Value-based care reimbursement, health and wellness, and a decrease in duplicative testing could help payers reduce the rising rates of medical spending.
Health insurance companies are often looking for key methods and best practices to reduce rising healthcare costs. Payers could avoid the continual increase in medical spending by reducing the rates of unnecessary and duplicative services, adopt new models of healthcare delivery and payment, cut administrative costs, and stress disease prevention along with wellness.
When patients are responsible for their healthcare expenses, which often total significant sums, there is the chance that they will not be able to reimburse their providers, leaving revenue cycles in the red.
While there may be some incentive for healthcare organizations to adopt strategies to engage patients in out-of-pocket bill pay, few are currently doing so. According to the HFMA survey, only 20 percent of revenue cycle executives reported robust strategies to improve out-of-pocket bill pay.
The Robert Wood Johnson Foundation showed in a dataset how Silver Plan premium rates rose an average of 11.3 percent in 2016 while Gold Plan premiums jumped 13.8 percent and the Bronze Plan premiums landed in the middle at a 12.6 percent hike.
In recent years, there have been a wide number of reforms and new healthcare payment strategies adopted by payers and providers alike. However, the high influx of changes due to the Affordable Care Act and the HITECH Act are posing challenges to medical institutions unable to quickly transition to new models of healthcare delivery and payment.
With fee-for-service payments being a rather cemented method of reimbursement for many decades, it may take more time for providers and payers to successfully transition to value-based care reimbursement and reduce medical spending growth.
While some payers have been investing in high-deductible health plans and shifting more medical spending onto the consumer through cost sharing or higher out-of-pocket costs, Mary Richards, Executive Director at Partners for Better Care, described how this type of cost shifting along with a lack of price transparency could actually decrease patient satisfaction.
“I think one of the things that we think as important as Partners for Better Care is transparency of cost and information,” Richards told HealthPayerIntelligence.com. “We want people to have access to good information during enrollment periods and also throughout the year. Simply making sure that a fairly detailed level of information is available and essential prior to enrollment is a real necessity.”
“Partners for Better Care will be digging into ways to answer that question further. We are finalizing a patient charter to rally around and build an action agenda. I do expect payers can ensure patients have access to cost as well as value, which is a core function of what we’ll be advocating for,” Richards concluded.
Reduce duplicative healthcare services
Some more beneficial solutions that could reduce the growth in medical spending revolve around decreasing redundant healthcare services and adopting alternative payment and healthcare delivery models. A report from the American College of Physicians recommends for providers and payers to reduce unnecessary testing and technology use that has not shown improved patient care or outcomes.
Payers should take a look at any new technologies before adoption and analyze the costs versus benefits of the tools. For instance, automation technology could significantly improve efficiency among health insurance companies and would likely be beneficial despite implementation costs. Additionally, health plan benefits should be centered around evidence-based information that reflect better patient outcomes.
Implement value-based care
Value-based care reimbursement and alternative payment models such as bundled payments are also becoming vital among payers as they address the need to reduce high medical spending. Instead of fee-for-service, bundled payments enable payers to reimburse providers based on an episode of care instead of each, individual test or protocol.
Cut administrative costs
The American College of Physicians also recommends uniformity in the way health insurance claims are processed while keeping administrative burden low among their provider network. Adopting web-based communication channels for addressing benefit concerns will also help reduce administrative cost among payers.
Promote wellness and prevention
Another method that payers could use to reduce medical spending growth is to emphasize preventive care and wellness among their consumer base. For example, payers could send reminder cards to their members when it’s time for them to schedule an annual physical exam, mammogram, or other screening test.
Additionally, payers could reduce premium costs for members who have gym memberships. These steps could go a long way in promoting health and wellness, which could reduce the rates of healthcare use and medical spending.
If health insurance companies can successfully implement these strategies, they may decrease medical spending rates and the healthcare industry as a whole would benefit.
View this article on HealthPayerIntelligence.com here.