Challenging high Healthcare costs in ESI (Employer Sponsored Insurance) with Care2care solutions
By ANDRE WENCKER
CEO, Care2Care
I. COSTS ARE THE CULPRIT FOR (TOO) HIGH US HEALTHCARE SPENDING, STUDIES SHOW
A fundamental study, published on march13, 2018 by JAMA is, in our view, putting an end to a long controversy raging over whether the extraordinarily high level of spending in the US, the double at least compared with most other OECD countries, was due to excessive use and waste in unneeded care, or to prices.
The answer is clearly : prices, as Uwe REINHARDT, the well-known health economist ousted, as early as 2003, in a famous article titled : “It’s the prices, stupid !”, published by Health Affairs. The data show that the United States spend more on health care than any other country. However, on most measures of health services utilization, the United States is below the OECD median. This strongly suggests that the difference in spending is caused mostly by higher prices for health care goods and services in the United States.
Uwe Reinhardt’s paper can be read here
An abstract of the JAMA study can be consulted here:
March 13, 2018
Health Care Spending in the United States and Other High-Income Countries
Irene Papanicolas, PhD1,2,3; Liana R. Woskie, MSc1,2,3; Ashish K. Jha, MD, MPH1,2
JAMA. 2018;319(10):1024-1039. doi:10.1001/jama.2018.1150
Both studies were based on data mainly produced by OECD (Organization for Economic Cooperation and Development) and compared the US with ten other highest income countries, including France.
The JAMA study was welcomed by a range of press articles. We selectedone by Margot Sanger-Katz that we found particularly interesting.
https://www.nytimes.com/2018/03/13/upshot/united-states-health-care-resembles-rest-of-world.html
Why Is U.S. Health Care So Expensive? Some of the Reasons You’ve Heard Turn Out to Be Myths
In a new, detailed international comparison, the United States looks a lot more like its peers than researchers expected.
March 13, 2018
Why is this JAMA study so important?
Because one of its numerous key findings is that “there is little evidence that efforts to reform US health care delivery have had a meaningful influence on controlling health care spending and costs”. This conclusion perfectly reflects the ESI’s (Employer Sponsored Insurance) many efforts of the last decade to curb spending, resulting in lower utilization and soaring prices. A recent study, released by HCCI, explains this very clearlyFor more on this study please download our white paper from our website). So it is time to find new solutions.
II. CARE2CARE SOLUTIONS TO HELP EMPLOYERS EFFORTS CURB COSTS BUT NOT UTILIZATION
The different solutions employers and their advisers are working on have been recently presented by Suzanne Delbanco, executive director of Catalyst for Payment Reform, an independent, not for profit organization, in a feature article first published in EBN (Employee benefits News).
These include:
- Tiered or narrow networks: They aim at giving access to a subset of providers selected for their relative affordability, sometimes adding a quality component to the selection, Miss Delbanco says.
The top ranked French Healthcare facilities Care2care has selected in total independence on their quality outcomes, genuinely meet these two core criteria.
- Centers of Excellence (COE): this is a type of solution where large employers make their workforce “travel across several geographic markets, to a carefully vetted provider group”, and letting providers compete for price and quality, as Suzanne DELBACO is putting it;
Care2care is offering these COE to all kind of employers, regardless of size, market sector or other differences: let their employees travel to France, (as tens of millions people do every year, among them over 4 million Americans), to find high quality care in the best French hospitals for high costs procedures , at prices 2 to 5 times lower than in the USA.
- Reference based pricing: this third way to cut costs deserved a thorough analysis: in this case the employer sets a price, based on market analysis, at or below which he is willing to pay for a procedure (knee replacement, for instance). If surgeons want employees to select them, they need to offer a price that meets or even beats the reference price set by the employer. “Otherwise, employees will be the ones bearing the brunt of the higher than competitive price as they pay the full difference over the reference amount,” Miss Delbanco writes.
It is interesting to add that often the prices set by employers are calculated in reference to prices negotiated by Medicare: between 150% and 200% of the Medicare price is a frequently used reference range, we have learned.
Once more, we can say that Care2care solution “beats” reference based pricing, since prices we can offer in France are, by their very construction, at or below Medicare prices.
Lastly, two additional factors to be considered:
- savings on drugs purchased in France can offset the costs of travel;
- outcomes of French hospitals compare favorably to those of American hospitals.
We are convinced that Care2care’s solution should be carefully considered by every HR executive in search of a better and more innovative healthcare benefit for the organization and its team members.
