For many companies, the alarming rise of employer-sponsored healthcare prices has had a detrimental effect on their bottom lines and has also limited employees’ access to quality care. The relationship between the quality and cost of healthcare can be deeply complex, and sometimes reducing corporate costs results in lower quality employee healthcare.
For example, when an employer tries to reduce healthcare costs by increasing the deductibles on employee insurance plans, it can leave employees functionally uninsured if they cannot afford the higher payments. This trend is becoming increasingly common as more employers turn to high-deductible health plans to limit profit losses.
Unsurprisingly, this unsustainable lack of access to quality healthcare can decrease employees’ ability to engage in productive work and is also likely to increase turnover, leaving employers with few quality employees. The tension between the need to cut overhead costs and the desire to provide employees with top-notch healthcare can easily become a vicious cycle that takes a toll on a company’s bottom line.
Cost containment strategies in healthcare coverage offer employers ways to escape this cycle by providing more harmonious options for balancing care and cost.
Cost Containment Strategies in Healthcare
Just as it’s essential to have quality healthcare that both employers and employees can afford, it’s also important to be aware of the best cost containment strategies for your operation. Let’s take a look at some of the best cost containment practices in healthcare:
Switching from a traditional, private insurance reimbursement model to a self-funded plan with a reference-based pricing model (RBP) can produce substantial savings and increase access to better quality care.
Rather than simply paying a bill when it arrives, the RBP model leverages the reimbursement process to negotiate prices from a different reference point of valuation. While traditional healthcare models base prices on hospital charges, the RBP model uses an aggregate of Medicare payments for similar services to determine more reasonable payments.
By questioning the prices billed for services rendered and negotiating from a position of knowledge, the RBP model significantly lowers prices from the original bill. This cost-containment strategy maximizes both company savings and quality of care.
Switching to a reference-based pricing model does not require employers to replace their entire healthcare plans. Companies can use RBP as a secondary means of payment for specific procedures while still enrolled with traditional insurance. Such wrap-around services can enhance your savings and coverage substantially, even without a full plan replacement.
Bundled payments are an increasingly popular healthcare cost-containment strategy. Instead of paying for each line item on a bill of services individually, the program offers a lump sum payment option that covers every service rendered for patients.
For example, instead of paying $2,500 for an MRI, $300 for an X-ray, and $2,000 for blood work—a total of $4,800—a bundled payment plan would charge $3,700 for the series of procedures. However, while this cost-containment strategy can offer employers considerable savings, it does not guarantee that the bundled price will be lower than individual payments.
Clean Claim Reviews
Clean claim reviews assess the integrity of every service billed prior to any payments. About 80% of all medical bills contain at least minor errors; savvy employers armed with this knowledge can use it to produce potential savings.
A clean claim review evaluates every billed item of a claim’s data to ensure billing accuracy, usually as claims editing or itemized bill reviews for high-dollar inpatient procedures. A clean-up of pre-payment medical claims can also yield the most immediate, as well as some of the highest savings of up to 10%.
In this way, a cost-containment strategy also functions as a payment integrity measure, bringing greater transparency to medical billing. Much like reference-based pricing, clean claim reviews can also operate as a standalone service or as a wrap-around solution to enhance your existing plan.
These are just a few of the many options to help employers lower their costs while offering employees healthcare of equal or better quality. Both employer and employee reap the benefits because happy, healthy workers at peak performance are often more productive. Furthermore, direct savings on healthcare spend can drastically improve company profits.
How 6 Degrees Can Help
As industry-leading experts in the healthcare reimbursement field, 6 Degrees Health is committed to not only saving your operation money, but also to bringing greater transparency to the hazy fog of healthcare reimbursement.
Our reference-based pricing method, combined with our expertise and proprietary software, ensures you save up to 40% on your healthcare spend. As a cost-containment company first and foremost, we’re dedicated to providing you with the most transparent and efficient cost-containment strategies in healthcare.
As a cost-containment company, 6 Degrees Health helps employers navigate healthcare protocols to pay what is fair. Speak to a representative today to find out how our reference-based pricing model can help you realize the true benefits of healthcare.