Posted by Marie Foley, Director of Actuarial Services, Health Payment Systems on 08/30/2018
Healthcare costs in the US continue to rise, and the people paying the bill often feel helpless to do anything about it. John’s story illustrates a way to have more control.
John needed a full knee replacement. His first thought after he heard his doctor’s diagnosis, “this is going to cost me a fortune!” He went online to do some research on the typical cost for knee replacement surgery. John was shocked to see a price range from $40,000 to $60,000 for surgery. After a little more digging, he found it did not include the physical therapy and post-surgery visits to the doctor, nor what would happen if there were complications!
There’s enough stress facing surgery. Combine that with unpredictable costs and you have a formula for high anxiety. Wondering how he would get through this situation, John remembered something from his Health Payment Systems’ employee benefit meeting. There was a “bundled payment” plan that offered a flat rate for everything from surgery to full recovery. Checking with his HR department, John was thrilled to learn that within 20 minutes of his house a nationally recognized surgery center was participating in the bundled rate program. The flat rate of $27,500 included surgery and all post-operative care, including physical therapy. Wow! The best part of the bundled payment: John’s maximum responsibility was the $2,500 remaining from his deductible and he’d receive a $2,000 cash incentive from his employer for using the bundled payment program – dollars to offset most of his out-of-pocket expense. John was thrilled and relieved to know the total cost of the knee surgery and follow up care. He scheduled his surgery through the HPS Concierge program. He’d be healthy and not face insurmountable and growing medical bills.
Finding a way to receive the best care and save on medical costs are key reasons why bundled payments are viable and attractive options for both employees and employers. Rather than paying separately for each part of a medical procedure—hospital stays, operations, therapy after surgery, continued doctor visits that can lead to a pile of bills and a paper trail miles long—bundled payments provide all stages of medical care for a surgical procedure at a “fixed price.” Employees are assured of getting the care they need and knowing the cost up front. Many HPS bundles include the added advantage of an optional concierge program to make it easier to schedule appointments. And HPS is the only company to offer the SuperEOB ®, a comprehensive monthly statement of all in-network providers’ bills and related claims that give the employee an easy to understand statement and one payment for all healthcare providers.
Bundled payments offer the additional benefit for self-insured employers of substantially lowering out-of-pocket expenses, savings up to 50 percent over standard contract rates. This can lead to another consumer/employee benefit—financial incentives. Employers working with HPS often use a portion of their savings to offer cash incentives to employees to take advantage of the bundled payment rates. And with HPS, the employer can work with their employee on the best cost and care outcome using bundled payments, which can include waiving the deductible and coinsurance.
Another significant HPS-specific benefit for employers, the claims process for the employer remains the same so all bundled payment costs flow through the Third-Party Administrator and stop loss carrier, contributing to the deductible of the stop loss insurance. This is critical to minimize the annual total out of pocket exposure for a self-insured employer.
Bundled payments that provide access to nationally recognized, high-quality providers, as well as simplified employee billing and reduced health care costs are all possible through HPS. To learn more about these options and services and how employers are taking advantage of these solutions, visit HPS today!