The buzz around health insurance right now is all about user experience and access to care.
The problem is two-fold: insurance literacy and health literacy.
Would it surprise you to learnthat 90% of employees do not know the difference between a copay,coinsurance,and a deductible?While that may seempretty basic to people like me in the insurance industry,this lack of knowledge makes it almost impossible for a patient to understand their costs.And remember,the patient isn’t just spending their own money,they’re spending your money too.
Health literacy is a little bit different than knowledge of health insurance,but health literacy(or lack thereof)is estimated to cost the United States between $106-236 billion annually. In my opinion,health literacy is more personal and more important than knowing the difference between a copay and coinsurance, which can be easily corrected.
Unfortunately, thisgets overlooked all the time. Lack of literacy in these areas is causing a huge financial problem. Thirty percentof provider services are waste,fraud,abuse,duplicative, andunnecessary. They may bejust a billing mistake,but a mistake,nonetheless.So,30cents of every dollar that you’re spending goes to waste.You don’t allow that in any other area of your business, sowhyallow it here?
Now that you are aware of the lack of health and insurance literacy among most employees, you can rectify this by helping todirect your employeesto high quality care in a number of ways. Different organizations have diversecultures and no one solution is going to work for everybody.Provider vetting is key. You can institute more stringent pre-authorization or precert requirements.Rather thansimplyrubber stampingapproval for treatment, you can utilizecare management,disease management, centers of excellence orsecond opinion programs to help improve the quality of your medical plan.
There are several Centers of Excellence acrossthe United States. In fact, one of the largest retailers in the U.S. drives all theiremployees’surgeries and procedures to Centers of Excellence. They do this because it’s the right thing to do,but what they have come to realize is that it ultimately lowers their costs.For example, if you use a Center of Excellence formuscular skeletal issues and spine surgeries(MSK), youwill reduce your MSKspend by 54% and avoid 20% of the recommended surgeries.You’ll also drop your re-admission rate from 6.5%down to 0.3% and since the stays will be shorter,your employee will return to work more quickly.
So,let’s say that your annual healthcare spend is a $1 million, which isnot unreasonable for an employer of 100,200,employees. Now, let’s say that $100,000of that is allotted forMSKsurgeries.So,if you’re reducing your spend by 54%,then you’re cutting$54,000out of your budget and all you’ve done is ensurethat you have driven your employeesto the highest quality care at the highest quality facility, resulting in a significant return.
Cancer treatmentsand other surgeries have consistently similar results.Would you be surprised to learnthat 30% of cancer diagnoses are wrong?
The gold standard of directing employees to high quality care ispatient advocacy, or, care management. Incorporatinga high-quality patient advocate will make things much simplerfor both you as the employerand for the employeebecause all these services are wrapped into one, as needed. There are also companies that use bundle pricing for complex imaging or routine services like colonoscopies.This is all handled out-of-office by the patient advocate, so you and your employees don’t have to worry about it any additional work.