The BenefitsPRO Broker Expo is the place to be for advisors looking to implement new health care strategies for their clients. There is general agreement that the current health care model is broken, overburdening employers and employees with costs while underperforming on outcomes.
"If we continue to do the same things, we're going to get the same results," said panel host Lester Morales. "I don't see that anybody is super happy with how the current system works today."
Morales, founder and CEO of Dystrupt Healthcare, was joined by Josh Butler of Butler Benefits & Consulting and High Plains Health Plan, Adam Berkowitz of Level Health, and Doug Geinzer of High Performance Partners. The panelists were united by their real-world experience implementing direct contracting, which cuts the typical major insurance carrier out of the equation and instead focuses on relationships between the payer (the employer) and the provider. Not only have they lived to tell their tales, they have become evangelists for the model.
"The biggest thing is that employers in the carrier-based model have no voice and no say. In our model, the employer gets to have a voice," Butler said. "They all want the same things: lower costs and better-quality benefits."
Morales described the direct contracting model as a win-win-win: a win for employers, a win for employees, and a win for providers. But what exactly does that mean? While the panelists shared a number of positive outcomes for each of these stakeholders, one rose to the top: more money in everyone's pockets (except for the carrier).
One lever employers have used over the years to ease the pain of increasing costs is higher deductibles and copays, encouraging employees to have more "skin in the game" when making health care decisions. Instead, it has created a headache for everyone involved. As Morales explained, "the provider doesn't want to collect it, the employer doesn't want to charge it, and the employee doesn't have the money in the first place."
Geinzer noted that, between chasing carriers to reimburse claims and carrying the balance of patients' unpaid deductibles, providers spend approximately 29 cents of every dollar they collect trying to collect that dollar. And the time it takes to collect those payments from carriers can range from 90 to 120 days, or even longer.
Direct contracting removes that "administrative friction," allowing providers to keep more of the revenue they earn. In turn, they can accept lower rates. "It goes right to the bottom line," Geinzer said. "They know when they're getting paid, and how much. They're no longer spending 29 cents of their dollar to get paid."
Employers can pass the savings from those lower rates back to employees by reducing, or even eliminating, deductibles when they choose certain providers.
Butler described how it works in High Plains Health's three-tiered model: "Think of it as a target. At the center is a bullseye. That's our tier one network, directly contracted. When our members seek care, they're financially rewarded with a $0 deductible and $0 copay. Nothing speaks like the almighty dollar. You want to talk about skin in the game, forget the $5k deductible. Give them a $0 option and watch what they do."
As for concerns that a zero-dollar deductible drives overutilization and waste, none of the panelists felt it was an issue. If claims increase after implementation of a direct contracting model, it may be because employees are finally able to afford the care they've been putting off. "The one thing deductibles have never done is lower the cost of health care," Berkowitz said. "That's the opposite of what we've been promising they would do."
The panelists did note that direct contracting isn't all sunshine and roses. Because the financial benefit to all stakeholders is a key part of the model, it is the aspect you have to get right. "When you promise the provider you're going to get paid in 15 days or less, they better get paid in 15 days or less," Geinzer said. "You have to live up to your promise."
Photo: Lauren Lindley Photography
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