Benefits

Cost-Saving Models for Employers With Self-Insured Health Plans

A consulting firm outlines three alternatives it has recommended to its partner companies in an effort to manage their employees’ health care in a cost-effective manner.

By PLANSPONSOR staff editors@plansponsor.com | May 30, 2017
Page 1 of 3 View Full Article

U.S. employers that self-insure their medical benefits have become increasingly frustrated with the constant surge in health care expenses and also with the lack of price transparency, according to a report from EBCG, a consulting firm in the employee benefits industry.

In a Perspective report, EBCG outlines three alternatives it has recommended to its partner companies in an effort to manage their employees’ health care in a cost-effective manner.

Cash-Based/Fixed Cost Pricing Models 

According to the report, written by Sam Odishoo, a consultant at EBCG, in recent years, cash-based hospitals and surgery centers have been emerging throughout the country. EBCG says these providers stand out from the typical health care market for cost transparency and no insurance company involvement.  Clinics that offer cash-based medical services designate fixed, up-front prices for their procedures, often posting them on their websites. This way, prospective patients and their employers know ahead of time what their financial exposure will be.

“Fixed costs for services represent a welcomed change from the characteristic uncertainty that persists in insurance-network affiliated hospitals and surgery centers. For companies that self-insure their employee health benefits, cash-based facilities can be a viable cost-saving alternative,” the report says. “If an employee requires a specific procedure, the employer can check their nearest cash-based provider’s price and compare it to what their insurance company would presumably charge at a local hospital or surgery center.” EBCG adds that it is not uncommon for the cash-based price for an identical procedure to be $5,000 to even $25,000 less, depending on the procedure.

NEXT: Reference-based pricing

SPONSORED MESSAGES