Innovation Can Help Clients Tame Health Care Costs

An $11 bill issued by a hospital for a "mucus recovery system" (otherwise known as a box of tissues) is one example of health care costs that are out of control.

That was the word from Tim Callender, vice president of sales and marketing for The Phia Group. Callender gave some insight on why health care costs are increasing during this morning's sessions at the NAHU Annual Convention.

A lack of transparency on health care costs is one of the drivers behind high group insurance health rates, he said. In addition, some segments of health care costs that carry extremely high costs include air ambulance, implantable devices, dialysis and children's hospitals.

Callender called for group health insurance advisors to innovate to help manage costs for their employer clients. One way is by using subrogation, or recovery of third-party dollars when the employer plan paid out funds that they didn't have to.

One example is when the plan paid the medical expenses of a member who was injured in an auto accident when the member received a settlement from the auto insurer.

Callender also suggested using reference-based pricing - for example, deciding that a health plan will pay all out-of-network claims at 150 percent of Medicare reimbursement rates.

Another suggestion he made was to incentivize employees to find errors in their medical bills and reward them with a percentage of the savings.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com.

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