The second of a four part series

Each year in the United States, companies spend over $300 billion more in healthcare costs than they need to according to the 2012 Henry J. Kaiser Family Foundationreport. The Kaiser Foundation survey reviewed the costs of knee and hip replacement surgeries, and what they discovered was shocking. Prices for procedures varied as much as 313 percent, even in identical markets. Public outrage over these and other reported discrepancies has increased national focus on healthcare pricing transparency.

While there are many ramifications of the lack of healthcare pricing transparency, this article will focus on five ways employers can provide employees with tools and options that foster pricing transparency and help keep healthcare costs in check.

1.  Ask insurance companies if they supply side-by-side cost comparisons and cost estimation tools. Among others, Health Care Service Corp, Aetna, United Healthcare and Texas Children’s Hospital are leading the way in online tools that provide pricing transparency. These member tools are quite robust, sharing healthcare providers’ contracted fee schedules for specific conditions, as well as star-ranking systems that reveal how well doctors meet standards for efficiency and quality.

When educated about the importance of smart healthcare utilization, employees will shop providers. Interestingly, a study by Judith Hibbard, DrPh revealed that a significant number of consumers believe higher cost equals high quality care. While this can prove true when purchasing an appliance or furniture, it is not true for healthcare. Messages urging employees to spend their healthcare dollars judiciously, accompanied by side-by-side comparisons of quality and cost, lead to choices based on value and quality over price alone.

2.  Expand employee mindset about the cost of healthcare. While most people know their out-of-pocket expenses, they are not privy to what their physicians actually charge insurance companies for care, and how that cost is passed on to their employers. Opening their eyes to the fact that these invisible costs will be passed along as greater premiums and higher deductibles increases employee incentive to ask service providers what they charge for procedures before choosing treatment, just as they would ask for estimates before selecting a contractor for their home.

3.  Provide Health Savings Accounts (HSAs) along with high-deductible healthcare plans. High-deductible plans coupled with HSAs allow employees to leverage their choices. Since they are spending their own money, they may be more likely to pay attention to costs and options. Depending on your policy, let employees know that they can keep any HSA money that isn’t spent. Also educate them about the importance of spending a little on preventative treatment each year to avoid spending a lot on serious health issues later on.

4.  Add a wellness professional to your H.R. team. This can encourage participation in wellness programs and guide employees through the healthcare system. This is especially valuable when an employee is facing serious illness and needs help identifying the best options. Attention to employees’ overall well-being can translate into higher morale, better fitness and attendance, and heightened loyalty.

5.  Launch a communication strategy to initiate an ongoing dialogue about investing more time in evaluating healthcare benefits and choosing providers thoughtfully. The average person spends 19 minutes deciding on a healthcare plan. The goal is to get employees to devote more time to fully understanding their options and deciding which work best for their unique situations. Both the increased costs and additional savings can be passed to employees as added incentive to be more invested in their healthcare choices.

Even though America’s healthcare system has a long road ahead in achieving complete pricing transparency, it is possible to take some control and influence outcomes at the employer level. By facilitating open communication, increasing employee awareness, and encouraging price shopping, you can achieve smarter healthcare utilization within your team.

Want to put some of these ideas into action? Contact us to start the conversation.

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