OUR SolutionUnparalleled Cost Savings For Businesses
How can I save my company 20-30% on my health spend WITHOUT increasing health benefit costs?
THE PPO BANDWAGON
PPO Price Fluctuations for the Same Medical Service
Inflated Billed Charges
The PPO model where employers pay for medical claims based on discounted billed charges demands further scrutiny. While a discount is helpful in controlling costs, the amount of the billed charges is almost always inflated, and oftentimes grossly.
A hospital’s charges and an insurance company’s negotiated discount are arbitrary figures that can fluctuate widely within the same geographic area.
In some instances, the provider’s chargemaster contains billed charges marked up by as much as 2000 percent, raising the question if a 40 percent discount off inflated charges provides the best value for employees.
Limited PPO Flexibility
– Increasing Premiums for Employees
– Inability to Customize
– Limited Transparency
– Lack of Insight into Health Plan Utilization
At renewal each year, you face double-digit cost increases from your PPO. The rate hike, along with the inflexibility and lack of transparency of the model, leaves you without a lack of options.
Up To 2,000% Mark Ups
An independent study conducted by Castlight Health, a San Francisco-based healthcare price transparency company, shows wide variations in PPO allowable amounts for common procedures that are sometimes five-fold within the same geographic area.
Additionally, the Centers for Medicare and Medicaid Services (CMS) gathers data from hospitals on the actual cost to deliver services.
For employers interested in a better understanding of billed charges, the data can be compelling.
TURNING THE TIDE
Transforming Your Business
Taking self-funded health plans to the next level
Employers on self-funded health plans can make even greater strides in reducing their healthcare expenditure by using a reference-based pricing cost-containment solution.
It’s been identified as a top trend in 2017 by Wells Fargo, and it’s recognized for its cost-saving benefits and transparent view into healthcare expenses.
Reference-based pricing empowers employers and enables them to transform their bottom line with costs savings upwards of 30 percent.
How it Works
One of the most powerful benefits of reference-based pricing is how it restores control to employers and their employees.
The health plan documentation plan defines pricing limits upon which claims will be paid, ensuring that fair prices are paid for medical services.
A reference-based pricing solution is a bottom-up approach to healthcare charges that starts with the actual cost amount and adds a fair profit margin to calculate the bill.
This is contrary to a PPO model, which starts at the top with a potentially inflated price from a facility’s chargemaster and offers a discount.
Reference Based Pricing
Cost Savings: Beyond the savings gained from starting at cost and going up, self funded health plans are administered by a third party administrator (TPA) and oftentimes, those TPA’s allow for plan customization that support cost containment goals.
Legal Advocacy: For employer health plans and their employee members, it’s important to select a provider who provides expert legal backing.
Direct Relationships: Building bridges between employers and hospitals helps to make healthcare a community-centric solution that supports open dialogue between patients and providers.