Innovating Healthcare: Coverage and Cost

Solutions address challenges employers face in providing healthcare benefits

by RaeAnne Marsh

Not every business comes to the question of healthcare coverage from the same angle, but they share a common concern: cost. Innovations that impact cost in the healthcare space are coming out of two businesses with a presence in Metro Phoenix, one home-grown and one recently expanded here.

“The talent market is so competitive right now, and employees are looking for so much more than just salary,” says Melissa DiGianfilippo, co-founder and president of public relations at Serendipit Consulting. “They are comparing full benefits, and healthcare is a major part of that. Many of our employees are on the younger end of the spectrum, so this may be the first time they are getting healthcare on their own and it feels like a big deal to them, so we work to make it as easy as possible by offering some great solutions.”

While some see healthcare benefits as a way to set their business apart, others see it as a necessity. Geoff Stanisic, owner of YC’s Mongolian Grill, says this no longer seems like a benefit tool. “in the day of ‘carve outs,’ it was so much easier to lure someone with a tremendous healthcare package. Now, as an Applicable Large Employer (ALE), I am mandated to provide coverage and it is difficult to separate myself from others.”

FOCUS: REDIRECT HEALTH

Says Dan King, COO of Harmon Electric, “It is very important. Medical costs continue to rise for both employer and employee.” And he adds, “One of the biggest benefits to recruiting top talent is being able to offer free healthcare.” Crediting Redirect Health for being able to attract top talent and retain employees in a highly competitive market with limited tradespeople, he says, “I felt that Harmon’s benefit package was always competitive with others in our industry/space. What we were looking for was something that we could offer at no cost to our employees and make it really simple to access.”

Navigating Healthcare

Redirect Health was co-founded by David Berg, applying practices he used to remarkable effect in running Arrowhead Health Centers. “With Redirect Health, our employees have 24/7 access to a live person who can help them through whatever is going on. That is huge,” DiGianfilippo says. “Many times, our employees can call at night when they are not feeling well or having an issue, and they can get meds that night and then are back to work in 24 hours or less.”

And when Serendipit employees have had life happenings such as babies or surgeries, DiGianfilippo says, “Redirect has been able to not only get those employees the appointments they need with specialists right away instead of waiting months but also save significant money on medical bills by navigating that process for my employees.”

Traditional healthcare coverage had left Eli Hall, owner of AMS Landscaping, cynical about the healthcare industry.

“I feel like healthcare cost is just ridiculous (as most people do), but when you offer to pay cash, many hospitals or doctor offices will take much less money. Because of this, I feel that paying for a traditional health insurance policy is a waste of money and very confusing. There are deductibles and fees that, once you start paying on top of the high cost of health insurance premiums, I feel its unsustainable.” Deciding “the only way to reduce cost is to not play the game,” he says he would rather save his money to pay for things out of pocket as much as possible. “I utilize Redirect since they are great about looking for cost savings on my healthcare cost. Sometimes, they can do this before I have to utilize healthcare, or, if I go to the emergency room, I have added Sedera to my policy to cover the most costly items afterward, and Redirect helps us utilize the additional coverage to pay for the hospital visits.”

Sharing his experience, Robert “Cole” Johnson, president of Paul Johnson Drywall, says, “Using Redirect’s concierge services is very easy and provides for our employees and their families to get the care they need immediately. Whether they call to make an appointment for an issue they or their family member is dealing with, they can be seen on the same day, which provides peace of mind and as the employee misses far less work than under a traditional healthcare model.

“And, with their 24/7 service, issues are resolved far more efficiently than with traditional healthcare models because they are dealt with earlier. Because the concierge services coordinate appointments and provide costs upfront, we’ve been able to eliminate the in-network/out-of-network model, and employees determine what’s best for them.” Johnson adds, “Redirect Health is not only affordable, it’s easy to use and has a model based upon our employees being informed of their healthcare options and costs upfront. The Redirect program teaches our employees to be better consumers of their health and their healthcare services while providing unrestricted access to Redirect’s concierge services. Redirect Health is available 24/7 to our employees and their families.”

Ease of use is a key factor for Mike Arce, founder and CEO of marketing firm Loud Rumor. “Our advice to our employees — and myself — is always just, ‘Call the number’ when we’re not feeling right. We don’t know if they take care of it all the time, but more often than not they do. In those rare instances where they don’t take care of it, they’re really, really great at giving advice as to what to do next and how to take care of it. And in our case, we’re using Sedera — Redirect Health recommended it — and between Redirect and Sedera, they take care of everything.

“Previously, we had to do our own research and figure out what to do or where to go. Now, Redirect really acts as a consultant if they’re not able to take care of it, and makes sure that we’re recommended to the right spot, the right people, and also what we should pay for that. For example, Redirect does a great job of letting you know where to get your medication, where to get your X-rays, where to get anything done. Where you’d normally pay $1,500 for a sleep study that I had to pay for, it cost $750 going to a certain place versus another. Redirect did that shopping for me, which was great.” Continues Arce, “Redirect has streamlined the process of healthcare for our company. Many of our employees are tech savvy and enjoy communicating their needs through their app and helpline. This cuts out the difficult navigation of benefits administration.”

Healthcare as a Benefit to Business

“Providing health care through Redirect generates multi-faceted benefits for our employees and our business,” Johnson says. “By making healthcare available to every Paul Johnson Drywall employee — including our craft, crew leaders and administrative staff and their families, beginning on their first day of employment — we have realized drastic advancements in our recruitment and our retention efforts and are able to clearly and easily further differentiate ourselves from our competitors. We have really stood out to customers and employees in the drywall and construction industry because, traditionally, healthcare benefits have not been offered to craft or trade workers. Historically, this level of benefit was reserved for only management. We have executive level employees, office staff, journeymen and laborers from vastly different backgrounds with varying needs for dependent coverage. Redirect handles all of this seamlessly.

Specifically in terms of attracting and retaining employees, Johnson says, “Our employees, and the employees of our competitors, recognize and appreciate the value of Redirect Health. Redirect has helped to make PJD the employer of choice at two levels of influence: Our employees using the services are better employees; they are healthier and know they are being cared for by us, and as a result they are strongly committed to PJD. Because our employees’ spouses and their families are also able to participate in Redirect Health, they also positively influence our employees’ decisions to work for PJD. Redirect simply makes us more successful in hiring and retaining employees.”

Stanisic feels smaller companies are sometimes at a competitive disadvantage in offering healthcare benefits to employees. “Larger companies have so many advantages. While a larger base to spread the risk is obvious, simply trying to get time with a broker is difficult for us smaller guys. Who would a broker rather spend time with — a policy with 10 or with 500? Redirect is tremendous for me as they will write policies for the little guys and help to provide options we can afford.”

In terms of an overall compensation package, Arce says, “Healthcare is something that people are looking for; it’s a selling point; it’s something that their spouse will ask about when they accept a position; their parents will ask about; et cetera. So being able to say that this company does provide that and take care of them goes a long way when justifying the new position that you’ve just accepted. … And also, when considering leaving our company, it’s hard to leave our company for another company that doesn’t provide what we provide. So it’s an additional selling point not just to attract but also to retain.” Says Hall, “It has been a differentiator for us, but in the landscaping industry it is less expected. We offer Redirect to help with the daily stuff like doctor visits and chiropractic care.” Furthermore, he says, “We utilize Redirect for help with keeping our workers’ comp down by paying for issues out of pocket directly through our office for minor injuries so we don’t have to utilize the WC premium.”

Johnson notes that universal coverage for employees through Redirect has significantly reduced improper workman’s compensation insurance utilization for healthcare services, often being administered vis a vis urgent care or emergency room visits. “Having the appropriate coverage helps our employees actually become better informed about their health issues and the options that exist for them.” In fact, he says, “PJD is able to provide benefits and simultaneously save money by providing it. We have overlaid our healthcare and workers’ comp and we’re seeing a direct and very significant cost-savings on workers’ comp rates.” So significant, in fact, his company has realized an annual savings of approximately $3 million.

Cost and Administration

“Redirect has given us an advantage in cost-containment,” says Johnson. “Our employees have become better consumers of health services under Redirect Health’s system; they now weigh their options because they know costs and care options upfront. PJD also benefits when our employees make more informed, and therefore better, healthcare choices. In fact, PJD doesn’t have to use the common in-network/out-of-network model. Instead, Redirect negotiates rates for our employees upfront and then allows the employee to decide what’s best for them.” He notes, “Since Redirect keeps detailed records, monitors our employees’ care and so easily facilitates better care decisions, the financial burden on PJD is extremely minimal.”

Some businesses are covering the full cost of Redirect’s everyday care for their employees. Says DiGianfilippo, “Our offering of ‘Free Healthcare’ is very attractive to new talent. We do market that heavily in our job descriptions and during the interview process and it’s proven to be very effective.

”What’s key for Stanisic is the ability to cover a diverse workforce. “We have such a diverse workforce with completely different needs at each end of the spectrum. Redirect allows us to have a plan our employees can, and do, use! Without this affordable option, our employees would have no care at all. They have not ever enrolled in traditional healthcare plans.”

FOCUS: ADVANCED MEDICAL PRICING SOLUTIONS

The Pace of Pricing

Taking an alternative approach to healthcare cost containment is Advanced Medical Pricing Solutions, which works with self-funded entities to provide its healthcare cost containment services. Its approach is based on the strategy of negotiation.

The company is relatively new here, and CEO Kirk Fallbacher explains why the 15-year-old company chose Phoenix for its expansion. “When considering a West Coast presence, we wanted a location that would have a strong workforce and provide the ability to better serve our growing customer base across the nation. Greater Phoenix is home to a wealth of healthcare expertise, combined with a top rated university which is ideally suited toward AMPS expansion plans.” And he shares, “Within 12 months of establishing our Phoenix location, we are already seeking a larger office space to house local team members and serve our West Coast clients.”

Looking at healthcare pricing trends, Fallbacher expects healthcare prices to continue their inflationary pace for everyone that remains in the entrenched status quo of conventional health insurance plans. “There are really no checks and balances there to slow down, much less reverse, the cost trajectory,” he says. “Premiums, deductibles and co-insurance will all keep rising. … To put this into stark perspective, over the past five decades, pre-tax compensation has increased by over 60 percent, but actual take-home pay has increased less than 3 percent. And that can be attributed to what’s taken out of their check for healthcare insurance.”

This, Fallbacher believes, has led many employers to decide to bypass conventional health insurance altogether and directly pay their employees’ healthcare bills. “That has saved some on costs, but prices will continue to increase for everyone, in self-funded and conventional plans alike. The solution is to take several steps beyond simply bypassing insurance plans and paying directly for care. Self-funded employers also must negotiate pricing with the providers of that care.” This is one of the roles that AMPS takes — negotiating what it calls a “fair price for all” that strives to assure providers aren’t underpaid and patients aren’t overcharged.

Information as Cost-Cutting Power

Discussing negotiation as a cost-containment strategy, Fallbacher says, “At AMPS, we achieve a ‘fair price for all’ by utilizing our proprietary technology and pricing data to calculate prices both pre-care and post-care. Along with medical bill reviews by our own staff of board-certified physicians, we use this strategy to reduce medical claims on average 70 percent. And that includes high-dollar hospital bills.”

AMPS eschews a “one size fits all” approach to offer a portfolio of cost containment services and offerings to choose from. “We believe companies of all sizes can and should self-fund their employees’ healthcare. But we recognize that companies want choices in how they contain the costs of doing so — some employers are interested in repricing claims for procedures that have already taken place, especially high-dollar hospital claims; other employers want to have prices negotiated prior to care.”

Saying, “Striking the ‘Fair for All’ balance requires deep experience, including an ability to foster healthy local relationships between employers and healthcare providers,” Fallbacher notes that AMPS has been in business for 15 years and, over that time span, its physicians and pricing experts have reviewed and negotiated more than $1 billion’s worth of medical claims. “That’s more knowledge about healthcare pricing within a single company than resides anywhere else. It’s also the foundational basis for our ‘intelligent pricing’ engine or database. The data in it is constantly updated, refreshed and representative of every healthcare market in the country. It is our core tool for pricing what a healthcare service or procedure should fairly cost. Very often, that price can easily become half of what an employer was previously paying through their PPO network discounts.

“Providers respect our informed analysis. That’s why we rarely experience pushback. And it’s a two-way street. We are forging mutually beneficial relationships between providers and employers. Providers that work with us know they can expect reliable, timely, predictable reimbursement.”

AMPS’s program is also founded on member advocacy and education that, unlike conventional health insurance plans, results in fewer than 5 percent of members ever having a billing issue. “Employees in conventional health plans are very much on their own when it comes to finding the right providers and dealing with surprise out-of-network bills,” Fallbacher observes. “The health plan may have a 1-800 number to call and a (typically out-of-date) provider directory, but proactive outreach to plan members is rare. There isn’t a concerted effort at enrollment to really educate the member about the plan. Even self-funded employers may not have the resources to do this kind of education.” AMPS’s service provides “member advocates” to proactively communicate with members from the outset and an up-to-date Provider Finder tool with information about providers that are friendly to fair prices.

Also key are plan performance insights and visibility through on-demand data and dashboards. This kind of transparency is rare for employers because, Fallbacher explains, “If they cover their employees through conventional insurance, they never see a claim, so have no insight into the value of what they’re paying for. And even self-insured employers don’t have insights into how much they are saving compared to important benchmarks.”

Overall

While the debate rages over national healthcare policy, the business sector is demonstrating its power to innovate solutions that address one of the biggest challenges employers face in providing healthcare as an employee benefit.

 

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