Why are advisers letting insurers run rampant?
Costs in excess of those that would be incurred by a prudent person. Billings for unnecessary equipment. Costs that are many times higher than government estimates. A willingness to rely on contractor estimates with little or no questions asked.
Sound familiar? Many employers would associate such behavior with today’s healthcare providers. After all, their service charges often appear to outrageous and employers and their employees are often left clueless about the reasons for their through-the-roof pricing. Flying blind, they feel powerless to fight back.
Such galling behavior may seem unprecedented, but we’ve been here before. The above list of accusations was actually lifted almost word for word from the 2005 congressional investigation of the oil services giant Halliburton, which was found to have “unreasonably billed” $1.4 billion to the American public for its services in Iraq. That case should have taught us a thing or two about how to rein in healthcare costs.
Much like the circumstances surrounding Halliburton, today’s healthcare providers are largely unaccountable and unaudited in terms of their pricing and underlying costs. All too often employers have no idea what they’re really paying for—but they continue to pay anyway by meeting their fully-insured flat rate insurance premiums.
To reign in healthcare costs, this situation has to change. Fully-insured status quo benefit plans are gold mines for the four remaining medical carriers. Yet they continue to go largely unchecked, because the advisers who are supposed to be auditing the plans on behalf of their clients are all too eager to hit the ‘approved’ button.
But the status quo is costing employers and employees dearly. The high cost of healthcare prevents companies from raising wages, saps corporate investment and limits economic growth. Halliburton siphoned off $1.4 billion in fraudulent charges. The healthcare industry takes in $3 trillion annually, of which one third is estimated to be wasted. America has gone to war for much less.
To correct this situation, employers need visibility, and going forward I’ll be using this blog to arm them with a new understanding of how they can use the data from their own healthcare spend to gain a new measure of control over what they spend on their medical insurance.
Matthew White is a healthcare strategist with EBG.