Be a Leader, Protect Member Money

If your company is struggling with the ever-increasing cost of healthcare for your workforce, you must understand that there is no end to it. Changing medical carriers will not make a meaningful difference. No one is coming to ease the burden. Your traditional PPO costs are not going to go down at the next renewal, or the renewal after that or even the next renewal after that. This is not a sustainable model for American workers.

As a former human resources leader, I want to highlight an element of reference-based pricing that doesn’t get discussed nearly enough — members’ money. RBP gets so much attention for the savings realized by employers. Often overlooked is the savings shared by employees enrolled in RBP plans. 

Before joining ClaimDOC, I implemented RBP with ClaimDOC at my former company. I didn’t realize it at the time, but being a champion of RBP was an unusual role for HR to play. More commonly, this sort of project is at least initiated by an executive, such as a CEO or CFO, who becomes intrigued by the advertised savings opportunities for employers. It was clear the 25-30% employer savings was going to happen. As the leader of the project within my former employer, I was excited to tangibly contribute to the bottom line.

Competition and regulation changes were driving up wages in the local labor markets. The company needed a way to raise wages to stay competitive. The savings it could drive through the plan with ClaimDOC was going to allow it to do so. What drove me was much deeper, though. I knew the company could do more than just impact wages.

After years of shifting costs, I understood premiums and out-of-pocket costs had reached a point many of our employees couldn’t afford. I knew about the negative chatter around RBP on issues of access and balance bills. I didn’t let this dissuade me if a vendor offered real hands-on solutions to address these issues. I knew it wouldn’t be perfect and there would be a disruption, but I decided it wasn’t my place to speak for the employees’ money. I couldn’t say they wouldn’t want to go through a change if it put more money in their paycheck and gave them more protection on out-of-pocket costs. I understood this because I grew up in a family that was not well off. There was also a time in my adult life where the only health coverage my family could afford was state Medicaid. That has always stayed with me and made what members pay for healthcare matter so much to me.

For the employees, RBP was a total game-changer in year one. The company I worked for realized every bit of the savings promised by ClaimDOC. But it was not just the company that got to enjoy these savings, it was the employees as well. Employee health insurance premiums were lowered by 10% right off the bat. The company also tracked the out-of-pocket costs for plan members throughout the year. They found that the employees saved money at a similar clip as the company. This was a huge win.

It’s very intuitive. When clients’ claim spend goes down, their stop-loss premiums also decline. Lower premiums result in a lower cost for the member to participate — meaning more money in their paycheck. Also, for long term clients, the cost stability for members is powerful. We have a long-term client that hasn’t increased premiums for members in seven years. According to the Kaiser Study on Average Annual Premiums, costs for family coverage has increased 39% over that same period. Imagine keeping the fixed cost portion of your budget for healthcare flat while wage growth rates have jumped 5-6% the last three years.

Beyond the premium savings, members save money on out-of-pocket expenses through our fair pricing model that leverages a line-by-line audit from our clinical staff. This always gets overlooked, but the savings on procedures flows directly to the member and saves them money in real time. I took a look at last month’s Audit Spotlight to evaluate the real-time cost savings.

Hospital Outpatient Bill — Total Billed Charges $65,185.52

  • ClaimDOC Pricing — $16,558.90
  • Median Traditional Contracted Pricing Via Transparency Tool — $25,777

Patient Responsibility — 20% Coinsurance

  • Actual Using ClaimDOC — $3,311.79
  • Average Traditional — $4,991.60
  • Real-Time MEMBER SAVINGS — $1,679.81

Compared to the overall savings of the plan, this may not look like much. But imagine you are a typical working class American living on a tight budget with almost nothing in savings. The number of Americans in debt due to medical claims is well documented and staggering. The savings shown above are massive to a family trying to make ends meet. It can be disappointing to see brokers and HR leaders who may be doing really well financially be unable to put themselves into the shoes of the working class. Leaders like this are a reason more plan sponsors aren’t using a network replacement strategy.

Most of America is sitting in the backseat waiting for others to drive new changes that will solve their problems. We must lead and serve better than that. Every employee who earns a paycheck at your company deserves to be able to keep as much of their paycheck as possible. Do not take a back seat. Instead, take the wheel and drive.