Intriguing Employer Tricks

Regular readers know that we're big fans of Consumer Driven Health Care (CDHC). When consumers (insureds) have "skin in the game," they're more likely to be careful health care shoppers. After all, if it's their cash at stake, there's an incentive to become actively engaged in the process. The fly in this particular ointment has always been a lack of transparency in the actual cost of care. When we use the buzz-word "transparency," we generally turn to the McDonald's model; that is, when I walk into a Ronnie Mac's, I can look up and see exactly what my fries and Diet Coke will cost. This isn't always applicable to health care, especially when it's an emergency, but certainly for chronic illnesses or elective procedures, it should be easy to find the cost of a given service (of course, this wouldn't take into account potential complications, but it's a starting point nonetheless). One major benefit of this model is that cost-conscious health care consumption can have a positive effect on the cost of delivery. If providers have to compete not just on outcomes but also price, then it's a win-win for consumers. And that's just what Prodigy Health (a health services holding company in Buffalo, NY) has decided to do with its group health benefits. Like many (most?) employers that offer (and subsidize) group health insurance, Prodigy looked around for some way to rein in skyrocketing costs. They found the answer at the drive-thru: "Before the new program, workers' incentive to shop around was limited because they had no idea – or any easy way to find out – that prices for many types of medical treatments varied widely." The "new program" is elegant in its simplicity: the company sets the price they'll pay for a given procedure, and then employees (or their covered dependents) call in for a list of local providers who meet that price-point. They can also opt for another provider, but would then be responsible for the cost difference. And it's not just a wing-thing, either: on the other coast, Safeway Foods has a similar program in place. By shifting not just the cost, but the responsibility for health care back to the insured, employers are accomplishing several things: first, of course, is a potential cost savings. But beyond that, it's a signal to folks that we need to be more actively engaged consumers – who goes and buys a car without checking the price? Look for more of this to take hold as tech and prices begin to catch up.

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