An Employer Gets It Right
Sarah Gardner wants her company’s employees to be savvy medical shoppers.
So this year, she rolled out a plan that sets limits on how much the company will pay toward a range of tests and procedures, from MRIs to hysterectomies. Workers at Buffalo-based Prodigy Health now know to call their employee insurance plan to find a list of local doctors and facilities that meet the price. Or they can choose to go to a higher-price center elsewhere in the insurer’s network and pay the difference themselves….
Working with the Blue Book information, Prodigy eventually settled on nine broad categories of tests or procedures that would fall under the new program. Included are imaging services, such as computed tomography (CT scans), sleep apnea tests and some non-emergency surgeries, including arthroscopic knee procedures. What Prodigy pays for each service varies based on local costs in the cities where its 1,200 covered employees live, including Buffalo; Minneapolis; Columbus, Ohio; Evansville, Ind.; and Okemos, Mich.
The rate is set at about the median (half were higher and half were lower) that Prodigy had paid in the past for the services, says Gardner. About 90% so far have chosen to go to medical providers who meet the price limits, she says. The rest go to higher-price centers and pay the difference themselves.
Full Julie Appleby story worth reading.
When median costs were selected were outcomes even considered?
Interesting. It’s the NCPA approeach. But it needs a Health Savings Account, so people can afford to make their own choices.
Healthmarkets has a similar plan design. I don’t know why all employers and insurers don’t do something like this.
Very interesting concept.
This is a strange story, because the profiled employer is Prodigy, a health-benefits firm that has self-insured fims as clients. Why aren’t any of Prodigy’s clients discussed? It’s kind of like a story about an employer who is helping its employees maintain their cars on a regular schedule, and then learning that the employer is Jiffy Lube!
On the other hand, it’s interesting how when the employer does it, it’s described with a positive connotation. When an insurer does something similar, by shrinking its PPO network, it has a negative connotation. I believe that this is because when you go out of network in a PPO, you never know how much you’ll pay because the transaction prices are not transparent. In the Prodigy case, they are.
Good for her! This is what it has to come to!