Dear health benefits leaders:
Many of you are prepping your families for the new school year ahead, an annual tradition filled with back-to-school checklists and mixed emotions. As a former student, you know the initial weeks of class are back to the basics.
As we approach
Consider a health benefits version of Einstein's definition of insanity: accepting the lie that affordable healthcare is unattainable. Meanwhile, you surrender to a double-digit renewal increase, hoping costs magically level out in the coming year. This is as pervasive as it is detrimental.
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Combating this madness mandates that you
A - Aligning incentives is impossible.
B - Buying claims for less is a pipe dream.
C - Consumerism can't be fixed.
Let's unpack this lesson one letter at a time, starting with
No doubt, the system is broken. But it is fixable. What we need to do is pay advisers a flat fee with a percentage-of-employer-savings bonus. Also, our clients need to get hold of their healthcare data and self-fund.
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Another winning strategy is to institute direct primary care (DPC) so providers aren't motivated to "churn and burn." This way, you'll get happier physicians and patients. And now for the boldest move of all: zero out copays and deductibles for visits to high-value providers within a reasonable distance.
Aligning incentives is doable, and the rewards are astronomical.
We need to think about paying less for claims. When armed with plan data, direct contracting and alternative drug sourcing represent two ways to do this without sacrificing quality.
Direct contracting takes many forms, including Medicare-based reimbursement, capitation (a pre-negotiated, per-member-per-month compensation rate popular with DPC, mental health and cardiology), and bundled pricing (which includes fees for the physician, facility and anesthesiology, along with the cost of any hardware). That last part is standard for joint replacements, maternity care, bypass surgeries and cancer therapies.
Direct contracting allows the payer and provider to enjoy simplified, predictable billing, more efficient care coordination and data sharing. Provider earnings are outcome-based. That means if the care is ineffective or results in unexpected complications, then the provider's time is consumed with addressing the issue, which chews away at their net profits.
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One of the most potent tools for employers is reference-based pricing (RBP), a multiple or percentage of a benchmark like Medicare. Apart from negotiating a lower price, the aim is to ensure that patients won't get billed for any balance between the RBP and provider's retail charges.
And at a time of rising Rx expenses, alternative drug sourcing will go a long way toward cutting spending in this area. Enacting a $0 copay for the most cost-effectively sourced drugs can be done through generic drugs, international pharmacy and J-codes.
Generics are less expensive than brand-name drugs, equally as effective and have a well-known market reputation. Manufacturers are spared the expense of research, development and marketing and can pass those savings onto the employer and member.
International pharmacy programs allow the U.S. market, which pays
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For those of you who are unfamiliar with J-codes, they are the billing code for expensive infusion (injectable or intravenous) medications that identifies the drug, dosage and mode of delivery. J-codes can produce immediate savings when lower-cost, less invasive treatments are tried first, the correct J-code was used and the administration will happen at the least expensive, safe location.
Educating employees about these options will promote consumerism, empowering them to become savvy shoppers who also help save their employer money in the process. But it's also important to instill an understanding of primary care's power to prevent and control disease, the realization that paying high-quality actually costs less and that prices vary by location with equal or better quality.
Consistently deep diving into these topics inspires members to burnish the value of their healthcare. Pairing this education with convenient cost and quality data resources transforms members into informed shoppers. The fact is that patient advocacy eliminates the overwhelm of sourcing value, second-opinion services reduce concerns about invasive, big-ticket, or unnecessary services and manufacturer assistance programs waive out-of-pocket drug costs for qualified members.
The status quo is unsustainable. Medical debt is the leading cause of bankruptcy. Complacency neglects the one in three families who declined healthcare last year due to cost.
But you can change that. Challenge accepted?
