Get educated on the latest in healthcare consumerism and price transparency with hot takes and helpful insights from the experts at MMS Analytics, Inc.

But What About the Carrier’s Tools?

Meme asking "BuT WhaT ABout tHe CArrieR's ToOl?
(The above language is intended to be dripping with sarcasm.)

Do you know how often I hear the above question from brokers who are looking to provide a price transparency tool to their employer groups? So much so that, like a typical millennial, (Don’t worry I won’t say it, but it starts with OK and rhymes with doomer) I decided to make a meme out of it. Now, why does this question get asked? There could be a couple of reasons. The broker genuinely believes that the carrier’s tool is sufficient (concerning) or the broker doesn’t really care about helping their clients, especially those on HDHPs with access to CDH accounts, navigate their healthcare experience (very concerning).

So, what if the carrier you’re working with provides a price transparency tool and they deem it sufficient? Why should you, as the broker, consider this an insult to your intelligence? If the carrier tool was effective at reducing healthcare costs, then you might expect to be presenting employer-partners who currently have that carrier, and their tool, with a lower premium next year due to claims savings from employees using the tool. And secondly, if carriers are committed to reducing their member’s healthcare costs (like they claim), then why aren’t they supporting the charge to eliminate the secret pricing in healthcare and expand the creation/usage of REAL price transparency tools?

Instead, American’s Health Insurance Plans (AHIP) lobbying group recently commented on the latest proposed rule from the Trump Administration, stating, “consumers deserve transparency about out-of-pocket costs to help them make informed decisions about their own care”… so far, so good… and that “transparency should be achieved in a way that encourages – not undermines – competitive negotiations to lower patients’ and consumers’ costs and premiums” Wait, what? Isn’t the intent of transparency to undermine these “competitive” (please, I beg you to note the quotations) negotiations. Transparency of these negotiated rates is for the benefit of the patient, promoting competition among providers for the patient’s sake, not the providers or carriers. This quote naturally raised my interest, and as such, I searched for AHIP’s approach towards price transparency. And found the following;

Protect free market negotiations to ensure more choices and lower costs for consumers. Consumers want to know how much their care will cost them – and we should provide them with that information…Typically, health care providers (hospitals, outpatient facilities, physician groups, or solo practitioners) compete against each other to be included on a health plan’s list of preferred providers…when providers know who the other bidders are and what they have bid in the past, they may bid less aggressively, leading to higher overall prices.”

So AHIP is trying to say that releasing their negotiated rates are going to lead to higher costs? Because they (hospitals, outpatient facilities, physician groups, or solo practitioners) compete against each other to be included on a health plan’s list of preferred providers. CMS and consumers want providers instead to compete for their business by making healthcare a free and open market, not just for insurance carriers but for all.

Let’s say that AHIP is right and some providers DO raise their pricing to match the highest cost provider in the first year. What do you think happens in year two when patients have abandoned the higher cost providers in favor of high-quality, lower-cost providers instead?  Will the same trend occur? Or will the free market balance itself, as it has for literally everything else? I think we all know the answer to this one.

Like any functioning business, carriers want to grow their revenues. Given that carrier’s primary source of revenue is premiums or the price of risk transfer and they want to “win” on their bet of pricing risk, carriers want to make sure that the premium collected covers the cost of the claims to be paid out.  What makes a group riskier? Either the increased price of services received or increased utilization of services. Given group’s utilization operate within a +/- 3% year over year, the only lever that can really impact premium is the price of procedures and services. Therefore, higher prices of services, higher risk, higher premiums. Why would a carrier want to expose low-cost providers to their consumers, if it will have a direct impact on their top and bottom lines? And don’t get me started on the dysfunctional MLR rule, which sets the ratio of claims to profit/admin at 80/20. Rather have 80/20 of medium pizza or a large pizza pie?

If AHIP wanted to assist employers and employees in finding low-cost, high-quality care, they could do so overnight. They know the negotiated rate for every procedure at every provider because they, in fact, negotiated these rates. But it would cut their revenues by more than half. And we all know, carrier’s revenues come in the form of your employees’ wage growth, affordable healthcare, and ultimately, financial well-being.

Invest in a price transparency platform that has no bias, and whose ultimate goal is to drive down costs for employers and their employees. Invest in a platform whose performance is contingent upon how much they saved you, not how much you spent. Invest in a platform whose sole mission is to ensure that you never overpay for healthcare again.

Seven Cost-Saving Solutions That Reduce Healthcare Costs

According to the 2019 October Department of Labor inflation report, healthcare costs rose 4.3 percent year-over-year, surging to the highest levels in three years. The increasing cost of hospital services and rising drug costs are to blame for this surge, making healthcare costs the fastest growing sector in the economy. 

If a 4.3 percent increase doesn’t sound like a lot, consider this…growing the $3.6 trillion the US healthcare spend by 4.3 percent adds an additional $155 billion to the cost of care. For perspective, with a $155 billion, we could double the budget of the US Department of Education, fund almost four months of interest on the national debt, or a personal favorite…let Americans keep that money in their wages, HSAs, investments, or retirement savings for something else. 

According to the Kaiser Family Foundation, the average 2019 family healthcare premium reached $20,576 for the first time, with workers contributing $6,015 towards that premium and employers picking up the rest. Next year, premium costs could increase by another 5 percent (based on the projected CPI) to $21,604 as healthcare costs continue to outpace wage growth and inflation. These out of control healthcare costs are eating our paychecks and robbing both employers and employees of their financial security. 

Fortunately, intrepid employers and their employees don’t have to accept the status quo. Instead, they can push back on rising costs and stop overpaying for healthcare. Here are seven cost-saving healthcare solutions worth considering:

7 Cost-Saving Solutions to Reduce Employer Healthcare Costs

Analyze prior year claims information to unlock potential savings opportunities and develop cost reduction programs for employees. Your broker should be doing this anyway, and if not, ask why? Where are employees going for care? Which providers are the most expensive? Which procedures are driving your claims costs? How much of your claims spending is shoppable?  

  1. Analyze prior year claims information to unlock potential savings opportunities and develop cost reduction programs for employees. Your broker should be doing this anyway, and if not, ask why? Where are employees going for care? Which providers are the most expensive? Which procedures are driving your claims costs? How much of your claims spending is shoppable?  
  2. Get multiple quotes for health insurance and consult with a new broker. Speaking with multiple brokers allows you to get competitive quotes and incentive your current broker to ensure you’re getting the best plan for your money.
  3. Offer an HSA-qualified health plan. These plans provide lower premiums for employers and employees while encouraging employees to maximize their HSA benefit by reducing healthcare spending. HSAs are triple-tax-advantaged for employees and help them not only pay for care today but invest unspent funds for future medical expenses.
  4. Include a price transparency benefit for all of your HDHP-enrolled employees. Price transparency tools empower employees to make more informed care decisions by utilizing high-quality, lower-cost providers to reduce healthcare expenses. Shopping for care lowers medical claims (potentially reducing premium costs) and increases HSA balances for the future. This is a win-win for both employers and employees. 
  5. Reward employees who shop for care by depositing a portion of the claims savings generated into a “rewards-enabled” HRA. You may also want to reward employees for meeting other program goals (e.g., wellness, shopping, screenings, etc.). Rewards from actual savings going into a tax-advantaged healthcare-oriented account is a better investment than cash incentives that can lead to overutilization and have the opposite effect of lowering claims cost.
  6. Switch to a health plan design that rewards consumerism. Some of these plans will create significant plan savings and consumer engagement while maintaining the same or lower out-of-pocket exposure for employees.  
  7. Involve employees in the fight to lower healthcare costs by letting them know about what they can do to control costs. Educate your employees on what to ask their physicians when care is needed. Like, is the test/procedure really necessary? Are there lower-cost alternatives? What will it cost? Let your employees know that they, too, have control over rising healthcare costs. Healthcare is never “free,” and it’s not the insurance company that’s paying the bills…it’s the both of you.   

If this is the first time you’ve heard of some of these ideas, then it might be time to fire your broker. Balancing affordable healthcare with affordable premiums for employers and employees is certainly achievable. But capturing those savings requires new thinking when the current methods don’t seem to be working. 

7 Cost Saving Solutions that Reduce Healthcare Costs

Totally Wasted: A Story About Market Failure in Healthcare

Have you ever sat down to go through your personal budget and, as you’re scanning through your purchases, thought to yourself, I could have gotten that for less? You add up all those “could-haves”, and you’re left with a sum at the end of the month that you wish could have gone towards new shoes, or maybe a start of a vacation fund.  At the time of these purchases, when you overpay for a good or a service, you have produced waste within your budget.

My company produces a report that analyzes a group’s healthcare spending in a similar fashion. We don’t adjust if they should have or should not have purchased, but simply, what could they have saved if they had an opportunity to shop for and receive care at the most cost-effective provider.

This report highlights the wild price variation in healthcare by identifying where a patient could have received care for the same exact procedure and aggregating the difference across the entire medical claims history for the group. We title this report Claims Hindsight Analysis, and as the saying goes, hindsight is 20/20, and thus, you’ll never repeat your claims history.

The total identified savings opportunity produced as a result of this report can be astounding. When providing this report to the company’s advisor, I make sure to inform them that this figure is with perfect shopping, 100% of the time, which is idealistic. It’s not possible. Not in today’s imperfect healthcare market. But even if the group were to grab 10% of this opportunity, there would be, in most cases, an ROI greater than 1.

This analysis emphasizes (sometimes brutally) the waste that can take place in healthcare. As reported by the recently published JAMA article “Waste in the US Health Care System”, the total annual costs of waste  in the US totals somewhere between  $760 billion to $935 billion.

As stated by the author of the article, “First, enhancing cost transparency might help. Addressing payment discrepancies between hospital outpatient facilities and office-based practices is crucial and has begun to happen. However, to meaningfully tackle costs and waste, it is necessary to address the high prices and administrative complexity that plague the US health care system, because, as the infamous bank robber Willie Sutton said when asked why he robbed banks, that is where the money is.”

I recently completed an analysis for a potential broker-partner who I want to work with in order to provide meaningful, valuable savings to their clients. It was my first interaction with them, although my team had provided a lunch and learn to their firm almost a year ago. They had reached out to me and indicated that they had a group that could benefit from our platform. To qualify the group, I offered to perform the Claims Hindsight analysis after learning a little more about the employer and their employees. The group is self-insured, with almost 400 enrollees in the New England and Mid-Atlantic regions.

The analysis indicated that almost 2/3rds of the group’s medical spend had been identified as a savings opportunity. That means that the employees are frequently and severely wasting, sometimes egregiously, and could save money by opting for care at high-quality, cost-effective facilities instead. High total waste means high total savings opportunity. That appears to me to be a very good thing.

The advisor did not see it that way. They first indicated that our analysis was inaccurate, or impossible, and that they would not feel comfortable putting these numbers in front of a CFO. So, I went back to my data analytics team and asked them to complete the analysis again. They growled, but obliged.

The results remained the same. 64% of the total spend was identified as total savings opportunity. Now, I want to note, I wouldn’t place this lump sum in front of a CFO without first identifying that this is with perfect shopping (unattainable), but with the right tools and incentives in place, a portion of this waste can be recaptured. It needs to be realistic, for the advisor, for the employer group, and for my company, as that’s the figure we’d be held to regarding our performance.

I indicated that the appropriate engagement and utilization levels can be applied to this figure to provide more realistic savings to be captured. Even after applying very, very low engagement percentages (10%), the ROI for the group could still be 7x, or well over $300,000 in savings as a result of shopping.

And yet still, the advisor informed me that these figures seem inflated. They felt very uncomfortable with these figures and indicated they felt unrealistic. And then proceeded to question the viability of our platform, who are our clients, etc. This may be my own bias and lack of intonation given email communication. Maybe I let the pride I feel for my team’s platform get in the way of addressing her questions and providing real examples of customers who have benefited.

So, what’s critically important about all of this?

I don’t need to inflate these numbers. This is the current state of costs regarding employer-sponsored health care. Prices between providers can vary by 20x. You compound the instances of employees receiving care at high-cost providers, where the price variation is hundreds, if not thousands, of dollars, it’s no wonder how astronomically inefficient and wasteful employers can be.

And of course, as an advisor, I wouldn’t want to share these figures with a CFO client. Especially one who runs a self-funded group. That’s money right out of their pocket. And then the difficult questions arise for the advisor, like “What have you done to control these costs? Why are these costs so high? How are we reining in the waste?”

To continue my story, the advisor informed me that they would like to hold off our discussion, the group is busy with many implementations, no time, no resources, same old excuses I hear time and time again. In the meantime, the employer will continue to overspend on healthcare.

Many of us probably read the reports about the waste in healthcare and think “no duh.” Waste stemming from being ignorant of marketplace price variation is one problem. But what about when  we choose to ignore the potential savings opportunities out of fear of trying something new? This total cost of waste was for one group of only 400 employees. Can you imagine what that must look like when the employee count grows to 1,000? 2,000? But the market’s pricing variation can be the employer groups’ and the advisor’s opportunity for success. As stated by the author, “removing waste from US health care will require both awakening a sleepy status quo and shifting power to wrest it from the grip of greed.”

MMS Claims Hindsight Example

Sample Claims Hindsight Report

Mr./Ms. Benefits Broker, Don’t forget how important You are. (Let me remind you)

Hey Mr./Ms. Benefits Broker,

I know you don’t have much time, given it is the big, bad Q4, after all. I’ve heard the many variations of “Sorry, I am crushed in the 4th quarter” and the “I’m in the thick of renewal meetings, please be patient.” As this isn’t my first Q4 working in the benefits space, I have come to expect these excuses, rolling in like foliage, right around the middle to end of September. But I wanted to write this article because as a broker, your role has become incredibly important. Like so vastly, monumentally, leviathanically important that I don’t think even you realize the potential halos or horns that could adorn your crowns if you don’t do your job well.

I say this because last month, the DOL’s Bureau of Labor Statistics published the Employer Costs for Employee Compensation, a product of the National Compensation Survey. You can find a link at the bottom for your own review. And within it, the survey found that X% of total compensation for employees is linked to benefits. Notice how I say “X”? That’s because I want you to guess before the big reveal. Go ahead, pick a number between 1 and 99. Do you have it?

Within their findings, the Bureau of Labor Statistics found that, on average, (and please, if you believe that by using the term “average,” I’ve grossly misrepresented the cost, and in doing so, your importance, and you believe that you, Mr./Ms. Benefits Broker are, in fact, less important, announce it in the comments below. I’ve been wanting to tell you that for a while now-) benefit costs are 11.8% of total compensation. Almost 1/8th of the cost pie. A pizza pie, if you will, because it’s near lunch. So with that remaining slice of pizza left on the table, therein lies your responsibility, and thus, your performance as an adviser, inextricably linked.

Two things. First, employers are the largest payers in healthcare. Second, employers have an incentive to understand where their money is going. As Ali Diab, CEO of Collective Health stated in a recent podcast “No self-respecting CFO is okay with ‘oh hey man this budget is going up 20%, I can’t tell you why, our broker said it is what it is and you have to pay the piper, you cool with that?’ but that’s what CFOs have been conditioned to accept..”

This doesn’t even address the issue of your fiduciary responsibilities under ERISA (surely a topic worth discussing in detail another time). Have you bothered to brush up on those duties lately? No? This link from the International Foundation of Employee Benefit Plans (IFEBP) – lays them out for you like little garlic knots so you can digest them in six easy bites. [Hot tip: divulge yourself on bullet #3.]

You, Mr./Ms. Benefits Broker, have to be able to tell a CFO every minute detail about the last piece of pizza on the table. They know that wages and salaries are responsible for 6 of the pieces and the government takes the 7th. But you Mr./Ms. Benefits Broker, you have a direct influence on that 8th slice. You can make that serving delicious, delivering more value and, ultimately, savings for CFOs and their employees.

So think about that as you’re trudging through Q4. Let that guide your work ethic. You’re at the table of every CFO’s pizza party. No doubt, insurance carriers and providers can be blamed for that 8th slice, and rightly so. But the solutions are out there, and the perfect sauce of solutions does exist. Ultimately, only you know how well you’ve handled that slice of ‘za. I can only hope CFOs adjust and start to hold their advisors more accountable. For the complacent advisors, I bet you just felt a tinge of apprehension. For the progressive advisors, your time is here.

Good luck with your Q4s. May your clients stay happy.

How a price transparency tool can help maximize the value of an HSA!

Health savings accounts (HSAs) provide employees enrolled in high-deductible health plans (HDHPs), a tax-advantaged way to save and pay for out-of-pocket medical expenses. Combining a price transparency solution with an HSA account allows employees to decrease their healthcare costs by 30 to 40 percent today and maximize the value of an HSA for future medical expenses. Financial experts estimate that the average couple retiring today will need $285,000 to cover healthcare costs during retirement. An HSA combined with a price transparency solution is a powerful employee benefit that improves their lives both today and tomorrow.

The Employee Benefit Research Institute (EBRI) reported that for 2017, the average individual HSA contribution was $2,843, and distribution was $1,725, leaving a year-end balance of $1,118 for future medical expenses.

Our analysts estimate that 30 to 40 percent of healthcare costs are shoppable. Giving employees a tool to compare price and quality before going to the doctor empowers them to make more informed care decisions, reduces healthcare costs, and allows HSA contributions to go even further.

For example, if the “average” HSA individual contributor above shopped and saved 30 percent on healthcare costs, they’d have an extra $518 in their account over someone who didn’t shop in one year alone. With tax-free growth on the HSA investment, those savings could be worth an extra $8,247 in ten years — not a bad ROI for a few minutes of comparison shopping before making an appointment.

Using a price transparency tool to shop for healthcare can reduce yearly HSA distributions and let the savings add up!

HSA Overview

Employees enrolled in a high deductible health plan (HDHP), also called an HSA Eligible Plan, are eligible* to open an HSA account. If the name “high deductible” scares you or your employees, it shouldn’t, as these accounts are a great way to lower healthcare costs.

HSAs offer a tax-advantaged way to pay for qualified medical expenses (e.g., deductibles, copayments, coinsurance, and some other costs, but not premiums). With an HDHP and HSA, employees may be able to lower their overall healthcare costs in the form of premium and out-of-pocket expense savings.

Both employers and employees can fund an HSA using pre-tax dollars. For 2019, the minimum plan deductible needed for an HDHP/HSA Eligible Plan is $1,350 for individuals and $2,700 for a family. For 2020, the minimum deductible increases to $1,400 for individuals and $2,800 for a family.

For 2019, employees/employers can contribute up to $3,500 for individual coverage and $7,000 for family coverage into their HSA. In 2020, the IRS limit increases to $3,550 for individual coverage and $7,100 for family coverage. People 55 or older are eligible to make an additional $1,000 catch-up contribution per year into their HSAs.  

HSAs roll over unspent funds to the following year and are “portable” if/when an employee changes employers. HSA contributions may earn interest or be invested (in mutual funds, etc.) where earnings and withdrawals are non-taxable when used for “qualified” expenses. There’s no tax on contributions, no tax on earnings, and no tax on qualified withdrawals…that’s a triple tax advantage!!!

Why price transparency is needed

Seeking out high-quality, lower-cost providers when non-emergent care is needed lowers overall healthcare costs and allows HSA dollars to go further. But unfortunately, healthcare prices are almost never posted anywhere, making it nearly impossible for consumers to compare provider prices and quality before making an appointment.

Massive pricing variations in healthcare are common. Secret deals between providers and insurance carriers have created a healthcare marketplace where the cost of even a routine medical procedure can vary 1,000% across providers in the same market. 

Need a lipid panel (cholesterol test)? That might cost $15 at one provider and $240 at another just a half-mile away.  Total knee arthroplasty? Would you rather pay $2,268, or $18,477? Heading to the hospital for a few stitches after accidentally testing that fillet knife on a finger? Turn left at the light, and urgent care will charge you $132 to stitch you up, or turn right and pay $1,850 at the hospital. Ouch! Without prior knowledge or price transparency, consumers remain unaware of the cost of care and can waste thousands of HSA dollars a year by overpaying for care.

With a price transparency solution like MyMedicalShopper, comparing and selecting a high-quality provider for over 10,000 unique tests and procedures is as convenient and easy as a Google search. Consumers are accustomed to shopping for everything on their phone, so why should healthcare be any different? Having real-time price and quality information helps consumers make more informed care decisions, reduce their out-of-pocket expenses, and budget for future medical expenses.  

How price transparency tools work

  • Your physician wants you to get an MRI as a result of nagging pain in your arm from playing too much dodgeball.
  • While still in the examining room, you pull up your price transparency tool on your smartphone and search for local providers.
  • In under a minute, you find multiple imaging centers in a 10-mile radius, including one that’s $1,457 less expensive than the one in the hospital your doctor recommended. 
  • You share this information with your doctor and decide that the one a mile away is just as good as the hospital, so your doctor sends you to the imaging center.
  • Congratulations, you just saved $1,457 in your HSA for a future expense and still received excellent care.

By making more informed decisions and not overpaying for healthcare, HSA users have significantly more tax-free savings for future medical expenses, including retirement.

Without price transparency, a single decision on where to go for care could waste thousands of dollars and erase a significant amount of an HSA’s balance. Give your employees a benefit that they’ll appreciate today and thank you for tomorrow.  

*Check IRS eligibility guidelines

The Bystander Effect and the Employee Benefits Broker

I’m pretty sure everyone has at least heard of the show Seinfeld. Do we remember the finale of the series? The gang ends up arrested, imprisoned, and go through a trial as a result of a duty to rescue violation that requires bystander to help out in such a situation. To remind you of the scene, the group witnesses an overweight man getting carjacked at gunpoint, and instead of intervening, they crack jokes about his size while Kramer films it all on his camcorder, but then proceed to walk away as passive bystanders. The victim noticed their presence and told the reporting officer, who subsequently arrests them. In a similar vein, I could have used the death of Princess Diana to highlight the inaction the following paparazzi, but l’espirit de l’escalier.

Sometimes referred to as the bystander effect, it is defined as a social psychological phenomenon in which individuals are less likely to offer help to a victim when other people are present. The greater the number of bystanders, the less likely it is that one of them will help. Alongside the market performance of any company within the healthcare sector, it is alive and well in the employer-sponsored health insurance market.

Article after article is published, whether it be in JAMA, ProPublica, or KFF, that outline the unsustainable rise in healthcare costs year over year and the monumental impact of healthcare costs upon employers and their employees. Often, providers, Big Pharma, medical device makers, and carriers, AKA the “bad actors”, are called out, as they are grossly benefiting from this abnormal, dysfunctional market.

But isn’t there another party that we fail to mention within these articles who benefits from these bad actors, who quietly go about their business, and gain from the previous trends above?

If you haven’t figured out who I am referring to, it’s the employee benefits broker. But not all of the brokers out there fall into this category. It’s the unenlightened, status-quo-adhering, progressive-averse broker (UEBA). I’ve been communicating and working with this group of professionals over the past 15 months, in an attempt to provide a healthcare system navigation solution within the employer group space. This communication began because I joined a start-up who has excelled at providing an experience for the employee, employer, and broker that assists in the optimal course-plotting through the healthcare system labyrinth. It’s the power and strategies that are available to these key stakeholders that my company looks to highlight and deploy to drive positive, cost-cutting change.

From strategizing, designing, and quoting renewals to receiving enrollment and employee benefits survey feedback, advisers are constantly on the move for their clients (at least according to their response rate to me). But when we begin to discuss results for their clients, the UEBA generally benefit, no matter which way the pendulum swings. Employers expect bad news, with a rate increase ranging from 5% up to 25%, and yet the UEBA has tended to stick around. Imagine how pleasantly surprised parents would be when their child informs them that they failed a class, only to learn later that they received a C. Not too shabby. But, and I think everyone would agree, not too shabby is no longer acceptable. Or tenable.

You know who has seen first-hand the unsustainable rise in healthcare costs over the past 20 years, and who has labeled themselves as simply the bearer of bad news? The UEBA. They have been silently (whether passively or not) complicit in the rise of healthcare costs for employers. They have believed that someone else will take care of this issue and help the victims.

The benefits industry talks a lot about its efforts to control healthcare costs, but nothing is happening. Financially it makes sense since health and benefit providers have done exceptionally well as healthcare costs, and therefore, premiums have increased.

Now I know that there are advisers who strive to deliver savings, who refuse to accept the status quo and aim to provide the best results possible year over year. Are they the majority? I would say they are growing daily. They are the enlightened, status-quo defectors, progressive brokers (EEBA).

There is an opportunity for redemption for the employee benefits broker community as a whole because of the EEBAs. They educate their HR leader clients. EEBAS give them all the information they have access to regarding health & benefits. EEBAS pound the messaging into every corner of the employer community. This cost trend is not sustainable. The math for future generations does not add up.  And I fear to see what the tipping point could look like if the EEBAs cannot shepherd us to sustainability – Healthpocalypse??

To become a doctor, physicians must take the Hippocratic Oath. An incredibly significant component of the oath highlights “First, Do no Harm.” Given the abuse that employer groups have faced over the last decade regarding healthcare costs, shouldn’t brokers be held to a similar code? That they will abstain from all intentional wrong-doing and harm and apply, for the benefit of the sick, all measures that are required, avoiding those twin traps of over-treatment and therapeutic nihilism. (That’s a fancy way of saying, don’t overwhelm clients with solutions, just deliver the best solutions possible, and leave it at that.)

EEBAs have already, or would, agree to something like the messaging above, but it is the UEBAs that must be converted. And the conversion is occurring. Since I joined this space, I’ve seen more willingness to engage in active problem-solving and root cause analysis to address and attack this unsustainable cost curve. No longer can employers accept the bad news.

I commend the EEBAs who strive to deliver cost-saving measures. Who are resourceful in their strategies and fiercely determined in delivering the best consumer experience for their employer and employees. Who fight for what’s right and look to engage and educate employers about their healthcare costs, and tactics they can deploy to overcome these cost burdens. Employers can no longer accept the bad-news from the UEBA, and must transition to the EEBA, because the EEBAs will lead them on the path to savings.

“We cannot solve our problems with the same thinking we used when we created them.”- Albert Einstein

Benefits that Benefit All

As a relatively new entrant into the workforce, I feel confident expressing that there are opportunities for improvement when it comes to benefit plans and the consideration and impact on current and future generations – specifically, health plans. (And of course, I feel confident expressing myself. As a millennial, I’ve been told that I’m allowed to express myself anytime, anywhere.)

Everyone is bound to require medical care and services. And yet, the majority of health plans offered to me don’t actually provide benefit to me. They punish me. It doesn’t add up – the extra premium I pay doesn’t benefit me, but rather benefits those individuals in the plan who are ill and need to get healthy. I don’t resent those individuals. I just want it to be fair. I just want everyone to be a winner ;).

I’ve been working in the healthcare industry for a short period of time, but it’s clear that the impending doom of year over year price increases ad infinitum has us on the path to a breaking point. I know, with a pretty high degree of confidence, that unless a radical change occurs within employer-sponsored health insurance, millennials and Gen Z are going to be drowning in future healthcare costs without a financial life preserver. Rising healthcare costs and price increases continue to outpace wage and GDP growth, leaving us with less money to spend today and invest for tomorrow. We can’t let the healthcare costs rob of us our future.

82% of employees perceive medical costs as their biggest challenge today and in retirement. And I can guarantee that this number will not decrease. But it doesn’t have to be this way, and we can change it. We must take full advantage of the tools and mechanisms available to adequately prepare millennials and empower boomer employees for this future cost burden. It’s time that employers take us into account when deciding health plan designs.

Which brings me to my next point. And I hope HR leaders are still reading. Financial wellness is universally essential. It is a critical consideration for boomers as they march towards retirement. It is and will continue to be a crucial consideration for millennials as we grow in our careers. It’ll not only impact the companies we decide to join (or leave), but also our ability to be productive, to save for the future, and to live happy, healthy lives.

Besides compensation and 401k, healthcare costs, and how those are handled, is a huge consideration for employees and their financial wellness. And, to put it simply, we need HSAs. HSAs are the perfect weapon to manage medical costs today, save for future expenses and promote financial wellness. And they’re portable and triple-tax advantaged! Tell that to an uninformed employee and they’ll just agree that it sounds great. Now that’s a great employee benefit!

We all at least need the option to choose an HSA.  And we need to shout this until we’re heard. During enrollment feedback. During employee benefits surveys. Because we want convenience. Because we want control. Because we want simplicity.

The traditional healthcare behemoth that sucks massive premiums from our paychecks for the care we never use needs to be upended.  We can’t hesitate to shop around for medical care to maximize value. Or, question authority regarding physicians and cost. We can’t be beholden to PCPs or specialists we’ve been referred to just because they’re in the same “network.” Do we need to go to the hospital when a MinuteClinic will do?

Together, boomers and millennials have an opportunity to take control of the healthcare market. To no longer be victimized by carriers or providers. But we can’t wait. HR leaders now have to equip employees with the tools and education to confidently go forth into the healthcare market and make the best decision possible. That starts with an HSA and outlining the real power of that account.

So, let’s improve health plans for everyone. Let’s provide everyone who wants an HSA, with an HSA. Let’s educate everyone on the power of an HSA. We can no longer cower in fear when we hear the term High-Deductible Health Plan. That’s not a bad thing when you have an HSA and a healthcare system navigation platform! Boomer and millennial employees can collaborate to turn the tide of the rising healthcare costs wave.

By Matthew McCormick

Five Steps to Higher Employee Engagement with Healthcare Price Transparency Tools

Combining a price transparency solution with a high-deductible health plan (HDHP) or a consumer-driven health plan (CDHP), can drive lower employee out-of-pocket (OOP) expenses, reduce overall medical costs, and lower claims costs. To capture these benefits, we recommend that companies implement programs to promote employee engagement to enable maximum savings. While it’s not complicated, shopping for healthcare is likely a new behavior for many employees that can limit savings until they’re comfortable with the process. We find that companies who implement an employee engagement plan typically experience program engagement rates at least 20% higher than those who don’t. The higher the employee engagement, the higher the savings the company can actually realize.

  1. Health Plan Design Matters – Nearly 6 in 10 people are concerned about rising healthcare costs, but if your company offers a low-deductible/PPO health plan, employees have little incentive to compare prices (or when they have $20 copays insulating them from the true cost of care). However, companies offering HDHPs or CDHP designs typically find employees have more “consumer interest” in shopping for care. Employees in these plans have a financial incentive to compare provider costs and quality to make more informed care decisions. Giving employees a price transparency solution allows them to reduce their out-of-pocket (OOP) expenses, maximize cost savings, and potentially keep some of their HSA savings for the future.
  2. Educate Employees and Assign a Program Champion – Healthcare pricing is complex, and many employees aren’t aware of the price variations in the healthcare marketplace or how to compare providers. Educating employees about how to search for and select high-quality, affordable care is an excellent step towards higher employee engagement. Following up with reminders on how to use cost comparison tools at regular intervals (at minimum every few months) will educate new employees and remind existing ones—who may not be frequent users of healthcare—of this important benefit. Designating a program champion (typically a senior HR role) to oversee the enrollment process and encourage employee participation will improve overall engagement rates and savings.
  3. Pick the Right Price Transparency Tool – Price transparency tool selection matters. Imagine you’re at your doctor’s office and are told to have a test or procedure done—how much effort would you go through to save money? Or, maybe you’re trying to financially plan for a future medical procedure for your child? Transparency tools offering 24/7 mobile access to local provider prices and quality generally have much higher employee engagement rates compared to those that require contacting a concierge service or those that only provide a rough “range” of prices. Consumers are used to comparing costs for most goods and services on their smartphones, so why should healthcare be any different? We encourage employees to install the transparency tool on their smartphone and “practice-shop” before going to the doctor. This exercise highlights market pricing variations and familiarizes them with the process before they need to shop. And don’t be surprised to find employees talking about procedure pricing variances of 1,000% or more around the office. These conversations can drive a culture of engagement and might help an employee who’s not using the tools to choose a different provider for a future procedure.
  4. Reward Use the Right Way – For companies with high-deductible health plans, rewarding shopping and savings behavior with HRA contributions reduces future employee out-of-pocket expenses, promotes medical consumer behavior, and reduces overall medical claims. This is a smarter approach over cash “spiffs” that tend to reward the wrong employee behavior by creating an incentive to go out and incur higher medical expenses, potentially driving up total claims cost in the process. Speak with your broker about plan designs that offer HSA and HRA options to offset higher deductibles. Both are powerful tools that can yield significant benefits today and act as a savings vehicle for the future with any unused funds (HSA).
  5. Use Reporting Tools to Unlock Additional Potential Savings – You’ll want to know how much your company is spending and saving on healthcare, how many employees are shopping, and also identify areas where you’re overspending. Comprehensive solutions that make it easy for you to analyze anonymized claims information can help your team discover procedures where additional savings opportunities exist.

Like any new benefit, price transparency tools will take training and time for your employees to adapt. However, it can help your employees get the most from a price transparency solution and help both them and the company to reduce healthcare costs. Price transparency empowers consumers to make more informed healthcare decisions by making it easier to compare procedure cost and quality on thousands of non-emergent medical procedures (e.g., lab tests, MRIs, x-rays, etc.) and capture significant savings in the process.

Your employees are wasting $12.49 a day by not shopping for healthcare

Let’s face it, we’re all frustrated by increasing out-of-pocket healthcare expenses. We spend more on premiums, for less coverage, and hope that an unexpected medical claim doesn’t financially ruin us. 

Pricing in healthcare is not transparent like other markets where consumers can easily determine the price of something before they buy it. It would be like buying a car without any idea of the final cost until the bill arrives months later and you have to pay for it. And unlike a car, you can’t return your healthcare procedure or sell it elsewhere to recoup some of your money.

In a market without “transparent pricing” and price variations that exceed 1,000% on the same procedure for patients with the exact same insurance coverage, you can be sure that your employees are overpaying for common medical procedures.

Provider pricing variations by market for common medical procedures

By analyzing billions of post-adjudicated medical claims, MyMedicalShopper estimates that employees who do not use a price transparency tool to shop for care are overspending by at least $12.49 per day on healthcare in 2019. That’s an estimated $4,559 per employee per year, wasted by not shopping for routine medical procedures (e.g. blood tests, MRIs, x-rays and immunizations). For a typical company with 100 enrolled employees, that could mean a potential savings of $455,900 per year that could be otherwise invested to drive growth elsewhere.

Getting accurate medical procedure price information is not easy, which is why many in Washington are calling for increased healthcare price transparency. Secret deals between insurance carriers and medical providers are responsible for the dramatic pricing variances above and have made it nearly impossible for patients to determine a medical procedure’s price beforehand.

Without pricing information many consumers overspend on healthcare and fear “surprise bills” they can’t afford showing up months after leaving the doctor. CNBC reported that the high cost of healthcare contributes to two-thirds of personal bankruptcies. And who knows how many patients forego needed care out of fear they can’t pay for it?  This is why price transparency solutions are needed to help consumers compare pricing and quality information to find affordable care.  

Healthcare price transparency might not cure diseases, but it can cure over-charging for care and help consumers make more informed healthcare decisions.

As we wait to see what our lawmakers in D.C. are going to do to solve the problem, price transparency solutions like MyMedicalShopper give employers and employees the necessary tools to navigate healthcare marketplace pricing and make better-informed care decisions. This empowers everyone to plan for future expenses, reduce out-of-pocket medical costs, and promote access to affordable, high-quality care creating a “win-win” for both employees and employers. After all, who wouldn’t want all their employees to save $12.49 per day on their medical expenses?