News 1/13/2021

HR Daily Advisor: Why Health Care Shopping Deserves the Spotlight Now

For many, January is a time for new beginnings, to create plans for new accomplishments, or to get back on track toward reaching existing goals. And one of the top five New Year’s resolutions—after losing weight, of course—is saving money. January is also the start of a new health care plan year for many employees, presenting a perfect opportunity to test out that budgetary resolution.

Despite the fact that there are no set prices for health care products and services—not for tests, for surgical procedures, routine care, or even prescriptions—68% of consumers do not regularly compare costs from different providers before choosing where they get their care. And that’s costing employees—and their employers—hundreds if not thousands of dollars.

With new price-sharing rules for hospitals set to take effect this month, health care transparency will be in the news. In fact, we can expect improving health care transparency to be a top priority on the national stage in 2021. Cost-conscious employees need to understand:

  • What “health care transparency” means and why it matters
  • The how and why of shopping for care
  • Best practices for smart health care decision-making
  • Where they can find support

What Is Health Care Transparency and Why Does It Matter?

To paraphrase The Institute of Medicine, health care transparency means providing reliable and understandable information on a health care provider’s quality, efficiency, and consumer experience, including price and quality data, in order to influence patient behavior to achieve better outcomes (quality and cost of care). Having this information available means consumers can make sure they’re getting the best “deal” for the care they need without compromising quality.

Why Is It Important to Shop for Health Care?

Most consumers may not realize the cost of any given treatment can vary by thousands of dollars among providers or even among doctors within the same hospital. One study shows that in the state of California, an appendectomy can cost anywhere between $1,529 and $186,955. What if the first place a consumer checked was the $186,955 option and he or she didn’t keep looking to discover the former, which is 120 times less expensive? For an employee who’s met the deductible and had 80% coinsurance, that could mean the difference between $306 and over $37,000 in out-of-pocket costs!

Because so many consumers aren’t aware that they can—or should—shop for their health care, employers need to step up their educational efforts. For self-insured employers in particular, an educated workforce can result in substantial bottom-line savings.

Shopping Best Practices

Saving money on health care is achievable if consumers keep certain fundamentals in mind.

  • Remember, you always have options. If your provider orders a medical test, you can get it done at the hospital outpatient testing facility, a stand-alone testing facility, or even sometimes a retail or an urgent care clinic. It only takes a few minutes to make some calls to get a sense of price.
  • Don’t default to the emergency room (ER). The ER is the most expensive source of care and is often unnecessary. Remember, the ER is designed to stabilize patients with life-threatening conditions, not to treat the flu. And, if a case is not considered a true emergency under the terms of the plan, you may be required to pay the full cost. Consider urgent care facilities, retail clinics (such as CVS or Walgreens), or a telehealth visit.
  • Check for coupons—and specials. Yes, coupons. There are many websites that offer discount coupons for medications, which might even lower the cost to below what you’d pay with insurance. At the very least, you can see how much the cost for your prescription might vary from pharmacy to pharmacy—and you might make a switch. Also, many stand-alone testing centers run specials from time to time on particular tests. If you’re not in a rush, it might be worth the wait!

Research and Use Available Support

Most consumers don’t understand enough about health care terms and processes to navigate the health care system strategically and cost-effectively. Knowing what consumers are up against in their health care journey, employers should offer support where possible—and promote its availability.

Many employers partner with independent health care advocacy firms that can act as the trusted resource for their employees. In addition to helping employees understand their treatment options, find providers, and resolve billing questions, advocates can help locate in-network providers and conduct cost comparisons on the employee’s behalf. The cost of these services to employers can be more than offset by the savings: With advocates on their side in 2020, patients who compared their care saw average savings such as:

  • $21,716 for joint replacement (arthroplasty)
  • $11,090 for an arthroscopic procedure
  • $2,195 for an MRI

Whether you partner with an advocacy firm or rely on online resources to encourage shopping, just offering the support isn’t enough. Employees need to be made aware of the services and how and why to use them. Frequent communications—using concrete examples of savings such as those above—can help employees think of shopping for health care as routine as shopping for groceries.

As we move through 2021 and begin to face new transparency regulations affecting plan sponsors and health plans, it will become even more incumbent on employers to help their employees understand just what a difference shopping for health care can have on their budgets. And you’ll also help employees meet at least one of their New Year’s resolutions.

Read the article here.

(Kim Buckey is vice president of client services at DirectPath)

The 2021 Benefits Broker: Year-round Strategies to Keep Employer Costs Down During a Pandemic
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The 2021 Benefits Broker: Year-round Strategies to Keep Employer Costs Down During a Pandemic
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