Ross Klosterman is the CEO and co-founder of Poppins Health of Columbus, a new health plan for small businesses.
To the question, “Why do health insurance companies exist?” A reasonable person would probably answer that the role of health insurance companies is to use their influence to negotiate and keep health care costs low for members.
Then that same person may get angry when they find out that as an individual, with virtually no negotiating power, they can often end up paying less out of pocket for medical services than what insurance companies do. agree on their behalf.
Which leads us to the following dubious but common scenario: a family of four pays an average of $ 22,000 a year in insurance, in addition to the estimated deductible of $ 5,000, before insurance even begins. How did this become the norm in the US?
More ▼:Ohio hospital prices vary significantly for the same procedures
The answer may lie in how broken healthcare prices are. Most of the knee and hip replacement is done with network providers (meaning that the insurance has agreed with them). As a result, the total cost – and ultimately what members pay out of pocket – can vary drastically, even within the same facility.
More ▼:How to send feedback columns to Columbus Dispatch guests
According to the latest data, the price for the same procedure in a hospital in San Francisco is in the incredible range from $ 22,865 to $ 101,571. Because each hospital and insurance company has a different process for determining the cost of the procedure, one patient can pay thousands of dollars more than someone else in the same place.
In the traditional healthcare model, costs are confusingly divided between co-payments, co-insurance and deductions. The end result is that members of the health plan have no idea whether they are overpaying for a procedure.
Introduce modern health plans. Less known to business owners are newer, more innovative health plan options that allow employees to “shop” for surgery.
More ▼:Bill to Restrict Restrictions on Supplementary Prescription Drug Remains Stagnation at Ohio House
Let’s use a knee replacement as an example: Employees who have a modern health plan can know their exact costs out of pocket and are given options in advance. This “dynamic” surcharge is determined by three factors:
- Physician Quality: Modern health plans consider objective data such as patient outcomes, infection levels, and readmissions to determine a quality outcome.
- Cost of the procedure: This number is determined by seeing what the provider charges compared to other providers in the area.
- On-site invoicing practices: This result is related to the financial experience that the member has in a facility, based on cases of surprise bills.
After taking into account the above, the received options for additional payment of members are determined – if the employee chooses the option of a high-quality doctor with low price and good billing practices, she will pay $ 0 for her knee replacement. Maybe she wants to see a doctor who is still of high quality, but is a little more expensive – in which case the option could cost $ 1,500.
More ▼:A new tool is looking for health insurance prices
Under a traditional health insurance plan, if there was a $ 4,000 deduction from the traditional plan, in each scenario the patient would pay $ 4,000 – regardless of the quality of the doctor or the base price (and only in one Ohio subway area, knee replacement rates range from $ 18,000 to $ 45,000).
To better understand how much a procedure will cost in advance, businesses need to take advantage of modern health plans such as the above, which make price and supplier comparisons for their employees to save thousands of dollars at their own expense.
Offering a good health plan is a great tool for retaining employees, so careful consideration is crucial when it comes to choosing the one that is best for a company.
Ross Klosterman is the CEO and co-founder of Poppins Health of Columbus, a new health plan for small businesses.