In a self-funded healthcare plan, knowing just what you’re paying for and how much you and your employer are paying is critical. Too often, employees and employers both are unclear about the costs incurred by a plan and end up paying far more than expected. This can be avoided with a transparent pricing model in a plan.
Transparent pricing in healthcare and health insurance is the ability to see 100 percent how much is being invested by everyone involved, from the member to the employer group. Additionally, transparent pricing means seeing exactly what percentage of everything paid within the plan is actually put towards healthcare claims and how any remaining funds are used.
The Problem with Lack of Transparency in Healthcare Pricing
Unfortunately, the overall effect of lack of transparency in health insurance is highly under-recognized by both members and employers. While traditional plans may have worked in the past for employers and employees, bureaucracy and lack of transparency, along with more specific needs from companies, often places companies at a disadvantage financially.
The misunderstood costs and how funds are allocated can drive up the costs of both providing insurance as an employer and paying for health insurance as a member. Sometimes in a traditional, carrier-based PPO plan, members and employers have no idea exactly where the money being spent is going or even how much a care provider may be charging for services compared to out-of-network providers. Both the employer and member should be able to follow every dollar allocated towards their benefits.
How Transparency Is Perceived by the Industry vs the Employer
Normally, when an employer brings in an insurance broker to examine similar plans and strategies, they are looking to either improve the services they offer or how much they pay. The broker may offer a spreadsheet that gives some information. The employer must ask very specific, targeted questions in order to fully evaluate and understand:
- Projected costs for both employer and members
- How much real claims cost
- What each participating service vendor will charge
With more detailed, up-front information, a client can see things like what a claim costs versus the industry standard, what current providers charge and how much is paid by a program, and more. With such a comprehensive overview of pricing models, an employer can often improve benefits offerings substantially while drastically lowering costs.
What Can Be Achieved with Full Transparency
When members have access to full transparency, they become more conscious consumers of their healthcare and how to get the most from their health insurance. For example, when a member realizes that an MRI can be performed by different providers who use the exact same imaging technology but charge drastically different prices, they can make an informed decision about where they go. The ability to make these choices impacts the member’s direct cost, but also the costs to their employer. In turn, employee contributions can even be reduced over the long term.
Healthcare transparency also helps employers determine what aspects of their programs are working efficiently and what aspects need to be improved. What most employer groups don’t immediately recognize is they often make benefit decisions based on emotion and not statistical data that can be much more telling. The usual plan of action is to adjust benefit plans based on standard complaints. However, employee and employer surveys, actual claims data, and transparent cost models are far more reliable. With this kind of information, a company becomes more competitive in the job market. Benefits are better, and employees are easier to attract and retain.
Find Transparent Pricing Through ClearChain Health
At ClearChain Health, we believe all levels and aspects of health care should be completely transparent. Members get to pick and choose providers without limitations and wholly understand their costs. Employers and employer groups better understand what their contributions cover and what their costs will be over the long term. Ready to learn more? Reach out to us at ClearChain Health for more information.