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United Healthcare’s new variable co-pay product
EP #69 Flatlining Podcast Recap
On this week’s podcast Matthew and Ron discuss a new product from UnitedHealthcare (UHC) that removes the percentage aspect of co-insurance deductibles and introduces some consumer-driven elements for UHC members. It’s called “Surest”, and Ron and Matthew give a good first look and give providers some tips for positioning themselves to succeed in this kind of marketplace.
Ron provides a primer on how Surest is different, explaining that one feature of the plan is that it doesn’t have co-insurance deductibles. Co-insurance deductibles are where a percentage of the final bill is what the patient is responsible for and that can be anxiety-inducing when the patient doesn’t know the end cost, or in some cases, it can be a driver for medical debt.
Ron explains that the main two features of Surest, is it only has co-pays, a fixed dollar amount to pay for a procedure. The other feature is that the co-pays are variable by procedure and who you go to see for that procedure. Ron said, “It’s designed to have this consumerism in it, either by app or website”. For example, if you need knee surgery or your child needs a tonsillectomy, you can shop around. Ron thinks that what the payer is doing is trying to translate the fee schedule to the actual cost of a given provider down to a real dollar amount the patient can see prior to having the service.
There is third feature, as an option, is that the patient can turn on a benefit for something that is expensive and elective, like knee surgery. Once you know you need a procedure, you contact the plan and turn on that coverage. Ron explained the reason why UHC offers this option, it forces the consumer to shop for options when selecting a provider for the service the patient wants.
Matthew provides a visual comparison to other apps that consumers are using on a regular basis and points out that if a patient doesn’t have a relationship with a particular doctor, it provides an easy way to shop around. Does this mean everyone will go to the cheapest provider? Not necessarily and Ron explains that here is where the discussion on quality becomes important.
So how do you express “quality” and how does the patient understand “quality”? Ron is very matter-of-fact in his response. After years in healthcare, he tells us that not every doctor is the same or any particular surgeon as good as another, just like the differences in any other profession. The challenge he said is how does the patient know the difference between doctors? What will set one provider apart from another? Ron explains, and many providers know this, there are real measures that set some practices apart. Ron said the challenge for providers is to avoid “Becoming a commodity and being able to express your real quality or value difference.”
Surest will only be offered to employers with over 51 employees and there are some advantages for employers. Ron said it could drive patients to lower-cost options which saves the employer money. The other way employers may save money is that it can lower the overall cost of renewal by just changing the co-pays. If an employer can’t afford a rate increase by the payer, the payer can just offer to change the co-pay rates. Ron points out that obviously this is not great for the patient, but it is a reality of what could happen. Ron thinks the payers are offering this product because it will be cheaper for employers.
Surest is ACA compliant and has all the minimum care requirements, but this plan and its variable co-pays are focused on the procedures that as Ron says, “Where the extra money is for healthcare or where the savings are.” He explained that where you have your screenings won’t move the needle much regarding cost savings, but where you have your baby or knee replacement would.
Ron believes the network of providers will remain the same, but the difference comes in the form of the co-pay and comparison between a patient’s options. It is likely to come down to why should a patient go to one provider over another when there is a large price difference. Ron explained that the payer may come to you as an expensive provider, one that has a high co-pay, and ask you to reduce your reimbursement rates and this will reduce the co-pay to their network members, and you will be in line with other providers. This, Ron said, will be an interesting dynamic from the carrier perspective.
Matthew asks Ron how providers can set themselves apart and tell their stories on their quality of care. Ron says the providers for the most part have not done a great job expressing their quality differential. He explained that most likely because they have focused on the delivery of care. He describes the difference between actual quality and perceived quality and how providers can explain the advantage of coming to them versus their competitor for a procedure. The big challenge for providers Ron says will be “How they express, educate and market” real quality differences. Ron suggests that you know who you are as a practice, so be that. He compares Walmart to Nordstrom, the difference between selling service or price. Are you going compete on quality or price, and then you need to express that, and ensure that your whole patient experience can live up to the image you project. For example, if you are more expensive in your market, being sure the office furniture reflects something of quality.
Matthew wraps up by asking Ron what providers should be on the lookout for, and Ron says that don’t think UHC will be the only one coming out with a product like this and that other carriers are likely to come out with their own version of Surest in the not to distant future.