The Big Problem 

Most members of the C-suite, along with benefit and business managers, spend an inordinate amount of time trying to combat health care costs. Yet, what do they really know about the key dynamics of the cost drivers?  

  • Do they know that while employer costs have risen over 40% in just the past nine years, the stock pric­es of many large insurance com­panies (that claim to control costs) have risen as much as 500% during that same time?  
  • Are they aware of the extreme range in reimbursements that different providers receive for the same pro­cedure within a 5O-mile radius of most ZIP codes?  
  • Do they understand that while con­sumers presume that higher costs mean better quality, there is not ev­idence to support that belief?  

In our efforts to promote consum­erism with health savings account (HSA)-qualified plans, we’ve failed to recognize that shopping for health care is like shopping for groceries without prices on any of the items and a “no returns or exchanges” policy. Is it any wonder that medical bills are still the No. 1 cause of personal bankruptcy, even for those with health insurance?  

We have accepted the fact that quality in health care will always be im­possible to measure, health care costs will rise each year, high discounts mean greater savings (even though we have no idea the relative value of the service) and it’s OK to be unable to determine the price of a service before we incur it.  

If that seems as absurd to you as it does to me, ask yourself: “What happens if we disrupt the traditional purchase of health care with a more transparent model that incentiviz­es members to choose lower cost/high-quality care?’’  

Workable Solutions  

Let’s take a closer look at how you can create a “disruptive” or transfor­mational model.  

  • Begin with self-funding your health plan. While a fully insured plan does not entirely preclude you from us­ing disruptive strategies, self-fund­ing provides much more flexibility to design strategies that work best for your company.  
  • Add a strong primary care partner. Establish your own on-site clinic or share one. If that’s not possible, consider a nearby convenience care clinic or direct primary care group. High-quality primary care delivers the right care at the right time for the right price.  
  • Strongly promote telemedicine. Telephonic/video care is inexpen­sive and convenient, with high em­ployee satisfaction rates.  
  • Identify high-value providers(HVPs). These are providers who embrace transparency and offer quality services at reasonable cost.  
  • Whenever possible, negotiate pric­es based on bundled pricing rather than unit costs for each CPT code.  
  • Design incentives to invite mem­bers to make smart choices. HVP prices should be considerably low­er than the average cost in your geographical area, so consider of­fering HVP services at no cost to members.  

After building the model, you’ll need an effective means of communicating it to members. Personal care naviga­tors can take customer service to a new level by engaging members at the time they need care. All the member needs to do is call the care navigation team, and they’ll do the rest by help­ing the member understand their plan and their choices, often leading them to free or low-cost options.  

The status quo is not sustainable, nor should it be acceptable. Health care has no incentive to change itself. Disruptive solutions are on the rise, as are the providers who make them pos­sible. You can be a part of the trans­formation, or you can stay mired in the current problems. The choice is yours, but remember the saying: “If you don’t change your direction, you may wind up where you are headed.”  

Sara Hames, is CEBS Director – Disruptive Strategies at Hays Com­panies in Milwaukee. This article is a summary of her comments to the International Society of Certified Em­ployee Benefit Specialists in 2019. The complete version can be found online at  

Reprinted from the First Quarter 2020 is­sue of NewsBriefs published by the Internation­al Society of Certified Employee Benefit Spe­cialists. With the exception of official Society announcements, the opinions given in articles are those of the authors. The International So­ciety of Certified Employee Benefit Specialists disclaims responsibility for views expressed and statements made in articles published. No further transmission or electronic distribution of this material is permitted without permission. ©2020 International Society of Certified Em­ployee Benefit Specialists  

Sara Hames

Sara Hames

Sara Hames, is CEBS Director – Disruptive Strategies at Hays Companies in Milwaukee.

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