Dr. Herb Riemenschneider

Transcription

1 Why Consider Bundling and Transparency Now? October 24,

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3 Why consider bundling and transparency now? Health Care costs have risen dramatically. Deductibles have increased $5 6K in many plans. Deductible increases will follow. Many healthcare consumers have high-deductible health insurance and cannot afford to use it. The acceleration of these costs, particularly the deductibles, will spawn new methods to meet the demand for many of these services.

4 How will transparency & bundling bring about a satisfactory change? Transparency will result in a cash transaction, many times at cost which is less than the deductible. Implementation should be done CAREFULLY and SLOWLY!

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9 What the ACA actually does Tax more income Individuals - because they are paying more first dollar costs with after- tax earnings Reduce amount that can be deducted on tax returns must be more than 10% of adjusted taxable income Tax employers to fund ACA programs through the individual mandates

10 What the ACA actually does Shifts first dollar costs to individuals Force more out-of-network services, due to shrinking networks. Raise deductibles Reduces the amount employees may set aside on pretax basis (flex plans) $2,550 Won t allow employers to help pay for premiums to buy insurance coverage

11 What the ACA actually does not do Does not address: The Real Total Cost of Heath Care Does not address: Hospital acquisitions and mergers Does not address: Hospital acquisition of physician practices Does not address: Hospital acquisition of physician-owned facilities

12 What the ACA actually does not do Prevent the cost of health care from rising

13 What we do know American Academy of Actuaries report for 2016 shows premium costs are rising Risk pool does not have enough healthy people to pay for sick people The Real Cost of Health Care: Specialty Drugs, and more consumption when out-of-pocket limits are satisfied There are new taxes imposed on health care plans and insurance companies

14 One outcome is inevitable! Prices will continue to rise with less competition!

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17 What is Affordable under the ACA? ACA limits in-network maximum amounts $6,600 for individuals ($6,850 in 2016) $13,200 for families ($13,700 in 2016) These amounts do not include cost for coverage.

18 What is the effect of ACA on self-funded plans? Shifts more costs to self-funded plans & employers No annual limitation (ERISA) No lifetime limitation No pre-existing conditions Limited out-of-pocket maximums

19 Free Market Medical Association addresses the total cost of healthcare: Transparency in Pricing Real alternative for self-funded employees to control the cost of healthcare Real alternatives for employees, to be better consumers with the amounts they must spend to get healthcare

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23 What is pricing? A company must set its price for the value delivered and perceived by the customer

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25 The pricing objective You must first decide your position in your market

26 Analyze competitors Costs Prices Offers

27 Know your costs Fixed Costs Variable Costs Overhead Costs

28 The pricing objective Survival Maximize current profit Maximize market share Product- quality leadership

29 Cash price equality Pricing transparency is the first step to a consumer friendly market One cash price for all buyers. Seller defines price Buyers and markets decide if they will pay the price.

30 Making healthcare work for consumers Patients are the consumers All prices for end products (not intermediate), do away with charges, eliminate charges for the health care vocabulary All prices are bundled All prices are published Move from claims to invoices

31 The biggest mistakes in setting prices Not adjusting your overhead: Gross Profits= Total Sales -Total Cost of Goods sold Undervaluing your services Not using the same margin for all Products Not understanding the difference between margin and mark up Pricing based on what competition is charging- Price for Value Discounting instead of adding value Not raising prices annually to keep up with inflation

32 Pricing paradox Leads to Discounting Caused by fear and risk -Set prices too high and push patients away -Set prices too low, cut profits

33 Pricing paradox: Solution The more you Know, the less risk you assume Malcom Gladwell Pricing is all about getting as much information you can about your market, your patients and your internal numbers that drive profit.

34 Why direct pay prices are lower

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39 What is a CDHP? CDHP stands for consumer-directed health plan. What all CDHPs have in common, though, is a personal healthcare account your employees use to pay for medical expenses. Think of these plans like medical savings accounts, giving your employees more control over their healthcare dollars. Dr. Riemenschneider

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44 Reference Free Medical Market Association website

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