Looking to cut costs? These strategies will bring immediate savings

July 30th, 2020

health savings

Most likely COVID-19 has interrupted your business operations and revenue cycle. In every industry, businesses are looking for ways to get their budgets down. Did you look at your healthcare spends? You have some strategies available that have become wildly interesting to our brokers and plan sponsors in the last few months.

Recently, we’ve helped many plans quickly realize savings by implementing some of these strategies.

Cost-containment strategies fall into two general categories: those that bring results over the long term and those that can help you realize immediate savings.

For those who are looking to see immediate savings, we are focused on three areas:

• Pharmacy solutions
• Quality and price transparency
• Reference-based pricing

They are going to cut your costs today. Here’s how.

Ditch your traditional pharmacy benefit manager

Consolidation among PBMs has led to a lack of price transparency. Essentially, they rake in the profits at your expense. This is why EBMS recommends a “cost-plus” pharmacy model, where you pay for medications at cost, plus a small administrative fee.

We can also help you set up a preferred network, push mail-order services for maintenance drugs, and put together a formulary designed for efficient spending.

Specialty pharmacy services can save you money right away. Specialty drugs are those that come with high cost, high complexity or high touch (require special handling). They can account for up to half of a plan’s total costs – so our solution ensures value for every dollar spent.

Steer members to high-value care with transparency solutions

When your members can see the quality rating of their providers and the price of health services, they make more informed choices. They save on out-of-pocket expenses and your plan saves too – especially on procedures like orthopedic surgeries where costs vary widely. A simple tool like Healthcare Bluebook can make a difference.

But for maximum savings, your plan should be structured to guide members toward high-value care and help them access the lowest-cost option that is appropriate for their condition. EBMS is an industry leader in this area.

Our miChoice concierge solution has demonstrated success at promoting positive utilization patterns and cutting the costs associated with inappropriate care. With miChoice, patient navigators do the research and put the options in front of plan members, with an emphasis on quality first, and then cost. Members make a choice based on data, rather than choosing the closest hospital or facility.

Implement reference-based pricing (RBP)

RBP is a cost-control strategy by which providers are paid a percentage of Medicare pricing, based on local market conditions. For example, a hospital may currently be billing you up to 400 percent of the negotiated Medicare price for a procedure. When you work with an RBP vendor, you bring that price down considerably. See our article in this newsletter for more in-depth information about RBP.

The bottom line? While negotiated contracts with a PPO might save you 40 percent on the most expensive claims, reference-based pricing can easily bring savings of 65 to 70 percent. RBP is the most aggressive strategy we have for lowering costs immediately, and this year it is trending exponentially in plan design. With those kinds of savings, it has gone from a fringe strategy to mainstream. Have you looked into what it would do for your plan?

For more information on RBP, see the article in our newsletter that talks about in more detail.

EBMS has been meeting with many of our brokers and plan sponsors since COVID-19 to get their health care spend down. If we haven’t met with you, let’s get started immediately and implement one of these strategies that will impact your money almost immediately.

Are you ready to make plan changes designed to bring immediate savings on claims? EBMS is ready to help. Contact your account manager to begin today.