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.
- It is still built on the same platform that forces each large employer to create their own solution every year, largely unable to benefit from from collective pooling of risk unless they purchase increasingly expensive stop loss coverages.
- It still forces each worker and their dependents into the same coverage options regardless of family member needs, interests, or preferences.
- It still causes employers “to get nosy” with worker and dependent personal care choices and behaviors, a troubling part of todays traditional large employer system, given increasing privacy rights and concerns.
- And this one exposes workers and dependents to unknown balances and potentially nasty collection efforts from their neighborhood for-profit hospital.
Meanwhile, personalization solutions such as Hixme create a new structural approach to traditional larger employer health coverage itself:
- Leaves behind many of those systemic problems with the current system,
- Tailors coverage directly to each worker and family member, consumer-by-consumer,
- Aligns worker and employer incentives more completely
Why continue to put bandaids on the broken system, when perhaps its time to move beyond that broken system altogether for a better one?