Ross Klosterman is CEO and co-founder of Poppins Health of Columbus, a new health plan for small businesses.
To the question “Why do mutuals exist?” A reasonable person would probably answer that the role of health insurance companies is to use their influence to negotiate and keep health care costs low for members.
That same person might then be enraged to discover that as a single person with no bargaining power, they might often end up paying less out of pocket for medical services than the insurance companies negotiate on their behalf.
Which brings us to the following dubious but common scenario: A family of four pays an average of $22,000 a year for insurance, on top of an approximate $5,000 deductible before the insurance even kicks in. vigor. How did this become the norm around the world? WE?
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The answer may lie in the breakdown of health care prices. The vast majority of knee and hip replacements are done with “in-network” providers (i.e. insurance has negotiated with them). Therefore, the total price – and ultimately what members pay out of pocket – can vary widely, even within the same establishment.
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According to recent data, the cost of the same procedure in a hospital in San Francisco ranges from $22,865 to $101,571. Since each hospital and insurance company has a different process in place to determine the costs of the procedure, a patient may end up paying thousands of dollars more than someone else in the same location.
Under the traditional healthcare model, costs are confusingly divided between co-payments, coinsurance and deductibles. The end result is that health plan members have no idea if they are paying too much for a procedure.
Enter modern health plans. Business owners are less familiar with the newer and more innovative health plan options that allow employees to “shop around” for surgery.
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Take knee replacement surgery as an example: Employees with a modern health plan are able to know the exact out-of-pocket cost in advance and are presented with options up front. This “dynamic” co-payment is determined by three factors:
- Physician quality: Modern health plans look at objective data such as patient outcomes, infection rates, and readmissions to determine a quality score.
- Cost of Procedure: This number is determined by looking at what the provider charges compared to other providers in the area.
- Facility Billing Practices: This score relates to a member’s financial experience at a given facility based on the incidence of surprise billing.
After considering the above, the resulting member co-pay options are determined – if the employee chooses the option of a high-quality doctor with low cost and good billing practices, he will pay $0 for her knee replacement surgery. Maybe she wants to see the doctor who is still high quality but a bit more expensive – in which case the option could be $1,500.
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In a traditional health insurance plan, if there was a deductible of $4,000 with the traditional plan, in each scenario the patient would pay $4,000 – regardless of the quality of the doctor or the underlying price (and in just one metropolitan area in Ohio, knee replacement surgery prices range from $18,000 to $45,000).
To better understand what a procedure will cost up front, companies should take advantage of modern health plans like the ones above that compare prices and providers for their employees to potentially save thousands of dollars in fees. refundable.
Offering a good health plan is a great tool for retaining employees, so careful thought is essential when deciding which one is best for a business.
Ross Klosterman is CEO and co-founder of Poppins Health of Columbus, a new health plan for small businesses.
