How Zero Tiering Fixes Hoosier Employer Health Plans

What would you say if I told you that your colonoscopy, for which your employer’s health plan just paid $8,000, would have cost $2,100 if done at a different facility, possibly with the same doctor? Gallbladder removal? You’re looking at about $22,000 vs. $9,000. Unfortunately, the fact of the matter is that almost every company in Indiana unknowingly makes this exact mistake over and over again throughout the year, costing them hundreds of thousands of dollars—if not millions. We need to not only pull back the curtain to expose a failed system, but also equip each of us with the tools to fight back.

Claims Comparisons

I have been a practicing anesthesiologist for the last 13 years, so I am very familiar with the ins and outs of hospitals, in particular the operating room, from a clinical perspective. However, it wasn’t until beginning my “second career” (though I am still a clinical anesthesiologist) that I began to understand how the backwards payment system has taken advantage of us in a way that benefits everyone but the American healthcare consumer. By performing analyses of employer health plan claims data, I have seen exactly how much the patient and the employer paid for every single healthcare claim during the previous year. Items listed range from a $0.25 prescription copay to a $100,000+ hospital bill. The most recent round of these analyses has left me especially frustrated, to the extent that I feel I have a duty to share what I’ve found. No longer should any patient or any company pay $49,000 for a breast reduction when the same service can be purchased for $15,000—with a more experienced surgeon and at a newer facility only 10 miles away. We need to have zero tolerance for that type of situation.

Employers pay consultants to advise them on their healthcare spend, but the lack of transparency does not easily allow for an apples-to-apples comparison. We are all too familiar with the multiple bills we receive from the hospital, anesthesiologist, surgeon, pathologist, radiologist, etc. To add to the confusion, each of these bills is further separated into different revenue codes and descriptions in the claims data files. Often, it is necessary to add 30+ line items together just to see how much was paid to a single facility for a single hernia repair. Compound that disaster with the fact that the analysis is being done by a non-clinical person who doesn’t know what line items were involved in the specific surgical event in the first place, and it’s easy to see why consultant analyses provided to the employer are rarely accurate. The most common mistake is only adding one of the facility charges or only one of the physician charges while leaving out the others, significantly underestimating the spend. However, almost as often, consultants leave out certain physician costs and/or facility costs entirely when comparing procedure prices. I have been doing these studies for over a year now, and I’ve yet to see another one done accurately by a broker, advisor, consultant, or TPA. Not one. For the sake of American healthcare, people need to know this.

The examples are endless, but each study ends in a similar fashion: about $8,000 savings per procedure, if you choose the right surgeon and site of service—50% savings on average. The billion-dollar questions are, “How do you find that surgeon and/or site of service?” and “Even if you are able to identify the surgical options that bring greater value, how do you ensure patients make those choices?” Those questions have not yet been fully answered, as that would require a fully transparent free-market surgery environment that doesn’t currently exist in the United States.

However, WellBridge Surgical, an ambulatory surgical center in Indianapolis, has chosen to lead the way by posting all-inclusive prices online for all to see, as well as offering an average of 50% savings to both individual patients and self-funded employers. While we aren’t the only ones who can offer savings on surgical spend, we are the only ambulatory surgery center in Indiana whose business model is structured around adding value to Hoosier employer health plans by being fully transparent. In many senses, we have answered the questions posed above, and now we are telling employers.

Zero Tier

Within the current American healthcare payment system, the only answer to those questions is to “zero tier” these sites of service and the surgeons who offer the increased value. This means waiving the patient cost in the transaction (if the patient chooses the identified high quality/lower cost option), creating a win-win scenario for the patient and employer. Historically, the problem has been that we are conditioned to be apathetic toward our surgical care choices. Do terms like “deductible,” “coinsurance,” and “max out-of-pocket” ring a bell? We know that we have to pay our required amount, but it’s no skin off our nose if it costs our employer another $50K! It’s the perfect scenario for a system where everyone complains about the high costs, but no one truly cares. When you take the patient cost out of the equation in the appropriate circumstances (or sites of service), you successfully move the needle in the quest to create a free-market healthcare system where quality rises to the top.

This is where employers are beginning to make a difference. For a few years now, companies have identified the problem but are left without a solution. How do they identify these high value options? And even if they did, how do they ensure their employees made the right choice? WellBridge Surgical provides an answer. Since January 2023, dozens of Indiana employers have made the conscious decision to waive all member cost share (zero tier), if the member chooses to have their outpatient surgery at WellBridge Surgical’s center. That means that the patient’s deductible is ZERO if they choose to go to WellBridge’s surgery center for their procedure. The patient has the choice to go somewhere else, but the deductible would apply in that instance.

After six months of data for these companies who have chosen to zero tier WellBridge Surgical into their health plan, employer ROI (return on investment) has ranged from 240% to 450%. That means for every extra deductible dollar that the employer is covering, that employer is seeing a substantial return that equates to hundreds of thousands of dollars in yearly savings. Additionally, the employer offers a richer benefit for their employee by way of zero deductible, as well as concierge ambulatory surgical services. It has become the elusive win-win scenario.

Let’s review some cost-breakdown examples using surgical procedures mentioned earlier. We will assume a $1,500 deductible, 20% coinsurance, and $3,000 max out-of-pocket. The table below shows what net savings an employer realizes when they incentivize their employee (by way of covering all patient cost) to have their procedure at WellBridge Surgical. In essence, this is what zero tiering is all about.

Quality

Given the above data regarding zero tiering WellBridge Surgical, there is a natural tendency to think this scenario is too good to be true. You may ask, “What’s the catch?” The short answer is that there is no catch. The surgeons, clinical staff, and anesthesiologists are all well-trained veterans of the major hospital systems around central Indiana who have all been hand selected by the physician co-founders. The surgeons credentialed to perform procedures at WBS also operate at all the major hospitals around Indianapolis. The center’s facilities, equipment, policies, procedures, and processes have all been vetted by the gold standard in ambulatory surgery accreditation, the Accreditation Association for Ambulatory Health Care (AAAHC).

When forming their team, our co-founders relied on clinical experience, specifically from the OR anesthesiologist perspective, to select team members. To offer an analogy: If you are looking for a good recommendation on a trial lawyer, would you rather take the opinion of a judge that has seen tens of thousands of cases tried, or would you rather go with a suggestion from a billboard or a court-appointed attorney?  Patients are often referred by their primary care provider to a specialist who is in the same system, and then are taken to an operating room owned by that system. It’s all kept “in-house.” WellBridge Surgical, on the other hand, is paving the way for free-market medicine here in Indiana by relying heavily on quality health care, positive outcomes, and superior experience. Each patient fills out a survey after their care is complete, and the feedback has been overwhelmingly encouraging. In contrast to the hospitals and networks, we do not own our patients, we earn them.

Look “under the hood”

While dozens of Indiana employers have incorporated WellBridge Surgical into their plan already, the 2024 plan year offers a significant opportunity for additional forward-thinking companies to join the cause. Benefit advisors can be a good resource to evaluate a plan and project how zero tiering would look for a specific employer. The advisor can work with the TPA to provide the claims data that they can then submit to WellBridge for an individualized employer claims analysis, which will highlight areas of opportunity to incentivize member migration to high-value surgical options. Undoubtedly, there are instances in each employer’s claims that are similar to the examples illustrated above. Keep in mind that not all benefit advisors are paid the same, with some being paid on a percentage-of-claims basis, or even literally being paid by the networks to guide employer plans toward those networks. If your broker, TPA, or advisor hesitates to submit your past claims for an independent analysis, you need to ask “Why?” You may not like the answer.

The information here should both pique your interest and anger you at the same time. This is happening within your company right now. It’s happening in Indiana every day. To understand that is the first step. The next step is to decide what you want to do about it. No longer do we have an excuse to sit back and be passive consumers of healthcare. It is time to take the reins or stop complaining. If a company is not willing to explore zero tiering to both enrich their benefit offerings and boost their bottom line, then that company is now part of the problem.