One of my kids needed to have their adenoids removed. Before, we would have blithely gotten the procedure done oblivious to the costs. Instead, I tried mightily to get a price ahead of time so I could negotiate a cash price. Only the surgeon was willing to give me a price for his services. I paid him out of my HSA prior to the surgery and we both came out ahead. Unfortunately, the hospital was unwilling to give me this information. The final bill was close to $10,000. In contrast, the surgery centers such as the one outlined below would have charged $2,695 for the entire procedure.
Alex Alvarado, Matthew Rae, Gary Claxton, and Larry Levitt
Kaiser Family Foundation
Separate from the ACA, so-called “private exchanges” have also started to emerge as an option for employers
providing coverage to their workers. These private exchanges do not provide access to premium subsidies like
the public exchanges, nor do they necessarily involve standardized coverage tiers. But, they do have the
potential to reshape the employer-sponsored health insurance, which covers 149 million people, or nearly 56%
of the U.S. non-elderly population. We conducted interviews with more than fifteen private health insurance
enrollment platforms, as well as several employers and health plans moving in this direction, to create a picture
of this quickly growing landscape. We identified ten of the platforms we interviewed as full private exchanges
(based on the definition described in the next section) and have profiled those in the appendix.
Many approaches are sold as “private
exchanges” since the concept is now in
vogue. In profiling these efforts, we have
sought to define what differentiates the
new, more competitive approaches
analogous to the ACA’s public exchanges
from the traditional technology platforms
that simply provide online enrollment.
Also, what we describe here as private
exchanges are targeted at employers,
which eliminates many of the “e-brokers”
selling directly to the individual market.
Characteristics that exemplify a private
You could say we’re “self-insured” health-wise, meaning that we just save our money each month instead of shelling it out to corporate insurance companies. And when you’re self-insured, price tags suddenly take on serious meaning in a way that those with third party insurance never worry about.
Green Aliens from Space
There was just one problem—the overwhelming majority of corporate medical establishments don’t have prices. In fact, my partner and I had asked a few local hospitals and clinics for a quote on a bicep repair surgery, and received confused silences and blank stares each time. These receptionists appeared to have literally never been asked for the price of a surgery before. We didn’t realize that asking for a simple price quote had made us the equivalent of green aliens from space until we saw staffers’ almost-horrified reactions to our question.
So on that Sunday afternoon, seeing my partner in the vulnerable state of admitted defeat, a light went on in my head: that one surgery place in Oklahoma. I remembered someone had posted about it on Facebook a couple of years ago, this place that was becoming famous for the simple and apparently revolutionary act of having a price list.
“Proactive Medicine” refers to medical services that focus heavily on engaging patients while they are healthy or early in the disease process, developing strong relationships, and providing early treatment or driving behavior change that prevents or delays serious illness.
Intensive primary care is important because 1) primary care impacts almost 100% of the population and 2) the benefits are big. Jorgensen reports that MDVIP has seen reductions of 80% plus in ER and hospital utilization and in hospital readmissions among a large group of Medicare patients that benefit from MDVIP’s particularly intensive primary care service.
The Mandate on Employers. Though most of the media attention has focused on the number of individuals who have lost health coverage and the rocky start of the federal and state health exchanges, much of the burden of complying with the ACA will actually fall on employers. About six-in-ten Americans with private health coverage get it through an employer. The cost is not trivial: The Congressional Budget Office estimates that the required coverage for an individual will cost the equivalent of an additional $3 an hour “minimum health wage.” Family coverage could cost more than twice that amount.Employers are also required to limit the amount of premiums most employees pay to a percentage of their wage income. For example, health plans are considered “unaffordable” if workers earning less than 400 percent of the federal poverty level about $46,680 for an individual must pay a premium that is more than 9.5 percent of their income. Firms that fail to provide health insurance will be subject to a tax penalty of $2,000 for each uninsured employee beyond the first 30. Firms that offer “unaffordable” coverage will pay a penalty of $3,000 for each worker who cannot afford coverage.In theory, firms could retain their current health plan by claiming “grandfathered” status. However, according to official documents, two-thirds to as many as 80 percent of employer plans will likely lose their grandfathered status — forfeiting protection from cost-increasing regulations.Effect of ObamaCare on Premiums. The consequences for employers and individual workers who must purchase coverage are already becoming apparent. A 2014 survey of 148 insurance brokers by the investment firm Morgan Stanley found that renewal rates in the small group market have risen substantially. For instance:Premiums for firms renewing in 2014 jumped 11 percent in the small group market.For firms with coverage through BlueCross, the year-over-year renewing contract premium hike is nearly 16 percent.For individuals, the increase was similar — about 12 percent.
I predict that as this syndicate comes apart, the members, once pals, will begin to devour each other not unlike what happens in most gangster movies. If the market discipline that rules most other industries is allowed even a window of opportunity in the arena of healthcare, I predict that the resulting competition will bring prices down drastically and quality will soar. As more and more of these cronies break ranks, high quality and affordable health care will soon become a reality, a manifestation of the power of the market not the product of central planners and their failed legislation.
By: G. Keith Smith, M.D. http://SurgeryCenterOK.com
A patient who wanted to have a procedure at our facility asked us to file insurance. We discovered that if she had her surgery at our facility rather than at an “in network” hospital, her deductible would have been $3,000 instead of $1,500, her copay would have been 50% of the charge rather than 20%, and she had to agree to a 25% penalty for coming to the Surgery Center of Oklahoma rather than one of the hospitals in the network. Never mind that the hospital would receive multiples of our fee from the insurance company, and the patient’s copay at the hospital was more than our entire charge.
This insurance company (a huge national company) made it clear when they came to Oklahoma that they were not interested in contracting with any facilities that were not hospitals or affiliated with hospitals. Because of this, our facility is out of network. In order to steer patients to in-network facilities, insurance companies financially punish patients for wandering outside.