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Costs of Many Preventive Services Vary Widely: What Employers Can Do

Kelly Kennedy's April 6, 2012 article in USA Today sheds light on the significant variance in the costs of preventive services, now required to be covered by insurance at 100%, not subject to co-pays or deductibles.

"Over the past year, health plans and self-insured employers began paying for wellness exams — diabetes screening, mammographies, Pap smears and colonoscopies — as required by the law, without charging consumers a deductible or co-payment. But in looking at 15,000 consumers, a research group has found cost differences of hundreds of dollars charged for the same tests. Colonoscopy costs, for example, ranged from $786 to $1,819........

The U.S. Department of Health and Human Services predicted a 1.5% increase in premiums because of the new exam requirements. Doug Ghertner, Change Healthcare president, says consumers will see a direct correlation between premium increases and their choice of health provider. The "consumer is typically isolated from the cost," he says. "People think they have zero financial responsibility.".......

As demand increases, prices may continue to rise, Ghertner (President, Change Healthcare) says. "Companies are saying, 'How am I going to deal with these increases?' " he says. They need to make the cost information available and provide an incentive for employees to seek less-costly care for equal- or better-quality services, he says."

Read the full article.

So what should employers do?

Take a look at your negotiated fee arrangements and evaluate your vulnerability. Even within a PPO network that includes negotiated fee schedules, there can be significant differences in the cost of preventive services, depending on whether or not they are provided in a hospital, physician office, or freestanding center. Get familiar with the fee differences that exist within your network. Don't just focus on your "discount" but on the actual fees you will be paying, Discounts alone will not give you a picture of your true cost. if possible, also get familiar with where your employees and their families are going for these services so you understand how your plan is current working.

Review your plan design. You now cover these services at 100%, so the traditional use of deductibles, co-pays, and co-insurance as means to get employees to consider cost in their selection of provider are no longer in play. Do you have any incentives in your plan for employees to select cost-effective providers for preventive services? With no financial exposure for employees, it is now time to think about incentives as a way to get employees to focus on cost.

Consider providing your employees tools to help them know what the cost is for preventive services in their area. This information is essential if you decide to provide incentives for selecting cost-effective providers.

Posted by Cristie Travis at 6:16 AM

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