When it comes to healthcare, employers often think there are two choices: get insurance for their employees, or don’t. The problem with these options is that if your employees need care, it’s prohibitively expensive and difficult to obtain, or they go without insurance.
The problem with insurance is that while premiums are always upfront, the true cost of care is hidden. We’ve all received bills for services we thought were covered, or been shocked by the price our insurer negotiated for care. Additionally, insurers always insist on a select group of in-network providers, seemingly regardless of their cost or quality of care.
Luckily, there are alternatives to traditional insurance that employers can choose to ensure high quality of care for their employees to lower costs and make them completely transparent.
Direct Contracting is when employers contract directly with providers, essentially taking the place of an insurer. This may seem like the little guy going up against the big guy, but consider this: In 2020, UnitedHealth, the largest healthcare insurer in the US, pulled in $257.1 billion in revenue, but only (“only”) $15.4 billion in profit. That’s a lot of money, but it’s also wildly inefficient, needing almost $17 for every $1 netted. And who pays for that inefficiency? You and your employees.
Because you set the terms with the providers, costs for care, both premiums and out-of-pocket, are completely transparent. Neither you nor your employees will suffer unexpected costs or surprise bills. And of course, because you eliminate the “middle-man” of insurance and their inefficiency, you and your employees can save on the true cost of care.
Another alternative to insurance is Bundled Pricing. Generally used for surgical procedures, Bundled Pricing takes the place of the insurer, working directly with the provider, except this time, you arrange an all-in-one price per procedure.
With surgical costs accounting for 31% of annual healthcare spending, it makes sense to prepare and know your costs ahead of time. A RAND Corporation study found that when employers used Bundled Pricing, they saved an average of $4,229 per procedure. In addition, if complications occur, you and your employees pay nothing more than the bundled price negotiated.
Finally, the greatest benefit of both Direct Contracting and Bundled Pricing is that you get to make arrangements with the high-quality providers of your choice. There’s no worry that your employees will end up at a cut-rate clinic simply because it was close to home and “in-network.”
There are more options than insured or not-insured. With Direct Contracting and Bundled Pricing you can provide your employees with the highest quality care while saving money. No middle-man required.