As more employers seek out alternatives to high cost health care, solutions like reference-based pricing, also called metric-based pricing, are becoming more mainstream. It can be a complex concept that may be misunderstood by employers, but as a broker, you can make your clients aware of this exciting solution. Reference-based pricing offers substantial savings, and partnering with a qualified solutions provider puts you in the best position possible to offer strategic counsel to clients who are exploring whether they should make the switch.

It's not uncommon for employers who are intrigued by the cost savings and control that comes with reference-based pricing to be worried about leaving their familiar PPO plan behind. This is often coupled with apprehension about how reference-based pricing may cause disruption to their employees, so it's your job as broker to vet options and find a partner who aligns with your clients' needs and objectives.

Choose a partner with experience and expertise

With more and more solution providers to choose from, it's key to evaluate the industry and look for partners that are trusted and experienced. That means they are open to site visits and welcome prospective clients, they sign on as a strong plan partner or co-fiduciary, and they offer expert help in assisting with the transition from traditional insurance to reference-based pricing.

Site visits can be invaluable

To truly understand who is representing your client, a dedicated broker should request to see the company's operation in person. A site visit can help brokers understand if the reference-based pricing provider is financially secure, committed to their clients and if they have adequate resources to act on behalf of each client.

Experienced reference-based pricing partners will also encourage reference calls with their current clients, which can provide the broker with an opportunity to view performance metrics firsthand and receive valuable information about how relationships with solution providers progress over time. With first-hand knowledge of the reference-based pricing solution's day-to-day operations and a look into a successful reference-based pricing client, you can rest assured you are recommending a dedicated and experienced organization to meet your clients' needs.

Why co-fiduciaries matter

As you evaluate different reference-based partners, ensure that the solution provider you select is fully invested in the success of the health plan. It's important to consider partnering with a solution provider that is willing to sign on as a co-fiduciary, since they may be asked to assist in managing the financial assets of your client's plan, and stand shoulder-to-shoulder with your client.

Often, the biggest pain point for an employer about reference-based pricing is selling their employees on a “new” type of health insurance. Educate your clients and their employees on the solution by bringing in an experienced reference-based pricing partner early in the process to talk with your client and their HR leaders. Reference-based pricing experts are eager to assist and share their passion with employers.

The solution should encompass a robust plan for member communication, dedicated support specialists who the broker and client can contact directly, and convenient digital resources. Have a good understanding of what tools and member touch points are available with your recommendation.

Develop direct relationships with employers and medical providers in the community

One size does not fit all when developing reference-based pricing solutions. There is demand in the marketplace for negotiation and settlement options as well as direct contracting with hospitals and facilities. Reference-based pricing partners that emphasize collaboration with health systems, especially those with already established partnerships, demonstrate their dedication toward fair provider reimbursement and minimizing disruption for employees. Direct contracting can be a win-win solution for all parties, and experienced reference-based pricing solutions will be open to different options for each new client.

Stay actively involved in client's success

The best brokers stay engaged with their clients throughout the year and they are proactive in ensuring successful implementation of reference-based pricing solutions among their clients with the help of a reliable referenced-based pricing partner. For example, monthly reporting that demonstrates cost savings — which in turn show your value to the client — and dedicated support specialists that support the broker, not just the clients and members, can help make your job easier, too.

Steve Kelly is the co-founder and CEO of ELAP Services, a leading healthcare solution for self-funded employers based in Wayne, Pa. He is a recognized expert in the insurance, employee benefits and risk management industry, bringing more than three decades of experience solving his clients' complex healthcare challenges.

Instant Insights /

Alleviate concerns about reference-based pricing disruption

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