Value-buying Still Possible for Firms Despite Transparency Problems
cmonfils | January 3, 2012
Employer’s Guide to Self-Insuring Health Benefits December 2011 | Vol. 19, No.3
The lack of cost transparency stands in the way of health cost control because it makes plan members unable to see prices before services are actually rendered, and harms their ability to budget health spending. Problems include: (1) multiple providers; (2) multiple network-provider contracts; (3) providers that often don’t know how extensive a patient’s treatment needs are until they start treatment; (4) insurers say contractual obligations with providers prohibit the sharing of negotiated rates; and (5) providers afraid of sharing negotiated rates due to their proprietary nature. Leah Binder, CEO of the Leapfrog Group, suggested that most employers can bring more efficient purchasing to their health plan in two ways: (1) change plan documents to reward members for using high-performance providers (for example, by waiving deductibles); and (2) computerize drug ordering and management systems, which would have quality as well as cost and efficiency advantages. (more…)
