The following post originally appeared on blog.riskmanagers.us on September 24, 2018 by William Rusteberg. We are avid readers of his fantastic insights on the shifting healthcare landscape. This blog appears here, with William’s permission, in full and unedited. Enjoy.
Has your company tried, over and over again, to solve ever increasing health care costs? “Yes, of course we have, but nothing seems to work!” is a common answer. “We bid out our employee health insurance every year through multiple brokers, we reduce benefits to offset rate increases, and we even light a candle 24 hours before year-end renewal!”
Unfortunately we are all in the same boat. We are told that ever increasing health care costs are driven by a multitude of things such as advanced technology, aging population, cost shifting from government payers, etc. Remember those renewal notices of 30 years ago? They haven’t changed. Rate increases are still blamed on “advanced technology, aging population, cost shifting from government payers, etc.” The deception continues to this day.
The truth remains elusive when we don’t ask questions and demand answers. So what is the truth behind those renewal letters? The dominant underlying factor for ever increasing health care costs is rooted in partnerships formed between providers and third party intermediaries designed to maximize revenue streams through secretive contracts, and side agreements that you never see.
Costs are a function of what you agree to pay. Unfortunately most plan sponsors have no idea what rates have been negotiated for them through managed care contracts, yet they blindly pay anyway and wonder why their costs go up double digits every year. If they only knew the truth they would not be happy.
The problem is apparent: You can’t fix what you don’t see…………..
Usually, when told you can’t see a contract you are probably paying more than you should. The first step a plan sponsor should take is to find out what terms and conditions are common to most managed care contracts. Now better informed, they will begin to understand the primary factors driving health care costs and will be in a position to take corrective action.
They will have become empowered with knowledge the health care industry doesn’t want them to know and for the first time, will be in a position of strength in dealing with their broker, TPA, insurance company and the provider community. Thus, the greatest fear of those who now control health care costs will have been realized.
Once a plan sponsor better understands how health care financing is structured in this country they will be in a position to fix what they see. The results will be dramatic.
Finding the truth will not be easy since most rely on insurance agents and consultants who don’t know the truth either. So who knows what the truth is? There are few that do such as Health Rosetta certified agents and brokers.
“The Health Rosetta accelerates adoption of simple, practical, non-partisan fixes to our healthcare system. We help public & private employers and unions provide better care for 157 million Americans while reducing health benefits spending by 20-40%.” www.Healthrosetta.org