 10%in the first year compared to those who remained intraditional plans. And that improvement is sustainable in subsequent years.
- In a survey Towers Watson & Co. conducted last fall, 66% of employers said they were planning to offer a CDHP in 2012, up from 53% in 2011.One of the primary reasons CDHPs are gaining in popularity is the fact that they provide the most affordable option to satisfy the coverage mandate. In today’s world, the lowest premium plan is an HSA-compatible alternative - Towers Watson Moreover, the average CDHP’s actuarial value exceeds the minimum coverage requirements for the lowest-cost plan that employers will be required to offer under PPACAUnder PPACA, employers will be required to offer at least a basic health plan with an actuarial value of 60%, also known as the “bronze plan.” That’s the equivalent of a plan covering 60% of the cost of an employee’s health care, with the employee responsible for the remainder.When the (Senate) Finance Committee did its due diligence, it found CDHPs had a 72% actuarial value, which puts it ahead of the bronze-level requirement of 60%.
- Take Advantage of Healthcare Marketplace There is a distinct market for healthcare services in almost every city in America. By market, we mean that the price for a specific healthcare service is VERY different depending upon where you go for treatment or services. In Kansas City, an upper endoscopy (common procedure for heartburn) at one facility costs $544 and at another it costs $2,580. A knee replacement is $18,375 at one facility and at another it is $59,050.
- Almost every employer is surprised to learn that where its employee receives treatment could affect its bottom line by $40,000 or more. You may have heard about medical tourism – sending people to India to get cheaper surgery for example. The good news is you don’t need to send your people to India – you can send them down the street. In fact, you can even find that when the same surgeon performs an identical surgery at one facility versus another, the total cost varies widely. This variance is due to the complex and often irrational way hospitals and healthcare facilities contract with insurance companies. These complex contracts are costing you tens of thousands of dollars.
- Some people respond to this price differential by saying “well, the more expensive facility is higher quality.” That statement is an assumption and often false. In fact, better facilities are usually more efficient and can often have the lowest price. Almost no hospital or surgery center can justify higher prices based on objective evidence of superior quality. Solution: Incentivize your employees to use lower-cost healthcare when possible. It does not need to mean a decrease in quality. By using smart health plan design and pricing transparency you can correct the problem.
- We know that better plan design can incentivize employees to make higher value, lower cost care decisions. The large variation in prices makes it possible for those choices to result in large savings for the employer and the employee. But where are the prices listed? Price information is very difficult for the average employee to find because providers and insurers agree not to share it with the public so it will become available to its competition. However, forcing providers to compete on price is the best way for employers to push the healthcare market in the direction of higher quality and most cost effective care. While carriers and providers are still years from true providing true cost transparency, we have access to a third party database of over one billion (or a million million) claim pricing points for all types of procedures in the U.S. Thus, our clients now have access to this powerful price transparency (See example 3). Employers that take advantage of this information are saving money while promoting a more cost effective healthcare at the same time for their employees. Solution: Provide comparative price information for employees that is: (1) targeted to their specific needs; (2) timely; (3) easy-to-access; and (4) given in conjunction with other support services that allow them to take advantage of the potential savings. There are multiple third party providers that are able to healthcare pricing database If you do, you can expect to save you over $625 per employee per year on your health plan costs.
- The prescribing habits of most physicians are not rooted in clinical and cost effectiveness. In the exam room, when the doctor pulls out the prescription pad and scribbles out a medication, often he choose an expensive brand name drug when an equally effective generic is available. The current multi-tier Rx structure provides some initial incentive to choose lower cost medications, but patients and doctors need more cost-conscious decision support. Some PBM’s have on-line cost comparison tools, but fail to interact with the patient and doctor in a meaningful way to actually change the prescription to a lower cost option – leading to unnecessarily large pharmacy spend. Solution: Provide employee with medication cost comparisons and work with the patient and doctor office to get the prescription changed to the higher value.
- Example of how Pharmacy Price Transparency is critical.Patient diagnosed with high cholesterol (Lipitor), depression (Effexor), and heartburn (Protonix) (often seen together).Most patients are unaware that there are every effective generic medications to treat these conditions. A patient with all three of these problems would save almost $4,000 a year by switching from brand name drugs to generics.It should be noted that in some cases, the brand name medication may be the best option. For some patients, it may be more effective or have lower side effect profile. For many other patients, however, the appropriate use of brand name drugs can decrease overall healthcare expenditures. With asthma, for example, following recommended guidelines could mean using a combination of pills and inhalers that cost $3,300 a year. The result is better controlled asthma which means fewer ER visits and hospitalizations. A typical three day hospital stay can cost $20,000 – more than the cost of a year’s supply of medication.
- Navigating healthcare is complex and confusing. Doctors and hospitals are paid on a transaction basis where the economic incentives motivate a “revolving door” approach to care – one patient out, next patient in. The patient is unequipped to protect his interests – let alone understand the care being provided and the related costs. While industry leaders agree the center of focus should be the holistic care of the patient, the industry has been slow to react, and patients are left alone to battle the system. The result is that employers must find a “medical home” – a health pro if you will – who can focus on care coordination to ensure successful results and cost containment. Solution: Provide your employee a medical home that includes everything from cost and quality guidance, doctor selection, explanation of care options, scheduling appointments, obtaining medical records and reviewing bills. Net result is better care for less money.
- You need to provide Relevant Provider Quality Information Recently, one of our members asked for knee replacement pricing. This 57 year old male had two doctors in mind, both recommend by his internist. We performed a quality review even for a pricing estimate. We uncovered anger management problems, disciplinary action by a hospital and punitive action by the state against one of the doctors. The lesson? Many doctors (and neighbors and coworkers rely on hearsay and dated information for physician recommendations. Thorough quality checks are essential to protect yourself and your health.
- Employees demand more than comparative pricing for a procedure or service. For cost comparisons to be effective, they must be combined with quality of service data.Quality data and definitions in healthcare are extremely complicated and controversial. Hospitals use relatively generic indicators provided governmental regulators such the Joint Commission on the Accreditation of Healthcare Organizations. Physicians, on the other hand, are largely unmonitored so consumers must rely on certification societies, hospital associations, state medical societies and hearsay to make a quality decision. You must improve the quality gap by ensuring that a physician is board certified (many are not), is associated with reputable hospitals, and is not part of a pending or adverse malpractice lawsuit. However, the key for your employees is to go beyond these baseline checks to understand referral patterns, past customer experiences, and personality fit. With this information, the employee has confidence to go to a lower cost physician – even though his friends may never have heard of her (the usual “quality check”). Solution: Provide your employees with profiles of physicians who can meet your employees’ specific needs – Board Certified – free of disciplinary action, certain type of bed manner, competent, courteous office staff, same day/next day appointments. Net result is satisfied patients.
- Given the complexity of the healthcare system, it is almost impossible for employees to possess the expertise needed to gain the most value from a healthcare experience. In addition, employees must be prepared to overcome the intimidation of cost and quality discussions with their physicians. Expert support to navigate the healthcare system is essential to cost effectiveness of benefit plans. From finding high value doctors to identifying surgery centers and hospitals that meet the cost and quality demands of employees, each step is guesswork without expert guidance. You need to partner with a third party that has a team of healthcare insiders to support employees with personalized, step-by-step guidance. You don’t just want a website with data. You people need live healthcare experts to coordinate care and problem-solve. To maximize that guidance, you need to partner with a company that provides employees with the cost and quality information necessary to make a cost-effective healthcare decision. While the healthcare industry has talked about transparency, the availability of quality and pricing information to the consumer/patient has proved to be difficult. Why? Simply put, payers and providers sign contracts that require fee schedules to be kept confidential to protect the information from competitors. Numerous companies (Compass Health Services for example) have broken through this historic barrier with knowledge of provider contracting and access to hundreds of millions of actual medical claims. With this data and the ability to interpret it, these companies can compare actual reimbursement rates between providers. This is the essential link to the healthcare value chain. When exposed, the true inefficiency of the network contracting model and the healthcare industry becomes a tremendous opportunity for employer cost control.
- Simple cost-conscious healthcare decisions have a significant effect on overall healthcare utilization. The key to unleashing the savings opportunity is enabling employees to act on cost comparison information. By using the cost comparison and provider-quality data, you will cut your healthcare spend by at least 10% and $625 per employee per year. If you follow this path, you know how to make your plan affordable for all parties; share financial responsibility for medical services; provide coverage for catastrophic events; and provide support to your employees to find the best low cost care.
- As far fetched as you think lowering costs may be, I hope by the end of this presentation you will see that this is a real possibility