Employer Health Insurance and Reference Based Pricing


#026 – HMO PPO EPO WTF IDK NVM Part 2 looks at how HMO and PPO networks have run their course and what approach employer health insurance is now considering and what employees can expect in the near future.

Healthcare Is Not Health Insurance

The entanglement of healthcare and health insurance has led to rampant medical inflation for decades, much higher than the rate of inflation for the overall US economy.  And, the genesis of the rapid increase in the rate of medical inflation can be linked to the introduction of Medicare in 1967.

Can HMOs Stem Tide of Rising Costs?

President Johnson signed the law creating Medicare, so President Nixon followed a few years later by signing a law providing for the growth of Health Maintenance Organizations (HMOs) as a way to slow the pace of rising medical costs.  However, HMOs proved to be financial failures.  So, they either went out of business or changed their business model.

PPOs Pick Up Where HMOs Left Off

Preferred Provider Organizations offer insured patients choice and flexibility instead of the all or nothing HMO model.  PPOs succeed in offering pricing discounts to insurance plans in return for the insurance company steering its insured customers to select hospitals and doctors.

Today’s PPO and HMO Plans Have Run Their Course

PPO and HMO plans no longer provider effective discounts.  To the contrary, medical providers have wasted and abused nearly $1 TRILLION ANNUALLY, according to a study by the Journal of the American Medical Association. So, employers are taking pricing into their own hands and bypassing PPO and HMO networks.

Learn about JAMA Waste Report here

Reference Based Pricing

Employers who pay the vast majority of the premiums for over 150 million Americans with employer health insurance are tired of the antiquated HMO/PPO offer of discounts and are charting a new course.  As a result, employers are not relying on so-called networks and are negotiating the price of healthcare services up front.   Today, employers are engaging healthcare providers through Reference Based Pricing so they can take control and lower their costs.

Learn about Reference Based Pricing here

The Big Heist

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Next up, we’ll look at who your health insurance company really is……..

Set up your Health Savings Account here….I prefer Lively HSA

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