Healthcare costs have continued to mount economic pressure on employers and their employees, and it has now reached a breaking point. Employers have relied on third parties to help navigate and control costs, but this has been futile as costs have only exploded at a faster rate.
Employers and employees pay 100% of commercial healthcare.
The cost of healthcare is spun with intentional confusion. Because of smoke and mirrors, we falsely assume that our insurance pays the cost of care. The link between healthcare costs and the direct impact on salary is completely lost. We have been redirected and have no concept that we are the ones actually paying the bill, not our insurance carrier. For every dollar healthcare increases, employee wages are directly impacted.
Hospital systems are reimbursed 2-4x higher than free-standing providers and clinics.
We have all noticed how physician practices have been bought up by hospital systems. A few years ago, I found that they were also gobbling up physical therapy clinics when I went to sell my practice. What astounded me was why they were only interested in my commercial, not my Medicare numbers…hospital owned PT clinics are reimbursed 3x more for commercial visits! Like bloodwork and other services performed at a hospital, the price differential is outstanding! WHY would insurance allow these higher charges if they are supposed to be our advocate in finding the best prices via their network?
Insurers have NO INCENTIVE to keep costs down.
You often hear of the low, 3% profit margins that insurers have, but that profit grows in relation to a larger bill (3% off a million versus a billion). When the charges go up, insurers simply set premiums to cover their costs. THEY don’t pay – YOU do! As healthcare costs climb, so do the stock prices of the insurer. Take a look at the stock prices of Aetna and UnitedHealth Group over the past five years. The only ones feeling the pain are employers and employees.
Why don’t insurer and hospitals share the costs of service and provider outcomes, so you can choose the BEST care?
We know the stats on all of our professional athletes down to their assists. We know the crime rates in our cities and even which schools are performing better than others. Still, when it comes to our healthcare providers, the only thing that is shared is their schooling, hospital affiliations, and years of experience. To make an informed decision on a serious matter, like surgery or treatment for cancer, we must know the outcomes of potential providers and the cost of care. How can we give informed consent without this information? If I need a knee replacement, I want to know which surgeon is the best for my care. How many knee replacements has this surgeon performed? How long do his surgeries take? What is his percentage of complications? What is the hospital infection rate? What is the cost of surgery?Our hospital and insurance carriers have this data, yet none of this information is accessible!
Transparency is a concept that the healthcare establishment has run from and do their best to bury the details with confusion.
Our current government administration is finally pushing for healthcare transparency. Until now, carriers and hospitals have been able to hide behind layers of complexity when it comes to billing. The cost details are not shared because, behind the scene, there are deals and secret negotiations between hospitals and carriers they do not want you to know about. Your carrier and hospitals sell that they have the best Provider Network and physicians, yet they hide their outcomes. A provider network has nothing to do with the quality of the provider. Instead, it is merely a list of providers that are willing to take a discount.
Direct and self- pay have only increased with the cost of living, while insured care has skyrocketed.
If your PPO and insurance carrier roles are to negotiate and provide you with the best pricing, then why has the cost of insured care skyrocketed, while direct and self-pay costs remained steady over the past 20 years? An overview of the US HealthCare spending in JAMA 2018 found that one of the most significant factors is our high administrative fees. The more we rely on intermediaries to assist with reducing costs, the more we spend. Marilyn Bartlett is an excellent example of how you can negotiate for better pricing. She saved Montana’s state health plan from bankruptcy by demanding transparency from hospitals and physicians, and then renegotiated better deals. Direct contracting with high-quality providers allows the best quality care at a fraction of traditional cost.
Price of Care vs. Quality of Care
Many of us have a preconceived notion that the more we pay for something, the better it must be. But that is not always the case, especially in healthcare. In fact, the opposite is usually true: High-Quality Care is often at a Lower Cost. For example, the cost of a Total Knee Replacement can range from $12,000 – $110,000. A seasoned surgeon will complete the surgery in thirty minutes, allowing the patient to go home that same day. A less experienced surgeon may take two hours to complete the procedure. Because of the added anesthesia required, this patient will be required to stay overnight in the hospital. Anesthesia and the surgical room are billed in fifteen-minute increments, also further increasing the cost of this procedure. Companies like MediBid were born out of this lack of transparency. They reduce healthcare costs through competitive bidding, allowing you to see outcomes and fees before you agree to treatment. Instead of paying $90,000 for a knee replacement, they help you find a more qualified surgeon at a much lower cost.
Sold verses Advised
Another area where there is a lack of transparency is payments to your broker or if self-insured, the carrier that is managing your account. If Aetna is going to pay a commission of $100,000 for your 1100 employees and Cigna is only going to pay $75,000, what coverage is your broker going to sell you? You are being SOLD not Advised. Your broker will also push supplements, such as cancer or dental when there are large bonuses attached. You are paying the commissions and bonuses through your premiums. You can easily change this: Insist that ONLY you pay your broker. One company, Health Rosetta certifies brokers to adhere to best practices, so they will not accept secret bonuses from carriers and easily reduce your costs by 20-40%.
Demand the BEST Providers!
Employers want the best possible care for their employees and are now looking for high-quality physicians and hospitals. Walmart has partnered with Centers of Excellence to give their employees access to world-class medical specialists and Ground Rounds for second opinions to assure that surgery is the best option. Simply getting a second opinion from a high-quality provider has reduced back surgeries by 50% and changed a number of cancer diagnosis to non-malignant!
Early Access to the Right Provider
Care for Musculoskeletal disorders has now reached $213 billion a year, tripling that of diabetes. Our current procedure for is time consuming before conservative care is initiated:
- Appointment with your family physician
- Prescription for an anti-inflammatory, pain killer or muscle relaxer.
- Possible x-ray
- Schedule an appointment with orthopedic surgeon.
- Finally, an order for physical therapy (average 14 – 64 days)
This route is entirely backward. Research has shown that attending physical therapy first not only significantly reduces the cost, but also the length of the ailment, opioid prescriptions, surgeries, unnecessary radiographs, and healthcare visits. But the focus must be on empowerment, not passive care. Clinicians Certified/Diploma in Mechanical Diagnosis and Therapy have been found to reduce back surgeries not by 50%, but by 80%! More importantly, they also return the individual to pain-free activity thus minimizing chronic pain. 65% of those with chronic back pain have never been told to exercise, when exercise is the only proven treatment.
The focus should be on EARLY PROPER CARE!
Early proper care places emphasize on patient empowerment by teaching the patient to care for themselves and to maintain activity. Passive care and rest lead only to prolonging the ailment. The role of the clinician must be to educate the patient, promoting the body’s natural healing. Instead of “You need me to get better”, where the patient has a passive role, they are empowered to self-treat. Empowerment reduces fear and anxiety and instead promotes well-being.
- Demand transparency
- You pay the broker – no kickbacks from carriers.
- Direct contracting
- Best providers with high-quality outcomes.
- Conservative care first that empowers and maintains activity. Not passive care.