Leverage transparency to reduce health care insurance overspend

By Higginbotham on May 14 , 2015


Tired of paying for group health insurance increases every year? While many variables are out of your control, there is one thing within employers’ control: pricing awareness.

The Gary and Mary West Health Policy Center reports, “Providing patients, physicians, employers and policymakers more information on healthcare prices could reduce U.S. healthcare spending by an estimated $100 billion over the next decade.”

Transparency shifts greater responsibility to employees.

Do you know that pricing for the same procedure can vary as much as 267 percent within the same metropolitan area? To lower your costs, insist insurance carriers offer price comparison tools and teach employees to use them.

Unfortunately, most people spend a mere 19 minutes choosing a health care plan. Require that insurance carriers provide clear plan comparisons written in everyday language, and walk employees step-by-step through their health care options. Use this time to shift employee focus from premiums and copays to their responsibility to keep costs down through cost effective choices.

Physicians rarely know what tests cost when they order them for patients. Urge employees to trim the fat by asking about every cost in advance: office visits, procedures, surgery, tests and medications. Teach them to challenge repeated tests and request lower cost options from their doctors. Counsel employees to use urgent care clinics or tele-health services versus the emergency room when kids have the flu or a fever.

You don’t have to be the bad guy.

Transparency can reverse the adversarial role typically forced on employers when they must pass along higher premiums to employees. Show employees you are absorbing the greater share of health plan costs. Help them understand the correlation between the fee their doctor charges the insurance company and higher insurance premiums passed along to them. Empower employees to ask doctors not only what their personal fee is, but also what they charge the insurance company, and to choose doctors who keep costs down.

Mandate the best transparency tools.

The Catalyst for Payment Reform (CPR), a nonprofit corporation, provides guidelines for evaluating the effectiveness of a plan’s transparency tools. At the very least, a tool should include pricing information for physicians and procedures, be easy to use, offer physician and hospital ratings, identify in/out-of-network options and freely provide access to contracts pricing and other fees.

You can combat rising costs.

In 2013, Towers Watson and NBGH analyzed data from 595 employers with health plans covering 7.8 million employees. Their report identified that “Best performers are more assertive than other employers in taking steps to both improve their health cost trend and help employees manage their well-being.” Read their report here.

Now more than ever, employers have the opportunity to learn where health care costs originate and how to provide the best value for dollars spent. To influence policymakers, consider joining a regional or national employers group like the National Business Group Health Organization, (NBGH), a non-profit dedicated to helping employers find cutting edge solutions through education and networking with other employers. As the Network for Regional Healthcare Improvement (NRHI) states, “measuring and publically reporting the quality and cost of care gives all stakeholders a better understanding of how to improve the system.”

Above all, take aggressive action to control the options within your control. Educate employees to manage costs, demand low cost/ high value options from insurance carriers and join efforts with other employers to leverage your influence in Washington.

Searching for smarter group health care options? Contact Higginbotham Insurance.

Tags: Employee Benefits