It varies from state to state, but about 50 percent of healthcare in the US is sponsored by employers, employers paying a significant percentage of healthcare premiums and costs for their employees under these plans. These plans may be traditional plans administered by insurance carriers, or the employer may assume some financial risk (but also be subject to significant savings) self-funding a healthcare plan.
Whether traditionally insured or self-funded, companies have been challenged to keep up with the pace of spiraling costs. One of the strategies many have been forced to employ is passing on a larger percentage of costs to employees. As costs have grown much faster than wages, costs take up bigger and bigger chunks of employees' paychecks. The average US worker pays 15% of gross wages for healthcare premiums before he or she even begins to pay for healthcare itself. That said, half of Americans do not have $400 cash readily available for a healthcare expense without borrowing or divesting savings or possessions. Thus we have a class of Americans who are "functionally uninsured", despite the billions of dollars they and their employers are paying "for care".
"We have a class of Americans who are 'functionally uninsured', despite the billions of dollars their employers are paying on their behalf."
--- DR. CRISTIN DICKERSON, MD
Unlike government-sponsored healthcare reform, which seems unlikely to occur in the foreseeable future, a number of innovators who include doctors and other providers, digital entrepreneurs, population health managers, specialists in insurance claims review, benefits consultants, insurance brokers, third-party administrators, and journalists are creating the rumblings of change in the employer-sponsored healthcare world. see #healthcare on Linkedin.
Keith Smith, MD who co-founded Surgery Center of Oklahoma 20 years ago, pioneered transparent-bundled surgical pricing, posting prices online in 2009.
Jay Kempton, President and CEO of The Kempton Group, third-party administrator for self-funded employer health care plans, founded the Kempton Premier Provider Program in 2011, a program through which his employers incentivized employees to use providers like Surgery Center of Oklahoma, that offered fair transparent pricing for medical services, saving the employers and their employees millions of dollars.
In 2014, Jay and Keith founded the Free Market Medical Association (FMMA), a nonpartisan organization with the goal of uniting and supporting self-funded employers, patients, and sellers of health care who offer transparent pricing.
Sean Kelley and Patrick Kelley, MD of Texas Free Market Surgery founded the Austin Chapter of the FMMA in 2017. In 2017, I co-founded the Houston FMMA chapter with Geetinder Goyal, MD of First Primary Care and Venu Julipalli, MD of Integral Gastroenterology Center and the Dallas FMMA chapter with Colin McNeese of Marsh & McLennan Agency. Lee Wolford of W Surgical and Lucent MD has also helped organize the Dallas chapter.
1. Silos of Savings
Bundled surgeries, bundled imaging, Direct Primary Care (DPC), pharmacy savings plans, wellness plans, second medical opinion programs, and companies attempting to coordinate some of these benefits, such as Zero Card, have emerged. There are well documented and significant savings associated with these programs, but they add to administrative load for TPAs and employers and may further fragment patient care. For example, the patient's already overtaxed primary care doctor has to familiarize himself or herself with these plans to provide prescriptions and care covered by the patient's plan and probably does not have a relationship with specialists and surgeons who might provide needed services for this patient.
2. Healthcare Repricers
Companies such as AMPS and Karis 360 negotiate lower pricing on claims after the service. Receiving the inflated healthcare bills from hospitals and providers is, however, alarming and stressful for patients and their families who may already be under significant stress related to illness or injury. Both of these repricers are combating this by offering concierge counseling for patients to find affordable options up front for non-emergent care. However, they are limited by claims data not reflecting many cash pay options, incomplete and fragmented pricing data available on the internet, and difficulties assessing the quality of care provided by these providers for such a wide array of services.
3. Healthcare Navigators
Many of the entities described here offer nurse navigator and concierge medical scheduling services that help employees find affordable and high-quality healthcare options in general or within their own programs. The limitations of these services are described above. However, Direct Primary Care practices such as First Primary Care, MyMD Connect, Euphora Health, Direct MD Austin, Premier Health, and Uncommon Healthcare, provide a much higher level of patient navigation. They provide subscription-based primary care with a focus on patient healthcare rather than sick care, with an eye on both the patient's and employer's pocketbook, an expert understanding of true quality of care, a network of affordable high-quality direct care providers with whom they work collaboratively, and a goal of reducing patient stress of navigating the system for the 20% of care they are unable to handle at the primary care level.
4. Healthcare pricing databases and marketplaces
Bill Hennessey, MD's Pratter and Medibookr, are emerging as subscription-based database tools for employers, not owned by insurance companies as are some of their competitors, designed to help employees make better decisions based on pricing of care. Again, cash pay options may not be fully reflected in these databases as they are primarily derived from claims data and comparison of quality for equitably priced options is not easily projected. The FMMA website also offers a listing of free market providers. Medibid, ZendyHealth, Save On Medical, and Access Healthnet offer online marketplaces for healthcare purchases.
5. Underwritten healthcare plans
Robyn Jacobsen of Entrust, Mark Stefanik of Advantage Benefits Solutions, Jeff Bernhard of Continental Benefits, Cary Goss of Clarus Benefits Group, Colin McNeese at Marsh and McLennan, Ralph Weber of Medibid, and Jennifer Morgan at Gallagher are amongst those leading change in the design of employer-sponsored plans. Asserta and regional plans like Patient Physician Cooperative and Vista 360 are also in the forefront of innovation. Philadelphia American's New Era plans are available to individuals and employers as cafeteria-style defined benefit plans.
6. Employer healthcare sharing cooperative
Dr. Tony Dale of Sedera Health has used his long experience in the Christian healthshare market to sculpt an affordable employer health care sharing entity. This is not an underwritten health care plan but it is a viable and cost-effective option to offer alongside a traditional plan or as new coverage for employers not previously able to afford a healthcare benefit.
7. Coming soon
The best of the above combined in one coordinated direct healthcare ecosystem: Lucent MD, available April 2018.
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