Boston Business Journal features PRA op-ed on how employers can demand healthcare price transparency.
Most Americans receive healthcare benefits though their employer as the cost of healthcare continues to skyrocket. In an op-ed published by the Boston Business Journal, Cynthia Fisher, PRA founder and chairmen, explains how employers can take an active role in demanding healthcare price transparency.
Fisher explains in her op-ed:
“A recent study published in the Independent Review that I coauthored with economists Art Laffer and Larry Van Horn explains how innovative employers are putting runaway healthcare costs in reverse by treating them like any other aspect of their supply chain. New federal health insurance and hospital price transparency rules will make it easier for many more employers nationwide to follow suit.
Employers provide most Americans with health insurance, meaning they have the market power needed to lower sky-high healthcare costs. Yet for too long, employers have delegated health plan management to the human resources department, which has allowed insurance-affiliated third-party administrators to design plans rife with kickbacks, opacity and countless inflationary middle players. As a result, employers and employees are typically blinded to healthcare prices then blindsided by massive bills they often never would have agreed to had they known prices upfront.
This distorted and opaque healthcare market has led to ballooning care and coverage costs that have grown by more than twice the inflation rate each year over the past couple of decades. Research by Johns Hopkins University finds that American hospitals charge, on average, seven times their cost of care. And the average annual employer-sponsored family health insurance premium is $22,221, not including deductibles and copays. This healthcare system facilitates $6,600 stitches, $101,000 back surgeries and $550,000 neonatal ICU treatments.
As a result of these outrageous prices, 64% of Americans delay care for fear of financial ruin, and 100 million Americans have medical debt. The U.S. spends 20% of its GDP on healthcare, approximately twice the developed-world average. And workers' wages are suppressed as increasing coverage costs are funded through compensation that otherwise would have gone to pay increases.
Our study identifies employers such as Rosen Hotels in Florida and Employee Solutions in Dallas who are bucking this failing status quo. They are saving 30% to 50% on their healthcare costs by taking control of their healthcare expenses and steering their employees to providers that cut out middlemen to offer care at transparent, fair market prices that are a fraction of what major hospitals charge. For instance, Oklahoma Surgery Center offers a knee replacement for $18,000 that costs $62,000 at a hospital in nearby Dallas.
We identify a roadmap that employers can follow to enjoy similar savings. Major steps include 1) analyzing pricing and claims data to avoid price gouging providers and identify those that offer the best care at the best prices; 2) partnering directly with price transparent providers, including hospitals, centers of excellence, and surgery, lab, and imaging centers; and 3) emphasizing primary and preventative care, including telemedicine, to identify conditions early before they become more expensive to treat.”
Read the full op-ed in the Boston Business Journal