Monday, June 24, 2013

Consumerism Works: New Plans Tell Employees That the Plan Will Only Pay up to a Certain Max on Select Procedures

Healthcare prices moderate when consumers are involved in spending their own dollars.  And Health Savings Accounts coupled with high deductible cost-sharing PPOs are a great way t accomplish that.  However large plans are now toying with a new way to limit exposure on the more expensive procedures (like after you have hit an out of pocket maximum on a plan or tapped out a Health Savings Account.) Employers Test Plans That Cap Health Costs -

Hoping to cut medical costs, employers are experimenting with a new way to pay for health care, telling workers that their company health plan will pay only a fixed amount for a given test or procedure, like a CT scan or knee replacement. Employees who choose a doctor or hospital that charges more are responsible for paying the additional amount themselves.
Although it is in the early stages, the strategy is gaining in popularity and there is some evidence that it has persuaded expensive hospitals to lower their prices.
In California, a large plan for public employees has been especially aggressive in using the tactic, and the results are being watched closely by employers and hospital systems elsewhere.
Under the program, some employees are being given the choice of going to one of 54 hospitals, including well-known medical centers like Cedars-Sinai and Stanford University Hospital, that have agreed to charge no more than $30,000 for a hip or knee replacement. Prices for the operation normally vary widely in the state, with hospitals billing from $15,000 to $110,000 for the same operation, a spread that is typical for much of the nation....
Overall costs for operations under the program fell 19 percent in 2011, the program’s first year, with the average amount it paid hospitals for a joint replacement falling to $28,695, from $35,408, according to an analysis by WellPoint’s researchers that was released Sunday at a health policy conference.
The study found no impact on quality of care.