Until recently, employers had to navigate through numerous insurance plans to find one that would cover their employees and work within the company budget. A critical issue with this method is that each procedure or visit was billed separately, resulting in a catastrophic bill. The fear is that employees would not deem the coverage valuable because they are still required to pay out of pocket, even after the employer paid the initial cost of the procedures.
If this sounds familiar, then we have good news for you: bundled care promises to fix these problems.
So, What Is Bundle Care After All?
The bundle care system looks at healthcare in a whole different way. It creates packages with all the procedures necessary to treat a particular episode step-by-step, from diagnostic to unexpected complications, and aftercare. All at a set price that is lower than the traditionally fragmented process.
The bundle system requires all parties involved in the health plan to work closely together. Insurance companies, employers, hospitals, and doctors must collaborate to deliver higher-quality services, better outcomes, and lower costs, all while creating a smoother and friendlier patient journey.
Bundling works best on illnesses that need standard procedures, such as joint replacement, pneumonia, or coronary surgeries.
Because they are frequent, these procedures give providers plenty of opportunities to learn what works and what doesn’t, to make the necessary adjustments in the bundle definition.
Currently, bundled payments are constrained to a finite number of episodes of care, but with constant experiments and innovations, more will be added in the future. There’s also very likely for them to expand to both inpatient and outpatient care.
Employers Are Still Wary of Bundling
Costs with healthcare insurance are perpetually increasing, with 88% of businesses reporting it as a top concern.
In fact, in the last four years, it registered a steady growth rate. The average premium for family coverage employers had to pay in 2016 was $18,142. That’s a high price that companies seek to lower, along with decreasing the absenteeism rate from workers needing treatment and improving outcomes. At the moment, bundled care seems to be one of the best solutions to do that.
Despite this endeavor of cost-reduction, according to one survey by PwC from 2016’s Strategy & Annual Bundle, only 31% of hospitals and 20% of employers adhered to a form of bundled program.
More companies would be willing to adopt the bundled model if there were reports that it could help them save over 6% on medical costs. However, providers fail in delivering reports that highlight this benefit and others.
A wider variety of bundles would be of more interest, especially for defined “high cost” episodes of care. Despite that, hospitals offer a restrictive list with a focus on acute conditions, but there are promises for the future.
This mismatch between provider activity and employers’ needs influence companies to stay put and assess results of pilot programs first, before diving in head first.
How Bundled Care Can Benefit Employers
Employers now have an alternative to traditional healthcare insurance plans by having access to fixed cost episodic case rates through bundled payments. By creating a direct connection to providers, organizations can now offer employees value-oriented healthcare services in the form of flat-rates that will also reduce the company’s overall insurance premium cost.
On the long-term, a bundled system promises to improve medical cost-efficiency by 10-20%. Short-term, a company will have immediate cost savings on their employee’s coverage. These immense savings are then passed down to the employee where they will see their deductible waived.
Employers that begin incorporating this type of free market health savings program should expect the see these distinct benefits:
- A shoppable marketplace where employees shop for healthcare services
- An increase in value-based choices by employees
- A potential to generate measurable business savings
Unfortunately, there’s not enough information about bundle care to stir employers into adopting this payment model. Access HealthNet hopes to change that. As a company dedicated to making the healthcare market more transparent, Access HealthNet can give you the tools and flexibility you need to develop and administer bundle plans to enjoy the full benefits this solution can provide.