What You Don't Know About Your Healthcare Plan Is Costing You Want to ensure the wellbeing of your employees - and protect your bottom line? Ask yourself these two questions.
By Dave Chase
Opinions expressed by Entrepreneur contributors are their own.
As a business owner, you might find yourself caught between two core principles: the responsibility to ensure the wellbeing of your employees and the need to protect your bottom line. The good news is, the two aren't mutually exclusive: It's absolutely possible to provide a top-notch health care plan that also maximizes your savings. First, start by answering one question: Do you know much your organization spent on health care costs last year?
Even if you don't know the exact number, you might already be aware that you're paying too much. According to a survey conducted by Enterprise Bank and Trust, 79 percent of business owners are concerned about health care costs, and for good reason. Being unaware of how much your health benefits plan is costing you is problematic. Health care is riddled with wasteful spending — money that could be used to help your business recover from Covid-19.
The next question to ask yourself is: Do you know the details of what you were paying for? Unlike most years, this renewal season, in the middle of a public health crisis, it's critical that you fully investigate your options before signing on the dotted line — especially when the status quo works against both you and your employees.
Status quo health plans are rooted in "fee-for-service," a model used by most traditional insurance carriers, in which providers are paid for each individual test, procedure and treatment. This system, developed over one hundred years ago, was in place throughout the 20th century because most patient problems were acute in nature. As a result, the fee-for-service design enabled easy access to medical care and compensated providers for their services.
Health plans built around this model are concerning for two reasons. The first is that high-cost care frequently does not equal high-quality care, and there's no clear way for employers or employees to understand what, exactly, they're paying for. The fee-for-service model is so opaque, most employers have no idea whether they're being grossly overcharged, nor any clue about what kind of care quality comes with that price tag.
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Odds are, if your organization has a cookie-cutter health plan right now, you and your employees — via unnecessarily high premium payments and deductibles — are not getting what you pay for.
What's more, your plan's primary care coverage is probably only making matters worse. Employees are getting frustrated having to wait days, if not weeks, for an appointment. And then when they finally get to see their doctor — who is overwhelmed by all the paperwork that comes with billing for each and every service — it's only for a few minutes. This "quick fix" mentality pervasive in old-line health plans is why the U.S. pays Cadillac prices for a Pinto-producing health care system.
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Value-based primary care is a cost-saving, quality-improving alternative to fee-for-service primary care, and implementing it as a part of your plan is the key to getting more out of your health plan for significantly less money. Instead of prioritizing individual charges for each procedure or test, value-based models place a premium on the care of patients and their health concerns by incentivizing providers to spend more time with patients during appointments, plus consider lifestyle factors when prescribing treatments, to produce better patient outcomes. Finally, financial incentives are aligned with desired health outcomes.
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The healthier people are, the less often they'll need to see a doctor and the less likely they'll be to require long-term monitoring or treatment. In every corner of the country, wise employers are spending 20-40 percent less per capita on health benefits with superior health outcomes by following proven approaches that will rapidly become the new norm.
Knowing the details of your health benefits plan is a crucial step in cutting back on unnecessary spending and providing your employees with the best standard of care. By abandoning the outdated fee-for-service system and embracing value-based care, you'll reap the rewards of high-quality care for a cost that won't make you cringe.
