It has never been more important to be educated about emerging trends in health plan solutions and be ready, able and equipped to have open and honest conversations about all available models. Employers are faced with increasing healthcare costs and they’re looking for replacement solutions that are more affordable for them and their employees.
Healthcare Reform Is Dragging
Healthcare reform is an increasingly hot topic, and there is growing support among employers related to drug prices, surprise billing and hospital price transparency. But progress has been slow, and employers are not waiting for government regulation to drive change. Instead, they’re proactively looking for ways to deliver similar or better healthcare benefits to their employees while also controlling costs.
This has sparked a renewed conversation around healthcare model alternatives to traditional PPOs – namely reference-based pricing (RBP).
Benefits of RBP
RBP is a cost-saving model that can take self-insured health plans to the next level in savings. Unlike traditional insurance plans, RBP sets limits on the amount the plan will pay for certain healthcare services. These limits are based on the actual cost of service or a percentage on top of what Medicare would pay the provider for a service.
RBP results in a fair and reasonable amount for employers, members, and providers – and has the potential to save employers anywhere from 15-30% of their total healthcare costs.
This “bottom-up” approach of RBP is a sharp contrast to traditional “top-down” PPO models that start with inflated and variable hospital chargemaster prices, then offer discounts.
The Time is Right
With healthcare costs on the rise – for both employers and their employees – these savings couldn’t come at a more opportune time.
For employers, switching health plans – or, for that matter, any change that requires a new way of doing things – can be scary. This is why it’s common for employers to stay with their current health plans, no matter how high costs climb.
But times are changing, and there’s a growing trend in the world of healthcare.
Interest in RBP is growing. The cost savings and other benefits RBP promises employers (and their employees) are outweighing any perceived “disruption” a change in health plan would cause.
A Competitive Edge
The past few years forced employers to get creative about how they do business, sometimes just so they could survive. Now with projected cost increases looming, employers are ready to apply that same creativity to their health plan solutions. RBP is an effective way to help them become more competitive and cost-effective, while also reinvesting in their business.
To learn more about RBP, and to see if it is right for your organization, contact your American Health & Wellness representative today.