More than a year later and the impact of health care reform continues to be debated. Some features have been implemented and the regulatory definitions continue even with the uncertainty of potential legislative changes. It's murky at best. One thing is clear: The broker world is changing and a consulting-oriented approach seems the best course. Now is a great time for brokers to expand their assistance to employer groups and provide expertise and technology on health care cost transparency - with the ultimate benefit being the reduction of health care spend.
Health care reform will most likely increase access to insurance but it is still not clear how it will affect the cost of health care, if at all. In any event, account-based plans, whether purchased directly by consumers through exchanges or through employers, will continue to grow. Patients (consumers and employees) will be expected to pay a growing portion of their health care expense out of pocket.
In almost all other markets, consumers have access to the price and quality information needed to make informed, value-based decisions. This is not the case with health care. While health care reform doesn't directly address this issue, there is technology that brokers can make available to employer groups that does provide price and quality information for their employees. Given this access, employees can make value-based decisions and get a better price without sacrificing the quality of the care they receive.
Get the data
Access to claims data is the essential first step in controlling cost. Claims data should be available from the carriers. Some payers are cooperative; some are not. Be persistent in your pursuit of this data, it can be a game changer. One excellent recommendation a broker can make to an employer client is to insist that access to claims data is specified in the payer agreement. A specific clause that grants access to claims data should be clearly spelled out so there is no misunderstanding about the employer's right to obtain its own data.
Analyze the data
Okay, so now you have an employer's claims data. Most likely it is not in a form that facilitates the analysis of utilization and cost. That's because it wasn't captured for that purpose. However, this is yet another opportunity to assist your clients. Keep in mind that there is wide variety of resources you can tap into to assist in the analysis.
Most employers are surprised to find that, in a given geographical area (e.g., a zip code), in-network prices for the same service can vary by 500% or more. Yet most often the patient receives no additional quality for the extra cost. Local price variability for in-network providers is not a secret; it is simply difficult to get concrete data and do something innovative with it.
Inform and incentivize
I have written about (and advocate) providing online access to the information needed by employees to help them make better decisions about their health care and make better money-related choices. Online technology can further aid employees by providing access to cost and quality of actual in-network provider information. A good online tool should provide the following capabilities.
* It should be easily searchable, with results that use common terms rather than med-tech jargon.
* Service pricing should be complete. For example, most patients don't realize that if they have surgery, they will get three major bills: surgeon, anesthesia and facility. Price estimates should include all three.
* It should ensure that patients clearly understand the fair price, or what they should reasonably expect to pay for each service. Once patients know the fair price, they can more effectively find providers that offer a good value. If patients don't know how much an MRI should cost, they are very likely to spend $3,000 instead of $600.
* It should provide a list of in-network providers that offer fair prices.
* It should provide quality data whenever it is available for each provider so that employees can consider both cost and quality.
* From a technology perspective, tools should be flexible enough to seamlessly support all of your health programs. For example, if you have an onsite clinic, the onsite clinic staff should be able to use the transparency tool to help the patients while they are recommending follow-up care.
* The tool should also support your benefits program, including custom networks, rewards programs or reference pricing.
All of the features listed above will certainly drive utilization. But what will cause an employee to choose a $1,000 MRI versus a $3,000 MRI? One idea is to let them participate in the savings. The claims data analysis will reveal the average cost an employer has previously paid for a set of given services. If an employee chooses a lower price, a portion of the savings could be contributed by the employer to the employee's HSA.
The overall effect will be to drive the average price of services lower - reducing spend and helping employees better manage their out-of-pocket expenses.
One of the great things about this approach is that it works regardless of the direction health care reform takes. It fits nicely with a fee-based approach and, as a broker, you don't have to continue the "wait-and-see" game - you can take real action now and help your employer groups today.
Lamb is senior vice president and general manager, Benergy Interworks, at A.D.A.M. Inc., in Atlanta. He can be reached at email@example.com.
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