By Steve McClung
In 2023, Hines implemented a unique design for their own health plan. Leveraging our OpusOne Concierge program which offers members options and incentives to make informed decisions around their healthcare.
In a traditional network design, for those cases where Hines Concierge was able to assist, the plan would have been billed 37K, paid 13K and the members would have paid $3,255 out of pocket. Often that “typical network” is measured in terms of a percentage of savings, which in this case is 56%. Peeling back the layers a little, the realization is that members would have selected from “in network” providers, who could bill whatever they wanted, and they would have been paid at some sort of contracted rate. That contracted rate would have worked out to nearly 5 times Medicare, much higher than the national average of networks and despite the 56% savings, not a very good result for a small to midsize company looking to manage medical costs. None of this would be visible to the plan however, as traditional network performance simply shows up in an annual premium increase, with single digit increases considered good and double digit considered average.
Annual premium increases being compounded over several years has pushed many plans to notice that traditional networks offer great discounts, but when benchmarked against Medicare the performance is not as good and therefore, they have begun to ask if there are other options. In consequence many plans have moved to a Reference Based Pricing (RBP) model . In these “nontraditional” plans, the plan simply pays the provider a percentage of Medicare, often 150% of Medicare or thereabouts. In these instances, some providers will refuse to provide treatment as they are not contracted and refuse to accept the benchmark payment amount. Members can pick from a list of “friendly providers” or go wherever they want and hope that the provider will accept the insurance plan. An RBP plan would have performed much differently than a traditional network for the same cases, with billed charges being the same, but the plan paying $4119. Assuming the provider accepted benefits and did not balance bill the member outside of the plan design, the members would have paid $1,029.
The actual experience for the Hines employees was a little different from either of these two options. In each of the 8 cases involved, the Hines employees were offered a selection of providers to choose from for their medical treatments, they were provided with an overview of the care quality and cost information around each of the options. Behind the scenes, Hines concierge team had shopped the services around for the most convenient, high quality and cost-effective options available for the member given their unique needs. The team negotiated with each of the providers prior to care to accept a reasonable rate and obtained a signed agreement for the care that each of the providers were willing to accept as fair payment. The employee was presented with these options including those that did not accept a negotiated rate. Each of the employees made the best decision for their respective situation and Hines waived all employee responsibility for those who made decisions that aligned with the best quality to cost options. As a result, for the plan year 2023, Hines was billed $10,500 less than we were originally quoted for the care at the first requested location. The plan paid a total of $4,047.74, or about 138% of Medicare. When measured in terms of percentage discount, this results in an 85% discount, which does not appear quite as good as the RBP option, but crucially cost the plan less dollars and most importantly had $0 cost for the employees.
Plan design can be broadly categorized into two major groups: Traditional Network or RBP. Within the Traditional Network, there are many different options including HMO, PPO, and EPO. Exclusive Provider Organizations (EPOs) can drive higher savings through reduced choice, some larger employers even make the leap to direct contracting for the EPO portion and wrapping that with a PPO for all other options. In the RBP world, choosing the percentage of Medicare (somewhere between 120% and 175%), as well as all-inclusive bundled solutions (TPA, RBP vendor, Concierge and UR/CM all under one roof) or pure RBP with the vendor pricing to Medicare and attempting to negotiate or even offering some contracted providers where possible and the Broker/Group needing to find a TPA, Concierge and UR/CM vendor that can work with the specific plan design and RBP vendor.
Regardless of the plan design, an informed member base can help drive savings. All the plan design options described above could benefit from having a better-informed member base. The Hines case study highlights the difference between plan design and concierge that are unbundled and passive in their approach and a fully engaged, knowledgeable and customer service focused team that are guiding members to make informed decisions. Concierge is a term that is widely used and just as broadly defined. It can range from providing an app or website for members to make their own decisions based on interesting and informative graphics to a team that will make your appointments for you and many flavors in between. Hines defines it in a rather simplistic way, it is a team of people that are highly knowledgeable about the healthcare system and who care deeply about the people they are helping. The system is too complex to navigate on your own, even with a fantastic app and someone to make your appointment for you. The unique situation you are presented with needs to be understood and navigated for what it is, we can help!
To learn more please message bmarcoux@hinesassoc.com
