Is Value Based Pricing Here to Stay?

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With More Families Forced to Choose Between Healthcare & Housing, It May Be the Future

As a TPA, employer groups count on us to make their health benefits work. While that sounds easy enough, it can be anything but easy when ordinary working families face hospital bills they can’t handle.

One couple recently found themselves confronted by a hospital that rejected their coverage, demanding an advance payment of $9,000 for their child’s tonsillectomy, with a $10,000 balance due following the procedure. Because the employer has replaced their PPO network with Value Based Pricing (VBP), we were able to work with the parents, their regular pediatrician and ELAP Services to arrange for the procedure to be performed at a local, affiliated surgical center. Their total cost was less than $2,000 – a fraction of the original price.

While a great deal of work and cooperation were required to achieve this outcome, Value Based Pricing made it possible, by defining pricing limits in advance and encouraging dialogue between the patient, the provider and us as the TPA.

In a time when too many hardworking Americans are facing extraordinarily difficult healthcare decisions, helping employers and hospitals agree on pricing schedules for covered benefits may be the only way to keep quality healthcare within reach for small and mid-sized employers and the workers they depend on.

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

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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!

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How Do We Feel About Disruption in Healthcare?

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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!

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