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Is Reference Based Pricing Another Sign of Employer Desperation

Denny WeinbergDenny Weinberg

Don’t be surprised that your traditional benefits broker or consultant has suggested you consider the newest “breakthrough” in employer self-funded coverage solutions, Reference Based Pricing.

Like its most recent cousins, Level Premium Plans or Captive Programs,  this one suggests care and caution too.

Efforts, like this, designed to shore up an old and broken system with creative workarounds, might represent more desperation than creativity.

This newest idea,  Reference Based Pricing, is really not new; it is a throwback to the old Indemnity Insurance days, when benefit plans simply paid a certain amount for a medical procedure and that was that. The worker or dependent was left dealing with the balance as best they could with their care providers.

Today’s version uses more complex data analytics to determine in advance what a care provider “is entitled to be paid” based upon common patterns of care and billing including their clinical peers.

These programs assume your care providers should yield to these analytics, and be satisfied with the resulting payment amount, even though under this model those care providers have no payment contract or network status, and you may be exposed to that difference.

Like other alternatives, this one is really more a natural reaction to today’s antiquated coverage model than a breakthrough in worker benefits.

Meanwhile, personalization solutions such as Hixme create a new structural approach to traditional larger employer health coverage itself:

Why continue to put bandaids on the broken system, when perhaps its time to move beyond that broken system altogether for a better one?

 

 

 

Denny Weinberg is a 35 year veteran executive in healthcare financing and operations. Prior to his 4 years as investor and CEO with Hixme, his broad background includes a 20 year tenure CEO of a number of Anthem's largest operating companies. Denny has managed a portfolio of early stage companies in the Health/Medical arena as well as other industries. He has also served as board member, advisor and consultant to both private equity-backed, and publicly traded Blue Chip companies.

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