Free Market Minute: Solution Fatigue

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Solution Fatigue; this is how a colleague recently described the current state of mind of employers. This description is incredibly accurate. When speaking with employers, benefits consultants, and TPAs, I frequently hear that the employers need the free market concept to be “made simple,” because they just can’t handle another complicated program, product, vendor, or “solution”.  It’s not just the employers; the employees are just as overwhelmed with all of the different options to figure out how their health plan works.

This magazine may be called “Free Market Healthcare Solutions”, but the intent is not to sell a product. We want to initiate a paradigm shift in the way employers, their employees and, ultimately, all of us make healthcare purchasing decisions.

The brutal truth is, there is no specific product, program, widget, or vendor that completely solves the complicated issues in our healthcare system. Without a shift in the way everyone thinks about healthcare, the only end in sight is for the system to crash and the government to ‘save’ everyone with single payer.

One reason this “solution fatigue” is happening is because each day there is something new we are expected to be outraged by, and a new product or proposed law that will save us. From insurance carriers, to monopolistic hospital systems, group purchasing organizations, to pharmacy benefit managers; the list goes on and on! No one can keep up with who they are supposed to be mad at!

The second reason is that there are just too many products, vendors, laws, regulations, legislators, bureaucrats, and industries that represent no true value in the transaction. The factions are bellowing at the employer that they must offer the best benefits while not charging too much, but they need to save money, etc. All of this conflicting, and often counterintuitive, advice is confusing. Adding insult to injury, employers must also be aware of all of the benefit laws and regulations they are subject to.

Did you know that most of the “cost saving initiatives” or “solutions” that are being sold to you can be accomplished by you alone? A few more of them can be accomplished in partnership with the right kind of vendor.

This issue is full of great advice and explanations of how you can take back control of your Plan, while having superior benefits. Still have questions or need more detailed advice? The FMMA, and any of our members, are more than happy to help.

STEP 1
Educate your employees about what being self-funded means. Any dollar they save by choosing a better value medical service stays in your company and can be used for salaries, bonuses, new equipment, and new hires. You know this. Make sure they understand it too.

STEP 2
Incent your employees to make better purchasing decisions. You can structure your benefits to reward employees for making good decisions; for example, add a benefit level for using transparent, high value facilities and imaging, include an HRA for Direct Primary Care. If an employee gets a good cash deal that they have negotiated themselves, cover it! Encourage them to talk about price.

STEP 3
Use your Plan, and your Plan Document, to limit the truly egregious charges. You don’t need a separate vendor to negotiate with dialysis providers, air ambulance, or any of the other common “six figure offenders”. Put dollar limitations for those benefits in your Plan that have specific allowables. Implement a reference based pricing option for some, or all, of your benefits. Don’t be afraid of balance billing! You have already taught your employees to be better shoppers inSteps 1 and 2, and you have the power to intercede and assist with negotiations if necessary.

I can almost hear you now…”But our network contract won’t allow any of this.” Renegotiate the contract or dump the network. Ask yourself what real value have they brought to you so far—besides obfuscating the true cost behind a shield of made-up ‘discounts’, and the ever-increasing cost to your Plan?

Megan Freedman

About Megan Freedman

Megan Freedman has worked with self-funded benefit plans for more than 15 years. For the past 12 years, she has worked with The Kempton Group serving as the Vice President of Corporate Communications. Ms. Freedman has extensive experience not only in employee benefits, but also marketing, sales, account management, executive support, and member services. Ms. Freedman is the Executive Director of the Free Market Medical Association. She was recently featured on Kevin Price’s Pricing in Business Radio show and writes and co-authors many articles, white papers, and educational materials. She is licensed in Life, Health, and AD&D in Oklahoma and Texas.

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