How much would you guess it costs to spend a day in the hospital? The average cost in March 2021 was between $1,606 to $3,726. If you or a loved one must stay for days or weeks, the cost is astronomical.
In fact, 60 of 65 percent of bankruptcy stem from overwhelming medical expenses. There are approaches employers can take to battle high hospital prices. Keep reading to learn how to reduce healthcare costs.
The Centers for Medicare & Medicaid Services (CMS), HHS Rule
The CMS and Health and Human Services (HHS) final rule took effect on January 1, 2021. The rule requires U.S. hospitals to publish a list of their standard charges. This includes all charges for items and services.
The purpose of this rule is to promote price transparency in healthcare. Employers, patients, providers, and third parties now have data for making decisions. This can also increase market competition with the goal of reducing prices.
Fighting High Hospital Prices
JP Morgan, Berkshire Hathaway, and State agencies blame hospital prices for high benefit expenses. Many individuals call for forced price reduction in the hospital sector. Hospitals and large multi-specialty clinics currently have no incentive to lower prices.
As long as they’re getting paid, they will continue to practice business as usual. Yet, local employers can work more efficiently to lower costs with skilled guidance.
Strategies to Reduce Healthcare Costs
Employers must first understand what they’re paying for hospital benefits. Business negotiations begin with gaining an understanding of the other party’s position.
A state employee health plan survey ranked hospital costs as the biggest expense. In many situations, employers face little or no competition among providers. The hospitals have high political clout and employees want a broad provider network.
Yet, most plans had few policies to address this issue. The following discusses some ways employers can control healthcare benefit expenses.
Risk-Sharing Payment Models
One option involves employers partnering with clinical providers for mutual benefits. The risk-sharing payment model balances the financial responsibility between facilities and providers. The goal is higher-level, more efficient care.
The providers/facilities receive a fee per patient. This incentivizes the clinical partners to treat patients within this budget. Some contracts include extra bonuses for high-quality performance.
The hospital is expected to offer cost-efficient devices and supplies to its clinicians. Expenses that exceed the budget are the responsibility of the hospital or provider. The goal is hospital cost reduction which benefits employers and their employees.
Another approach is direct negotiation with community providers. Employers may seek contracts that offer price transparency and lower costs. This removes third-party entities which often create barriers to improved managed care.
With this approach, employers don’t pay premiums to health insurance companies. Instead, they work directly with the facilities. These providers become the preferred point of service for their employees’ healthcare needs.
The Better Source Benefits App
Most individuals have difficulty navigating their health insurance plans and benefits. The Benefits App offers a user-friendly dashboard to help employees find answers.
They have access to specific plan information, ID cards, and prices for prescriptions. Users can also connect with a healthcare provider.
Are You Looking for Solutions to Reduce Healthcare Cost?
Employers must navigate overhead costs to optimize their return on investment. One common expense involves high hospital prices. Better Source Benefits offers advice about how to optimize your health benefit costs.
Our experts guide you in finding new approaches and decision-making for increased efficiency. We’ll stand with you to ensure success in reducing healthcare costs.
Schedule a free consultation today to see how we can reduce your costs.