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As healthcare costs continue to rise, many employer health plan sponsors struggle to cover their employees without breaking the bank. Unfortunately, many keep returning to the same old solutions: a monopoly of legacy insurance carriers with high-priced plans and suboptimal benefits and member support. Read More about The Top 5 Excuses Why Employers Don’t Drop Their Legacy Insurance Carrier
From stagnant wages to crushing medical expenses, employee net income has plummeted, preventing American workers from saving adequately for retirement. Pending legislation seeks to alleviate this crisis while a growing number of employers are boosting retirement benefits by reducing health care costs. Read More about How to Boost Employee Retirement Benefits by Slashing Health Care Costs
From targeting the Affordable Care Act to clamoring for COVID relief funds, annual federal healthcare lobbying expenditures have risen a staggering 70%. Nearly $714 million has been spent influencing legislation to favor the industry and maintain obscene profits. Who’s spending all this money? Read More about Annual Health Care Lobbying Rises 70% to a Whopping $714 Million
Multiple studies affirm that millions of Americans are underinsured or completely uninsured. These grim results include the 54% of the population covered by employer health plans. While outrageous healthcare and premium costs are part of the problem, it’s clear employers need to step up and do better. Read More about What Good is Health Insurance That Robs Benefits and Hurts Health?
In the ongoing battle for talent acquisition and retention, 2 in 3 employers plan to expand their employee benefits program in the next 12-18 months. Yet 8 in 10 say out-of-control health care costs impede their ability to stay competitive. Is it really possible to compete without overspending? Absolutely! Read More about How to Fund Competitive Benefits to Attract and Retain Talent
A study published in the journal Radiology confirms what we already know — that there’s no rational explanation for wildly divergent costs for the same test at the same hospital or even between hospitals. And with every negotiation, it appears that hospitals hold the winning hand.
The vast difference between the lowest prices for common imaging services is astonishing. Likewise for the highest price, which on average can be nearly four times as much as the lowest. What’s worse is that these disparities exist not only between hospitals, insurers, and employers, but are found in different health plans offered by the same insurer.
The study shows that more expensive radiology services tend to have wider price variations. The most extreme example is a brain CT scan, whose prices ranged from $134 to $4,065 at the same hospital. How is it possible that the highest negotiated cost is over 30 times more than the lowest?
Even Ge Bai, Ph.D., a professor of accounting and health policy at Johns Hopkins University and one of the coauthors of the study, was surprised by its findings. In an interview with Fierce Healthcare, Bai noted that commercial health plans are “leaving money on the table” when negotiating with hospitals. This often contributes to higher out-of-pocket costs for insured patients and higher premiums for both employees and health plan sponsors.
According to Bai, “If insurance companies’ incentives had been perfectly aligned with employers, we would have observed little variation in negotiated rate for a given hospital across different health plans administered by the same insurance company.”
It’s clear that hospitals and insurance companies have zero allegiance to employers and continue to prioritize their profits over the needs of health plan sponsors and their members. Fair Market Payment™ is an immediate and effective solution for avoiding this price gouging variation and healthcare overspending.
The Inflation Reduction Act is a great first step toward lowering prescription drug prices and out-of-pocket expenses for Americans covered by Medicare. What’s unknown is how this will impact future Rx costs for members of employer-sponsored plans. How can employers cut costs now without reducing care?
Recent commentary asserts that drug manufacturers will experience losses as a result of this new legislation and are likely to “shift some of the losses onto commercial payers, leading to higher drug costs for employer-sponsored plan members. We’ve already seen this scenario play out in health care, as Medicare pays considerably lower rates for the same service compared to commercial plans, with hospitals and providers often increasing charges for employer-sponsored plans to make up for the difference.”
The author recommends that employers work with their Pharmacy Benefit Manager (PBM) to better understand their pricing practices and terms of service. While all efforts to improve communication and transparency are commendable, the Federal Trade Commission has already exposed the controversial, self-serving practices of six of the largest PBMs whose sole purpose is to limit competition and increase profits.
Employers and plan sponsors need to go beyond understanding the machinations of this corruption and implement a contemporary pharmacy benefit plan that prioritizes patients over secret profits.
According to the PBM Accountability Project, “It’s no coincidence that out-of-pocket drug costs are rising, while PBM profits are increasing. The process of pricing our medications is unknown to many Americans. The opacity and complexity of the drug pricing system undermines the possibility for dynamic, price competition between PBMs — putting consumers at a disadvantage.”
Vitori Health’s lowest net-cost pharmacy administration offers employers the antithesis of predation and disadvantage. It includes unmatched technology-enabled contracting and built-in advocacy on behalf of members who are reliant on high-cost specialty medications. By securing member financial assistance from pharmaceutical manufacturers, Vitori also removes plan sponsor costs and adds value as cost cascading occurs in the market.
It’s time to stop letting the fox guard the hen house. Contact Vitori Health for information about our non-PBM VitoriRx plan that gives employers and members a clear advantage.
Vitori Health has been recognized as a Market-Shaping Enterprise (MSE) by Catalyst for Payment Reform (CPR). Independent and influential, CPR’s thought leaders empower health care purchasers to proactively improve today’s dysfunctional healthcare market. Vitori is proud to advance this mission.
CPR has published a white paper that examines the evolution, mechanisms, and strategy behind MSE solutions. It also explores the most important questions health care purchasers should consider when evaluating an MSE vendor.
As part of its research, CPR interviewed Neil Quinn, Vitori’s Chief Strategy Officer, for his perspective on current market practices and how MSEs can make a difference.
CPR | What’s your “theory of the case” as to why health care costs and prices continue to rise unabated?
QUINN | Costs and prices continue to rise unabated because there are no real countervailing forces to reduce the systemic financial inflammation. This has created a chronic business interruption disease for employer-purchasers that constantly drains dollars, hours, and energy away from core business priorities. At 20% of GDP, U.S. health care is a monopolistic mega-business that’s increasingly driven by shareholder profits, mergers and acquisitions, and massive multi-faction lobbies.
Unfortunately for employers, it has been generally unfettered by government public-good and antitrust guardrails and is not beholden to free-market forces. All actors in the health care system continue to maximize their financial interests and advantage to the detriment of employer-purchasers and their people.
CPR | Why have traditional health plans been unable to stem the tide?
QUINN | Too often the firemen are the arsonists. Efforts by traditional health plans to control costs and prices are analogous to spitting into an out-of-control fire. With deeply embedded conflicts of interest, these plans have neither intrinsic motivation nor external pressure significant enough to motivate meaningful and durable solutions.
Entrenched stakeholders aren’t going to disintermediate themselves. Their existing business models are reinforced by an interwoven collusion with provider systems, broker-advisors, and other healthcare matrix entities to collectively maintain shareholder priorities.
CPR | What types of strategies have the greatest potential to rebalance market power toward health care purchasers and consumers?
QUINN | Market-shapers are always great simplifiers. Trying to rebalance market power using broken traditional components results in a whole that is less than the sum of its parts. At best, it is simply managing the racketeering. The strategies with the greatest potential are those that recuse themselves of legacy industry elements and economics.
The sweet spot includes transparency-focused solutions such as Fair Market Payment™, net lowest cost Rx pricing technology, direct primary care, and bundled value-based contracting. These and other strategies create a consequential rebalancing of market power towards purchasers, while often removing financial barriers for plan members and patients.
CPR | On the flip side, why can Vitori as a non-traditional entity succeed where traditional models have failed?
QUINN | We aren’t saddled with the “hammer and nail” rigidity that maintains the status quo. Our success begins with the high-minded goal to truly liberate employer-purchasers and plan participants. Independence from legacy system components and economics gives us the freedom to solve problems created by that system without conflicts of interest and furtive revenue streams that deter traditional stakeholders from pursuing meaningful strategies. This unencumbered business model has given us the ability, agility, and drive to rapidly fail, adjust, and succeed.
CPR | What would you say is the greatest challenge to growing your business?
QUINN | One of our greatest challenges is getting past the “room with no windows” that keeps employer-purchasers in the dark about proven, better health plan alternatives. They are unaware that their broker-advisors and legacy insurance carriers hide these options and gaslight them into a disquieting Stockholm syndrome loyalty to their captors.
We routinely challenge a deeply embedded Principal-Agent problem built on enormous information asymmetry. The Principal (employer), who should be well informed and at the heart of the transaction, is instead veiled from price, quality, and value purchasing comparatives. The cabal of Agents (brokers, insurers, provider systems, PBMs) does not act in a transparent and trustworthy capacity, perpetuating economic and structural conflicts of interest.
CPR | What do you need from employer-purchasers to make your product successful?
QUINN | Employer-purchasers need to let go of their “devil you know” mindset and stop buying into the narrative that employees can’t handle change. Although there may be risks in taking action, they are far less than the risks of comfortable inaction that have enabled a vast transfer of wealth from working Americans to the medical industrial complex.
As legal fiduciaries to their health plan participants, employers need to ask themselves: Do traditional insurers/payers really have my organization’s and employees’ best interests at heart? Can I afford to ignore the financial competitive advantage that proven alternatives offer? What has happened year-over-year to employee disposable income and health care financial risk through our moral inertia?
As a Market-Shaping Enterprise, Vitori Health joins CPR in its commitment to rebalancing power in the healthcare market. Every aspect of a Vitori Health plan makes it easy for employer-purchasers to gain control of costs and ensure a better, more compassionate member experience.
Catalyst for Payment Reform (CPR) is an independent nonprofit corporation whose mission is to catalyze employers, public purchasers and others to implement strategies that produce higher-value health care and improve the functioning of the health care marketplace. CPR does not partner or endorse offerings from Vitori Health or other vendors.
Paying healthcare claims should be transparent, less costly, and stress free but for many plan sponsors, it is anything but. Insurance company discounts off price-blind billing fuel rising costs, and referenced based pricing (RBP) antagonizes providers and members alike. A better approach is Fair Market Payment™ (FMP). Read More about Fair Market Payment™: Big Savings, Less Friction than BUCA or RBP Plans
America… the land of the free and the home of the world’s highest health care costs and lowest life expectancy. While you may be familiar with such global comparisons, you may be surprised by the wide disparities in health care quality, affordability, and access, between and even within our states.
A recent WalletHub study ranked the best and worst states for health care based on these and other criteria including infant mortality rate, doctors and dentists per capita, and the number of adults who have not seen a doctor or dentist in two years. The results are alarming, and the challenge is daunting.
The study includes an interactive table that can be sorted by rank, cost, access, and outcomes. The top two performers are Minnesota and Rhode Island, which are among the top 10 in all four categories. In three out of four categories are Colorado, Connecticut, Maryland, Massachusetts, and Vermont.
Results at the other end of the spectrum are more nuanced. Massachusetts, for example, has high costs but ranks #1 in access and outcomes. Others, like Alabama, Alaska, Louisiana, Oklahoma, and Texas, rate the most poorly in three out of four categories.
While the WalletHub study focused on health care in general, the March of Dimes dug deeper into maternity care. This is especially important because in poorly rated states, there is a direct relationship to high infant mortality rates.
The March of Dimes study identified what it calls “maternity care deserts.” These locations are defined as “any county without a hospital or birth center offering obstetric care and without any obstetric providers.” Obstetric providers include obstetrician-gynecologists, certified nurse midwives, and certified midwives.
It’s hard to imagine that nearly 7 million American women of childbearing age now live in a county with limited or no maternity care services. One-third of U.S. counties, more than half of which are rural, are now maternity deserts. And that number is growing as local and regional hospitals get gobbled up by large hospital systems.
Employers can take an active role in mitigating the nation’s healthcare mess, at the local and individual levels, by choosing an integrated employee health plan with national coverage. It’s best to seek out a next-generation health plan designed specifically to reduce overspending while improving access to quality health care, regardless of location.
Given the difficulty navigating our broken healthcare system, a preferred employee health plan should also include high levels of member support. From answering questions to locating qualified providers, members deserve personalized assistance to get the best care at the lowest cost.
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