by Justin Leader
justindleader@gmail.com
Do you remember the last time you were not bound to use an in-network physician? What if this very thought, of “in” versus “out of network” never existed to begin with? What if you could just go to any doctor or specialist you choose from? What if doing so perhaps cost you less money, or even cost your employer less money at the same time? Does this sound too good to be true? It’s not.
It is my opinion that the healthcare industry in this country is about to evolve at a geometric rate of speed. There has been far too much waste for far too long. Frankly I believe that corporations as well as those they employ are in a perfect position to revolt against this as long as they are informed and have the appropriate consultation along the way. Reference based pricing is the freedom that many have been waiting for. Imagine if you will, a world in which there is a fixed cost that will be paid for medical services. Imagine that the fluctuation in pricing from doctor to doctor and hospital to hospital was finally negotiated in such a matter that it made actual sense. Imagine that the major disparity in pricing from various providers was eliminated. Imagine that you were not bound to a contract promising discounts for services that were fabricated. Imagine transparency.
A study in 2014 by the employee benefits research institute found the following; “Potential aggregate savings could reach $9.4 billion if all employers adopted reference pricing for their health care services.” Lets take this one step further with a 3000 life group we recently examined in regards to their combined health/RX plan. By simply carving out the drug plan into a transparent PBM model we found over $1,000,000 in savings. To quote Dr. Evil “1 Million Dollars.”
We work with a few firms nationally that audit medical bills, hospital bills, and healthcare/RX claims. The obscene amount of waste, variance in pricing and absurd up-charges is enough to make any sane persons head spin, and ask why? Simply put we have for far too long taken the power out of our own hands and placed it where it should not be. That is, the hands of the Healthcare companies, PBM’s and hospitals who continue to play this lucrative game of poker. They’re destroying our healthcare system, pillaging the very foundation of what keeps them in business, and not doing a single thing to mitigate the issues that pound all of us, employer, employee, citizen into submission both financially and mentally. We have in a sense created our own “make-believe” chains that bind us to these entities.
The good, no wait, the great news is that a few progressive minds across the country are changing the way our industry works. They are uniting and the result is going to be a big wake up call for the way that business has been done for years. Acting as a fiduciary you will see a few pockets of resistance to the “good ol’ boy” way of doing business. You will see employers taking the power back, employees being empowered and in doing so major reductions in wasted spend. I am not sure if these individuals are visionary or perhaps just pissed off at the way people have been taken advantage of.
There is no better time than now to start these conversations with your brokers, consultants and internal counsel. If at this point you are hearing about reference based pricing for the first time, or you have to bring up the topic to your broker, then I would suggest it’s time to consider working with someone else. This business is not about reaction anymore, it is about being as proactive as possible. It’s about disruption in such a way that benefits the people that it should have been benefiting all along. You.
Justin Leader is Vice President of Business Development with Benefit Design Specialists, Inc. BDS is committed to a two-fold goal; delivering quality, cost-effective employee benefit plans coupled with hassle-free benefits management for our client’s HR departments. Transparent Health, By BDS is a solution that drives down Healthcare costs while giving complete investment transparency.