Inevitably, as your employees age they’ll require more extensive care, such as routine surgeries or other, more invasive treatments. Today more than ever, plan members have numerous choices for quality healthcare facilities that can perform these services. While quality is of utmost importance when selecting a place-of-service, cost is a significant factor as well. There are facilities that can perform a complete knee replacement for one-half of the cost[1] of others. In addition, lower cost doesn’t necessarily mean lower quality[2].
Including an incentive-based program focused on quality and cost can help the benefit plan provide a higher level of benefits to members while saving the plan money. But waiting until plan members need procedures to locate a high-quality, low-cost place-of-service is like learning how to use a sword during your first sword fight. You could end up with a nickname like Captain Hook. How can your plan position itself to be ready for these procedures long before they’re needed?
What is a Preferred Place-of-Service?
A preferred place-of-service is a specified high-quality, non-hospital healthcare facility. For example, an Ambulatory Surgical Center (ASC) is an excellent choice for an outpatient surgery or procedure, such as a knee replacement, in comparison to a hospital. ASCs offer numerous benefits[3] for such outpatient procedures, including:
Less Stress
Same-day discharge (meaning no expenses for overnight hospital stays) and recovery at home provides patients with a less stressful experience overall.
Flexible Scheduling
Not handling emergencies like hospitals means ASCs typically stay on schedule more often. Likewise, ASCs can work around the patient’s schedule and can usually book their appointments sooner.
Lower Cost
Since ASCs only perform procedures on an outpatient basis, there are no added expenses for overnight stays and other hospital-related charges.
Member Education, Embedded Triggers, and Incentives
The plan sponsor can take three (3) steps to encourage members to use a preferred place-of-service:
Step 1
Member Education. Educating members should be more than an employee meeting once a quarter (or even just once a year!). Informational emails, flyers, posters, and videos are all excellent ways to keep these benefits on the member’s radar and reinforce their understanding.
Step 2
Embed Triggers within the Plan. Plan Sponsors should establish a trigger within the claim process (i.e., workflow) that notifies the plan when a precertification request is submitted for a member’s prescribed healthcare service. For example, a provider’s office sends over a precertification request for a member’s MRI on their knee. Since an MRI could soon lead to a more costly event (such as a knee replacement surgery), this is the perfect time to contact the member and guide them to a lower cost place-of-service for both their MRI and any potential future procedures. Using this “collaborative care” model, both parties (the member and the plan) benefit from the high-quality, lower-cost care the member will receive.
Step 3
Incentives. When launching or reinforcing this kind of benefit, it may be necessary to create an incentive for members to utilize these benefits. For example, the plan could cover MRIs, CT scans, or PET scans at 100% when members use an in-network, freestanding (i.e. not hospital-owned) imaging facility. Though the plan would be paying the entire cost of the service, since hospitals often charge anywhere from three to 10 times more[4] for enhanced imaging than freestanding facilities, this incentive wouldn’t just save the member money but the plan as well.
All three (3) of the steps mentioned above must be present in the plan to achieve a measurable difference. Only providing education without quality tools to encourage members simply won’t work.
At GBS, we understand that finding solutions for high plan costs could mean the difference between being able to offer a benefit plan or not. Providing benefits that help families keep costs low in turn improves your health plan’s sustainability. In addition, by collaborating with your plan members, your plan is more likely to be perceived as true “benefit” and thus improve member engagement. Besides the cost savings and improved engagement, such benefits can help in the recruitment and retention of new talent.
[1] This statistic is based upon pricing information provided to GBS by medical providers.
[2] Source: American Academy of Orthopaedic Surgeons website at https://www.aaos.org/aaosnow/2019/sep/managing/managing02/#:~:text=ASCs%20have%20been%20shown%20to,smaller%20and%20more%20personalized%20teams
[3] Source: Johns Hopkins Medicine website at https://www.hopkinsmedicine.org/health/treatment-tests-and-therapies/outpatient-surgery
[4] This statistic is based upon pricing information provided to GBS by medical providers.