Another major insurance carrier has cooperated with selected healthcare providers in two states to introduce a bundled payment program for maternity care. Like bundled payment programs used by Medicare and commercial carriers for total joint replacement, the bundled maternity program reimburses the care provider for an entire episode of care, including prenatal, delivery and postpartum services, with one overall fee. Insurers are encouraged with the positive outcomes, citing early access to care and open lines of communication as significant advantages of this approach.
Some mega-employers manage clinics on their own while others outsource to clinic vendors or healthcare systems. Many provide clinics within their own facilities, but some offer near-site locations and even share a near-site clinic with other companies. Regardless of which model is preferred, more organizations with 5,000 or more employees are deciding that on-site or near-site clinics can make primary care more convenient and affordable for everyone.
Some of these clinics offer pharmacy services and many have expanded to offer services such as physical therapy, telehealth and even behavioral health. One benefit that clinic operators often emphasize is that by making primary care convenient to employees, and in many cases their family members, fewer employees will neglect primary care because of cost or the inability to take time off to see a doctor.
A fee-based model that gives individuals unlimited access to a primary care physician without their insurance being billed is being heralded as the right prescription for healthcare. Most patient needs, such as consulting, tests, drugs and treatment are included, and no insurance billing is involved.
Sources estimate there are about 1,000 direct primary care practices in the continental United States. While most patients pay for the service out-of-pocket, more and more employers are choosing to offer this as a benefit and sharing in the cost.
TPAs and advisers supporting the trend caution that direct primary care is not a replacement for insurance, but rather a great supplement to an existing health plan. By removing the barrier of costly copays and deductibles, employees can forge a much closer relationship with their doctor, making them far less likely to choose a costly emergency room or urgent care clinic when the need for medical care arises. Direct primary care is an option that is growing and one we’d be happy to talk with you about at your convenience.
CNBC recently featured a story about Walmart and their history of not only suggesting that employees visit Centers of Excellence for surgeries and second opinions but flying them all expenses paid. The case study revealed that between 2015 and 2018, more than half of their employees suffering from spine pain were able to avoid surgery by seeking treatment at Mayo Clinic.
Shorter hospital stays, lower readmission rates, fewer episodes of postsurgical care and a faster return to work were other benefits gained when results were compared to patients who chose other hospitals for treatment. Walmart reported that even though they spent more per surgery at Mayo Clinic than what other hospitals were charging, they saved money because of better outcomes and surgeries that were avoided.
The rule requiring hospitals to post their prices online, which became effective on January 1, 2019, really hasn’t done much to promote cost transparency. The problem is that the price lists, which payers refer to as chargemasters, break common procedures into complex, coded retail-priced components that mean little to the average consumer.
As an example, determining the cost of an ER visit would require knowing the codes and locating costs for all parts involved in the visit. Few people, if any, are familiar with these complex details. While giving consumers price information in an easy-to-understand format would be a big help, it appears that CMS Administrator Seema Verma was accurate when she described this as little more than a “critical first step”.
According to a public-private partnership launched by HHS, the percentage of U.S. healthcare payments tied to value-based care rose to 34% in 2017, a 23% increase since 2015. Fee-for-service Medicare data and data from 61 health plans and 3 fee-for-service Medicaid states with spending tied to shared savings, shared risk, population-based payments and bundled payments were examined in the analysis.
Another recent proposal of the Trump Administration would allow employers to fund tax-exempted Health Reimbursement Arrangements to help pay for an employee’s individual health insurance premiums. In addition, the proposal would also allow employers that offer group health coverage to fund an HRA of up to $1,800 to reimburse employees for “qualified” medical expenses. Easing restrictions in this manner is seen by many as a big boost for small businesses that are unable to provide employer-sponsored healthcare. Comments are being accepted through December 28, 2018 and if approved, the new rules would apply for plan years beginning on or after January 1, 2020.
The International Foundation of Employee Benefit Plans reports that individuals enrolled in employer-sponsored healthcare plans are now paying an average deductible of $1,491 for individual coverage and nearly $2,800 for family coverage. These numbers are up from $1,300 and $2,500, respectively, in 2016.
Individuals covered by HDHPs have average deductibles of $2,296, with families averaging $4,104 – more than twice the averages for traditional, non-high deductible plans. The online survey included nearly 700 U.S. members of IFEBP and was conducted in February.
In an effort to take control of their healthcare spend, more employers continue to move to self-funding. But as those who have used this funding mechanism for some time have learned, designing a self-funded health benefit plan is just the beginning. When a health plan is self-funded, the entire healthcare supply chain is unbundled, giving everyone a clear, unobstructed view of the healthcare spend. An experienced Third Party Administrator will help you identify exactly where your healthcare dollars are going. Providers can be evaluated. Opportunities to achieve quality outcomes and lower costs can be explored. Best of all, unlike fully-insured health plans that are carrier-based, employers who self-fund their health benefits have the flexibility to act.
Target Cost Transparency
According to the Centers for Medicare and Medicaid Services, healthcare costs have increased by more than 260% since 1999. One of the biggest problems is costs for the same service can vary drastically from one provider to the next, even when the providers are located in the same marketplace. One way to attack this problem is with Reference Based Pricing, which typically allows qualified self-funded health plans to pay for medical services based on a percentage of Medicare, rather than by applying a percentage discount to a facility’s billed charges. Using an accepted index such as Medicare has enabled a growing number of health plans to bring cost transparency and consistency to hospital billing, since Medicare sets prices for every procedure.
Communicate with Purpose
From mobile cost transparency tools to telemedicine, employers are doing more than ever to help plan members utilize their benefits. Engagement rates, however, often tell a disappointing story as many employees are reluctant to use these new features. Experience tells us that whether we’re talking about a published provider directory or an online member portal, most people are confused by healthcare coverage.
Whether your company decides to place colorful posters in gathering spots, hold employee meetings or distribute email newsletters, emphasizing the steps you’re taking to make healthcare more accessible and affordable is critical. In this time of full employment and intense competition, health benefits can play an extremely important role in attracting and retaining valued employees. Don’t miss this opportunity to enhance your company culture and improve your employees’ quality of life.
The healthcare landscape is changing as providers increasingly offer virtual care options, and naturally it’s taken some getting used to. A recent study by the Deloitte Center for Health Solutions found that while patients who have used virtual care reported a 77% satisfaction rate, only 44% felt that their wait time was reduced compared to an in-person office visit. Some offices are designating doctors for virtual care on specific days of the week to circumvent wait times caused by healthcare professionals bouncing between in-person and virtual patients.