Solution to the Health Spending Crisis: Direct Contracts & Bundled Payments
Employers with self-funded health plans are currently facing a unique health spending crisis. Health care spending’s 20% increase in the last five years, according to the Health Care Cost Institute’s (HCCI) annual Health Care Cost and Utilization report, isn’t the only issue. The unusually competitive labor market is pressuring employers to offer generous benefits to attract top talent; surgical volume is gearing up for a significant increase due to the numerous deferred surgeries during the COVID-19 pandemic. These factors combine to create a storm of unreasonably high health spending.
Unfortunately, increased spending isn’t equating to efficient or higher-quality care, either. Planned surgeries now account for more than half of employers’ medical spend without any correlation to improved outcomes, not to mention the number of unnecessary procedures. A recent RAND study found that employers and private insurers paid an average of 247% of what Medicare would pay for the same services. These costs differed drastically between states.
Planned surgeries now account for more than half of employers' medical spend.
Bundled Pricing Saves Money and Improves Results
As employers face these difficult circumstances, there is hope for a better system that saves money and provides improved outcomes. Self-funded plans can take the direct contracting approach that offers bundled payments with Centers of Excellence (COE). The bundled payment model is proven to lower prices with fixed, transparent rates while demonstrating lower complication rates and more effective care.
Research has shown that bundled payments improve results and save money, vaporizing the effects of the health spending crisis for health plans. The same RAND study that discovered employers pay more than Medicare found that applying bundled payments to orthopedic and surgical procedures helped avoid 30% of unnecessary surgeries. There was an 80% reduction in readmissions and a savings of 45% per procedure for the necessary surgeries. Patients benefited as well, saving up to $2,400 while having access to quality health care providers.
There was an 80% reduction in readmissions and a savings of 45% per procedure for the necessary surgeries.
High Performance Providers Facilitates a Win-Win
High Performance Providers uses this bundled payment model to connect self-funded health plans with high-quality healthcare providers. We operate in the areas of orthopedics and sports medicine, knee and hip replacement, bariatric and surgical weight loss, spine/musculoskeletal, and general surgery.
Contact us if you are a health plan or involved in the purchasing of surgical services and wish to save 40-60%.
If you are a high-performing provider looking to direct contract with self-funded health plans, removing the transactional friction that comes with pre-authorizations, denials, and other administrative inefficiencies, schedule a meeting with us.
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