Workers Retiring Later

The Society of Actuaries reports that nearly one in five Americans in their early 70s are still working. A big reason cited is that the age at which people can claim full Social Security benefits is currently 66. With actuarial tables showing that a 65-year old male can expect to live an additional 20 years, working longer has become a necessity, since retirement may very well last far longer than previously anticipated.


How a Broken Healthcare System Impacts People’s Lives


As a Third Party Administrator, employers and plan members count on us to make their health benefits work. While that sounds easy enough, it can be anything but easy when ordinary working families are forced to face exorbitant hospital bills.

One couple recently found themselves confronted with a very difficult situation when their son needed a medical procedure that would be considered routine in ordinary circumstances. However, what happened was anything but ordinary. The hospital rejected the couple’s insurance, saying that because they had gone out of network, they would be required to pay $9,000 up front for their child’s tonsillectomy and another $10,000 or more immediately following the procedure.

Their health plan, which we manage for their employer, has been partially self-funded for several years. In addition, the employer recently replaced their PPO network with reference based (or cost plus) pricing, a strategy that enables the plan to define pricing limits and ensure a much more transparent view of healthcare expenses.

In this particular case, we worked with the parents, their regular pediatrician and ELAP Services to arrange for the procedure to be performed at a local, affiliated surgical center – at a fraction of the price quoted by the original hospital. Their total cost was less than $2,000, approximately one tenth of the cost the original provider intended to charge. It took a great deal of work and cooperation to achieve this outcome, but the case serves as an excellent example of what can be done when a health plan has been designed to encourage open dialogue between patients, trusted advisors and providers.

More and more, hardworking Americans are facing extraordinary healthcare costs and struggling to pay their bills. NerdWallet Health conducted a study and found that a debt collection agency will contact 1 in 5 American adults regarding medical debt. This means there are approximately 51 million people who are unprepared and unable to deal with the rising cost of healthcare.

Another aspect of healthcare that is seldom discussed is the challenge facing small and mid-sized employers struggling to provide adequate healthcare to their workers. Rising costs have made it nearly impossible for many companies to hire new employees or invest in their businesses in other ways. Sadly, millions of Americans have seen their standard of living eroded by the cost shifting that has occurred.

As these parents and their employer have discovered, alternatives like reference based pricing are helping to build bridges between employers and hospitals. “While a good deal of experience is required to design these plans and manage them over time, the opportunity for cost savings is so significant that more and more employers are moving in this direction,” said Brooks Goodison, President of Diversified Group. One of New England’s most experienced Third Party Administrators, Diversified Group has responded to the growing demand. “With or without reference based pricing, Diversified has long been committed to pursuing mutually rewarding partnerships between employers and community-based health care facilities,” added Goodison. “Open communication, cooperation and innovation by businesses and healthcare providers are musts if the issue of runaway healthcare costs is ever going to be resolved.”

As cases like this have long shown, the price for a given healthcare procedure in the same locale can vary greatly, often with little difference in quality. When employers use reference based or cost plus pricing, the plan and area hospitals typically agree on a pricing schedule for covered benefits by using Medicare plus a predetermined margin. Visit Diversified Group online to learn more about reference based pricing and view a brief educational video by ELAP Services, Inc.

Should You Consider a Direct Primary Care Physician (DPC)?


It Could Be Your Path to Value and Transparency!

Direct financial relationships between individuals or employers and primary care physicians are gaining in popularity – and for good reason. In contrast to the traditional fee-for-service payment arrangement, where physicians are reimbursed according to the volume of services they provide, direct primary care (DPC) shifts the focus to value.

In most DPC arrangements, physicians charge a monthly, quarterly or annual membership fee, covering all or most primary care services, including acute and preventive care. The fee can be paid by an individual or by a sponsoring organization such as an employer-sponsored healthcare plan. Patients say they enjoy a more personalized experience, including easier access, shorter wait times and an opportunity to spend more time with their physician.

Many physicians say fee-for-service arrangements are the cause of increasingly shorter primary care appointments and an over-reliance on outside tests, prescription drugs and referrals to specialists. Because continuous care relationships enable them to focus more on preventive care, DPC physicians believe they can provide better outcomes. As the transition to value-based care evolves, direct primary care will certainly play a bigger role.

The way we see it – anything that can lead to high quality, lower cost healthcare is certainly worth a look!

Tell Us How You Feel!


Student Loans and Standing Desks

healthFinancial wellness, standing desks and other wellness strategies are high on the list of benefits trending upward in 2018. According to the Society for Human Resource Management, a growing number of organizations are offering programs to help employees improve their financial well-being. Some companies are providing debt counseling and help with repayment of student loans. Standing desks are becoming very popular, with a growing number of companies offering them to employees as a new wellness benefit.


The human side of healthcare: When treatment is at risk because profit takes priority


This article was published on April 06, 2018 on CTViewPoints, written by Steve Kelly.

For the New Haven parents of one young boy who needed a tonsillectomy, the news was grim. Not because his diagnosis was risky or complicated, but because the family’s hospital rejected their health insurance and demanded $9,000 up front for the procedure. By the time their son would be eating ice chips and Jell-O post-surgery, a minimum of $10,000 more would be due.

This inflexible posture taken by a reputable Connecticut provider in the face of a healthcare consumer in need is disturbing. Fortunately for Americans, the U.S. provides access to much of the finest medical care in the world – skilled doctors and nurses and clinicians whose priority is patient care. Unfortunately, the broken part of our healthcare system is the way we pay, and it trickles down from the facilities to the employers to the employees to the families.

An independent study conducted by Castlight Health, a San Francisco-based healthcare price transparency company, shows pricing variations for common procedures that are sometimes five-fold within the same geographic area. Every single day hardworking people are hit with charges that are difficult to understand and challenging to justify.

Remarkably, after extensive time and effort in wrangling with the facility, the New Haven parents were able to have their child’s same physician perform the procedure at an affiliated local surgical center instead, for a prices of less than $2,000, or about one tenth of the cost.

The more than 150 million Americans who get their healthcare coverage from their employer are equally at risk for denial by a healthcare facility. Yet inexplicably absent from mainstream news coverage of healthcare reform are the challenges facing those employers – employers who struggle to provide adequate healthcare to their workers.

In many cases, health plan costs rise annually and far faster than a company’s earnings. This negatively impacts multiple areas of business and the very employees the plans are designed to protect. These rising costs lead to less hiring of new employees, less investment back into the business, less competitiveness in their market space, and a gradual erosion of their employees’ standard of living. Suddenly, the conversation shifts to rising healthcare costs being not simply an economic issue but arguably a quality-of-life issue for the workforce, rather than an insurance regulation discussion.

For many of these employers, options are few. Each year, the open enrollment period serves up more of the same – ineffective traditional PPO models that are constructed on vague cost details with misleading discounts based on inflated prices, all underscored by a pervading lack of control.

Trading a PPO for an approach known as reference-based pricing is both a viable alternative and a business-saving strategy that’s gaining significant traction. Referenced-based pricing restores information and control to employers and their workforce because the coverage plan defines pricing limits upon which claims will be paid. It’s been around for over a decade, and has been adopted by thousands of employers for its cost-saving benefits and transparent view into healthcare expenses.

An approach like referenced-based pricing builds bridges between employers and hospitals while making healthcare a community-centric solution that supports open dialogue between patients and providers. These direct relationships are the remedy to America’s ineffective insurance process that has failed to contain costs or improve quality. Instead of health benefits being provided through insurance company intermediaries, addressing healthcare costs needs to be between the medical providers and the employers in the communities they serve.

Collaboration and direct partnerships between employers and their community medical facilities is a proven approach for resolving the issue of high healthcare costs. It’s past time for businesses and the medical community to innovate and provide a viable alternative for affordable healthcare that employers, and their 150 million employees, can count on here in Connecticut and nationwide.


How Do We Feel About Disruption in Healthcare?


If It Helps to Control Costs…We Say Have At It!

While many healthcare providers and insurance carriers are raising concerns about the recently announced partnership by these mega employers, I say Thank You! That’s right – thank you for caring enough about runaway healthcare costs to do something disruptive. For making a commitment to get involved.

Why would an independent TPA applaud when a company that seems to be on a mission to take over the world, and other giant corporations, decide to tackle the healthcare space? Because there are far too many stakeholders accepting the status quo and standing on the sidelines as huge claims are paid without a blink of an eye and the cost of specialty drugs continue to skyrocket.

It’s far too early to tell if the proposed partnership by Amazon, Berkshire Hathaway and J.P. Morgan will lead to lower costs or improved outcomes. But as a TPA who fights to help my clients control costs every single day, I say that if this venture and others can make a positive difference, then have at it. Perhaps this new level of disruption will be just the prescription our ailing healthcare system needs!

Tell Us How You Feel!

Annual Family Coverage Nears $19,000

dg-healthThe 2017 Employer Health Benefits Survey by the Kaiser Family Foundation shows an increase in the cost of family coverage from $18,142 in 2016 to $18,764 in 2017. While the 3.4% increase is seen as relatively modest compared to previous years, it was also noted that employees paid close to a third of the annual family premium – approximately $5,700.