EP506: How Other Employers, Shareholders, and Clinics Are Using Price Transparency Data—And It's an Arms Race, With Jerry DiMaso Podcast By cover art

EP506: How Other Employers, Shareholders, and Clinics Are Using Price Transparency Data—And It's an Arms Race, With Jerry DiMaso

EP506: How Other Employers, Shareholders, and Clinics Are Using Price Transparency Data—And It's an Arms Race, With Jerry DiMaso

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So, we have a few miniseries afoot here on Relentless Health Value right now, and one of them is "The Inches That Are All Around Us"—finding the hidden fees, the hidden friction for plans and members and clinics themselves a lot of times in those inches. For a full transcript of this episode, click here. If you enjoy this podcast, be sure to subscribe to the free weekly newsletter to be a member of the Relentless Tribe. So, how does transparent pricing data fit in here? Well, you can use it to find inches. They are all around us. You can see it in this data. So, we talk about self-insured employers, plan sponsors, and their perspective on this price transparency data first in the conversation that follows. And then we get into the perspective of the provider organization or the clinic. Let's take this from the top. Plan sponsors such as self-insured employers or unions can gain three very interesting and maybe underappreciated insights from this price transparency data. Not limited, of course, to these three insights, but these were the three that Jerry DiMaso talked about; and I lasered in on them with very single-minded ambition. Okay … so, here's the three insights of interest to plan sponsors. (1) Benchmarking against a plan sponsor's competitors. We often forget about this, that every self-insured employer is actually a company trying to sell something, probably with competitors. You can search for your own plan or a competitor's plan using an EIN to compare rates, specific carve-outs, and identify if there are other companies in the same industry that are receiving better pricing. Considering that paying for health benefits is often the second-biggest line item on many corporate balance sheets, I wonder how long it's going to take for some activist shareholder group to figure out that they can find evidence of avoidable overspending. Especially because of our number two insight here, which is (2) you can use this data to identify high-cost codes. Plan sponsors can pinpoint specific billing codes where they are paying way too much. And right now (maybe you are, too) but I am thinking about the examples of infusions given in the recent episode with Ivana Krajcinovic, PhD (EP501) and that Brian Cotter talks about all the time. Also Nate Walker. Plans paying a million dollars too much for some infusion. That would be a crazy thing for a corporate shareholder to figure out and bring up at some, I don't know, shareholder meeting or earnings call, right? (3) Exposing the, I'm gonna call it, "discount shell game." This data allows plan sponsors to see through stuff like gross aggregated discounts. They can verify if a TPA's, I don't know, 90% discount is actually real savings. Okay … so, what does one then do with these insights once found? Jerry DiMaso, again, my guest today in the conversation that follows, talks through these at some length; but here's the very top line. First thing a plan sponsor can do is use this information to direct TPA negotiations. Plan sponsors can get their TPA to go back to providers and negotiate better rates. I did not know that. Number two thing that a plan sponsor can do with this information: Implement service carve-outs and direct contracts. Employers can identify expensive outliers and then steer and tier and maybe direct contract with specialized providers or Centers of Excellence as a result of that knowledge. As a second bit to this, not to be underestimated, this data allows for objective calculation of savings a lot of times from, you know, direct contracts or other initiatives so that plan sponsors don't have to rely on vendors to grade their own homework, as they say. Plan sponsors can start to do their own math. And here's the last thing that we discuss in the episode that follows that a plan sponsor can do with this price data: Model alternative plan types. Right? You can analyze whether switching from a PPO to an HMO or some other alternative model would save money while actually maintaining access to the same providers that employees are already using. Okay … so, now and in the conversation that follows, at this moment, we pivot to clinical organizations and how they can use this information. And by the way, although what we talk about next is of great interest to clinical organizations, lots of this is also still relevant to self-insured employers because, right, any ultimate purchaser does not want the independent practices to go outta business. So, helping them make sure that they can stay in business is in everyone's best interest. I talk about this coming up with Patrick Nelli from Aligned Marketplace, and I talked about it with Dan Greenleaf from Duly in an episode. Indie practices are just cheaper than consolidated health systems. If they go out of business, now all of the volume goes to consolidated health systems who now well and truly have a monopoly and all the glorious, unchecked pricing opportunities that go along with that. Anyway. ...
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