Jim’s Take

How much will my surgery cost?

A Real Data, Sorta Real Life Story

Let’s pretend that you are one of your employees, and you want to get hip replacement surgery.  And let’s further pretend that you aren’t the typical frightened, intimidated patient who will blindly follow whatever directions your doctor gives you including standing on your head to relieve pressure on your hip.

Oh, no!!  You’re an informed consumer, and you want to get the best quality possible, and price matters, too.

Major aside: Under your current plan design, one of your employees might want to find the best quality, but there’s a better than 80% chance that they couldn’t care less about the cost.

And whose fault is that?  Yours. Your current plan offers no incentive whatsoever to your employee for selecting the best possible price/quality combination.

So you go on a detailed search, as Reuters did in a search reported in JAMA Internal Medicine May 29, 2018 (https://bit.ly/2sAXtRp).

A Daunting Task

So what would you do to make such a search?  Well, how about this?:

  1. Contact 120 hospitals. 22 top-rated orthopedic hospitals and 98 randomly-selected hospitals
  2. Ask for the lowest “bundled cash price” that includes all hospital, surgical and doctors’ fees.
  3. If the hospital will only give the hospital fee, ask for the name of an orthopedic surgery practice.
  4. Call the orthopedic surgery practice to get their price for the surgery.
  5. Call each hospital up to five times to try to compile the following information:
    1. Hospital Price Only
    2. Doctor Price Only
    3. Bundled Price.

Whew!!  Lots of work, right?  As an aside, notice that you’re ONLY comparing price here – no quality data yet!

But it’s worth it, because now you know exactly which of 120 doctors and hospitals to go to for your surgery, right??

A Pig in a Poke

Wrong!!!.  Here’s what you would have gotten after as many as 600 phone calls.

  • Hospitals giving a bundled price — 8
  • Hospitals giving Partial Price — 34
  • Hospitals giving NO price data — 25
  • Complete price obtained by data from both doctor an hospital — 25

So you could get the bundled price in 7% of the cases.  As an aside, Reuters did the exact same study with the exact same hospitals five years earlier — and the percent of hospitals giving full data DROPPED IN HALF!!

In other words, price transparency in that five year period got worse, not better.  That, despite (or maybe because of) all the burdensome ACA regulations that are driving the cost of medicine higher, not lower as promised.

Why Should You Care?

You may say (I hope not, but it’s possible): “Hey, I’m a business owner.  I provide a health plan to my people so that they can have the coverage they need.  What difference does all this mean to me?”

Well, for one reason, my friend, you’re paying most of the bills, and your premiums are driven by the cost of said services.  Beyond that, quality makes an even bigger impact on your company operations.  Why do I say that?

  • A surgery with complications is more expensive.
  • A surgery with a readmission within 30 days is doubly expensive.
  • A surgery with lousy quality also often costs more.
  • An employee who’s more focused on finding the right hospital and surgeon probably isn’t working at 100% of capacity.
  • A lousy surgery means more time off – and you have to pay to cover the employee’s job while she’s out on medical leave.
  • Lousy quality provided by your plan might just cause an employee or her friends to find a better place to work.

That enough reasons for you?

OK, You Care.  What Can You Do??

Well, the bad news is that if you’re small enough that you HAVE to use a fully insured plan, then you’re kinda out of luck.  Because that’s the way every commercial insurance plan works.

They don’t really care much (they do care a little) about your employees’ costs or outcomes.  What they care about is having “the biggest network with the biggest discounts” as possible.  That’s how they sell their plans vs their competitors’ plans.

The good news is that it’s easier than ever to self-fund your insurance.  Captive plans, small-group self-funding products, true self-funding plans — all are now available.  If your group is unhealthy, it’s still a problem, but there IS a solution.

And if you choose self-funding and you also choose to work with BBI, you can tell your employees that “We have a health care concierge to give you complete, data-supported price and quality information is available at the touch of your telephone 24/7, including holidays.”

And if you’re smart, you will incentivize your people to make the phone call by sharing the savings with them.

Here’s a good rule of thumb: if you give your employees, say, a $1,000 reduction in their deductible in return for getting and following the recommendations from the health care concierge, you, as an employer, will save more than $5 for every $1 you give your employees.

If we were in South Carolina, I’d tell you that was a “winner-winner, chicken dinner.”  I’ll have to find a New England equivalent. How about “wicked awesome?”

I have a complete strategy outline on how to save tens of thousands of dollars on your health plan.  A REAL book (i.e. printed on paper).  It’s called End Runs Around Obamacare, and it’s yours for the asking.

Just email me at jedholm@bbibenefits.com and say “I want to end-run around Obamacare!”  Give me your contact info and I’ll mail you a copy the same day.  Promise.

Better yet, call me at 978-886-9058 (my cell) and give me the info.  You’ll have the book — and a workable strategy to lower health care costs and improve employee morale — before you know it!!