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

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?

Is a health savings account (HSA) better than a 401(k)? You decide.

I have written about the virtues of HSAs before. But never did it become so clear to me that HSAs can be better than other retirement accounts such as 401(k) and IRA (I had a hunch, though).

HSAs have been around since 2003; yet, in my opinion, the HSA is the most misunderstood, the most underappreciated, and the most underutilized feature in designing health plans. So, before I present why HSAs can be better than conventional retirement accounts, let me present why HSA is the best tool to supercharge your health plan.

This is what I believe about how to rein in healthcare costsbending the healthcare cost curve:

  • – We have been spoiled for a long time with virtually zero-deductible health plans, wherein we didn’t know what a particular medical procedure cost—nor did we care because someone else paid for it.
  • – The only effective way to rein in healthcare costs is to have consumers’ skin in the game—making them financially responsible consumers of healthcare.
  • – To get their skin in the game is to provide the Right Incentives through the Right Plan design.
  • – And, the HSA is a pre-condition for the Right Plan.
  • – With the Right Plan, we need to provide consumers with the Right Tools to enable them to do true comparison shopping for medical procedures.

Everything You Ever Wanted to Know About HSAs

Two definitive articles—and what is notable about them is that they were both written by financial planning experts—tell you everything you want to know about HSAs. Definitive means both are long for completeness. Fair warning: one of these is written by a professor with a Ph.D.

Supplemental Saving In An HSA For Retiree Medical Expenses

Could a Health Savings Account Be Better than an Employer-Matched 401(k)?

Before you read the articles, here are a few selected quotes:

The Health Savings Account (HSA) is unique in the landscape of tax-preferenced investment accounts, as it is the only type that enjoys both the benefit of tax-deductible contributions and tax-free distributions (for medical expenses).”

“In fact, the unique treatment of the HSA has created a wrinkle in the traditional approach of funding retirement accounts: given the inevitability of medical expenses in retirement, arguably the best savings account for retirement (or at least for a portion of retirement expenses) is to use a health savings account for retirement over ‘just’ an IRA alone.”

“…the fact remains that contributing the maximum to an HSA every year has the potential for more beneficial tax treatment than any other type of tax-preferenced account!

I’m as mad as hell and I’m not going to take it anymore!

A friend of mine owns three wellness centers and employs 80 people. Yesterday, she told me that her health insurance broker made his yearly visit with a renewal policy where the premiums keep going up … and up … and up. In the decade she has been in business, premiums have never gone down. And her employees aren’t in any better health. She was ready to scream.

The movie Network flashed across my mind. In case you don’t know the movie, Peter Finch stars as an anchorman who is fed up with the system. Co-stars included Faye Dunaway and Robert Duvall. There’s a famous scene where Finch tells his audience to go to their windows and yell “I’m as Mad as Hell and I’m Not Going to Take it Anymore.” And people all over the country do just that.

If you’re fed up with the rising costs of healthcare, you’re not alone. Employers spend more than $600 billion a year on healthcare, and many have little to show for it except a P&L statement that is bleeding red ink. The line for Healthcare Expense keeps going up … and up … and up.

Until recently, there was nothing you could do about it. Well, now there is.

I say recently, but it’s actually been over a decade since the Health Savings Account was introduced. Some might call a decade a long time, but a recent poll showed that 74% of Americans don’t know what an HSA is. One reason is that insurance companies and brokers don’t want to tell you about them because HSAs need to be paired with High Deductible Health Plans, which have lower premiums than traditional plans. And since premiums are the same as revenue to an insurance company, lower premiums mean that they and their brokers (also known as “salespeople” or “producers”) make less money. They have a built-in incentive to keep these plans hidden, or at the very least, hard to understand.

But smart employers like Kraft Foods, Cummins Engine, and the State of Indiana are catching on. They are taking costs out by redesigning their health plans and changing the behavior of their employees. When people have “skin in the game,” they look more closely at where they are spending their money. There are more tools than ever to help all of us better navigate through the healthcare maze. 

We at MMS have studied the success stories of leading companies that have transformed their healthcare stories, and we’re ready to help you profit from their experience. Go here to read a Wall Street Journal analysis of how you can save on healthcare costs. It’s called Two Essential Tools for Repairing the Obamacare Damage.

P.S. Here’s how one website described the movie Network:  “In this lauded satire, veteran news anchorman Howard Beale (Peter Finch) discovers that he’s being put out to pasture, and he’s none too happy about it. After threatening to shoot himself on live television, instead he launches into an angry televised rant, which turns out to be a huge ratings boost …” To see a video clip of the movie, go here.

Scared of high-deductible health plans (HDHPs)? You shouldn’t be. Here’s why.

For no good reason, HDHP has become a dirty four-letter acronym for healthcare consumers.

The WebMD article, “Why Your Employees Are Afraid of Your High-Deductible Health Plan (HDHP)—And What You Can Do About It”, by Christine Muldoon, Senior Director of Health Plan Market Strategy, may be from 2013, but it’s even more relevant today, as an increasing number of employers are offering HDHPs as their only health insurance option.

High-deductible health plans offer low premiums in exchange for high deductibles, and it’s the high out-of-pocket exposure from HDHPs that makes employees fearful of switching to these plans. However, when paired with a health savings account (HSA), fear can be eliminated and employees and employers can save big on healthcare.

For example, a company with 100 employees could save $120,000 per year in healthcare premiums by choosing an HDHP plan!

Save your employees money on healthcare. Sacrifice nothing.

Employers can keep employee out-of-pocket costs virtually the same as when they offered low-deductible health plans by funding HSA accounts with the money saved on lower premiums by switching their employees to high deductibles. If needed, employers can supplement with health reimbursement arrangements (HRA) to further offset employee out-of-pocket expenses.

Why HDHPs?

  • Drastically reduce premiums for employers.
  • With more skin in the game, employees are incentivized to minimize out-of-pocket expenses and become cost-conscious consumers.
  • Under the ACA, preventive care is covered with no out-of-pocket expense.
  • Long term, utilizing preventive care reduces claims expenditures for employers by avoiding possible complications from an underlying illness.
  • Why HSAs?
  • Both employers and employees can make pre-tax contributions at any time, even monthly.
  • Employees can make tax-free withdrawals from their HSA at any time to pay for virtually any out-of-pocket medical expense.
  • Unlike other medical savings accounts, the unused balance in the employees’ HSA will roll over at the end of the year, so they can keep building their savings!
  • When employees turn 55, they can contribute an extra $1000 per year to their HSA.
  • When employees turn 65, they can make tax-deferred withdrawals, just like a 401(k)—it’s essentially another retirement account!

It’s a win-win!

So, why isn’t everyone choosing HDHPs?

To put it simply, there are two big reasons:

First, insurers don’t want to promote HDHPs because lowering premiums reduces their profit. It’s their dirty little secret. And they’ve done a great job of keeping us fearful of HDHPs for their own monetary gain.

Second, the success of HDHPs largely depends on employees becoming cost-conscious consumers. To minimize out-of-pocket expenses, employees need tools to comparison shop for healthcare procedures.

Until now, you haven’t been able to compare prices for care because they have been a well-kept secret.

Insurance companies and a few other insiders like to keep us in the dark. Why? Because they make more money when we spend more. Reducing claims lowers their profit. By contrast, you want to save money (without sacrificing quality) and they want you to pay more.

Have no fear, MyMedicalShopper is here!

MyMedicalShopper enables true comparison shopping for medical procedures by shining a light on the secretive world of healthcare pricing. It empowers employees to spend their hard-earned dollars more wisely. MyMedicalShopper shows accurate and comprehensive prices charged by providers for more than 10,000 medical procedures.

Need a thyroid test in Portsmouth, New Hampshire? You could spend $28 at one facility or $204 at another facility half a mile away.

MyMedicalShopper also simplifies tracking deductibles and administration of HSA/HRA accounts for employers and employees.

Let’s shine a light on this dirty little secret!

Start saving your business and your employee’s money on healthcare today. Check out MyMedicalShopper for business.

Cost, quality, and your healthcare—a story about relationships

Cost and quality—they’re always related right? Well, usually. Sometimes we buy the cheaper good or service when we’re looking to save money, understanding the trade off is often quality. We might buy a hamburger at a fast food joint for $2 instead of spending $10 at the local pub. The same goes when we’re buying almost anything, whether it’s paper towels, power tools, desk chairs, or running shoes. The philosophy of “you get what you pay for” is ingrained in our culture. In fact, we often look at price as a kind of proxy for quality. When we stand in the aisle at the auto parts store and look at a shelf full of car batteries that all look the same, we naturally conclude that the more expensive battery is the better one. We’re trained as consumers to evaluate goods and services this way. And usually, this form of evaluation leads us to the correct conclusion.

But be careful when applying this same logic to your healthcare. Splurging on a burger now and then won’t likely break your wallet, but healthcare costs are no joke, and aren’t as easy to recover from. Recent studies have shown that there is no relation between cost and quality when it comes to our healthcare. And by becoming aware of this fact sooner, you are likely to save hundreds or thousands of dollars on your medical expenses each year.

Bill Clinton declared to his audience at the Healthcare Information and Management Systems Society in 2013 that, “every single year…the results have been the same. There is no correlation between what people pay and the quality of healthcare they get.” Still, there’s so many of us out there that believe price and quality are inextricably united.

If you’re not totally convinced by the words of Bill Clinton, perhaps you’ll find Peter Hussey’s comprehensive research on the subject more compelling. His team reviewed 61 different studies concerning the relationship between quality and cost in healthcare, then had his findings published in January 2013 by the Annals of Internal Medicine. The researchers found that “the association between cost and quality is small to moderate, regardless of whether the direction is positive or negative.” In layman’s terms, their research showed that there is no distinguishable relationship between the cost and quality in healthcare.

The following graph shows how the number of studies showing a positive relationship is virtually equal to the number of studies finding a negative relationship, and also roughly equal to the studies that showed no relationship at all between cost and quality.

There’s really no other industry like healthcare (a really tricky auto repair might be the next closest thing), where consumers are completely unaware of price before buying something, so it’s hard to even provide a decent example for the sake of comparison. But here’s another way to think about cost versus quality. You can buy a bottle of water at a gas station for $0.99. At a football stadium the same bottle of water sells for $4. Is there any difference in quality? Exactly. The market dictates that consumers will pay more for water at football games.

But what does the market dictate with regard to healthcare costs? Unfortunately, not a whole lot. Since we don’t really have access to any pricing beforehand, there’s really no rhyme or reason behind low or high healthcare costs. Some providers have low prices for tests and procedures, while other providers charge sky-high rates for the exact same care. And this is why Peter Hussey’s findings make a lot of sense.

So if you knew you could get the same quality healthcare at one facility for hundreds or thousands of dollars less than another facility in your area, which one would you choose?

Let’s take control of our physical and financial health by changing our perspective, becoming aware of the hidden truths related to healthcare (like the relationship of cost and quality), and by embracing new price transparency technology. By making these easy changes we can effectively become educated medical consumers, equipped with all the necessary tools to take control of our healthcare.