I have had the pleasure of traveling to many places in my career, but this was my first time in the UK, and I must admit that it was a truly wonderful experience; the people, the landscape, and the food (best Indian ever!) were all marvelous. That said, with the British pound being worth over double my meager Canadian dollar, I was hemorrhaging cash, but it was worth it.
The “real” or “grown-up” purpose of my trip was to speak on a panel at the International Travel Insurance Conference (or ITIC as most call it) to discuss US cost-containment. As I have mentioned in other posts, US healthcare costs are ridiculously expensive, which has certainly caught the attention of travel insurers everywhere, including the Brits. In fact the title of the panel was “US Healthcare Prices: the only way is up.” Specifically, I was asked to address the best and worst cost-containment practices that I see today in the travel insurance community. BTW, this post is definitely for travel insurers and their assistance companies, so if you are not in this industry, you may want to pass on this post.
To spice up the session (because let’s face it, insurance conferences can be boring!) I decided to invent fictitious twitter hashtags referencing US cost-containment topics – #coolidea, right? I also decided to splice in some typical British slang for a little extra kick. Here’s (at a very high level) what we covered. This content does not purport on any level to offer legal advice or guidance on claim coverage in any situation.
#ItsNotAllHunkyDory: The first mistake I see is that travel insurers sometimes take a laissez faire attitude towards US healthcare charges. International payers and patients are squarely in the target zone of US healthcare providers who want to extract as much revenue as possible. You are effectively being hunted.
#BrilliantCaseManagement: I highlighted that strong case management can save the patient from harmful overtreatment which in itself also costs the payer a lot of money. This practice exposes the patient to all the risks and side effects of the procedure without any of the benefits. Every year, thousands of people are needlessly irradiated for scans or MRIs that simply are not warranted. Some studies have suggested that 29,000 people die every year in the US from cancers acquired from needless diagnostic radiation.
#WaitingforBillsIsRubbish: I deal with providers on a daily basis, and in my experience they want to hear from payers as soon as possible to discuss the payment of their claim. That is why providers call payers before and during admission – they don’t see a conflict, and neither should you. During the admission process or concurrent to the care being rendered to the patient, providers profile their payers and will look to lock in a number for their reimbursement. After the care is rendered, it is the job of the accounts receivable department to collect this amount; if you want to pay less, someone at the hospital has to override the system, note the change, and get a sign-off for what is ultimately less money than they felt they were going to get in the first place (and also less than what they put into their budget). Let me tell you, in an environment where job performance is based on maximizing reimbursement, provider representatives are not exactly looking to put their names all over the system approving lower discounts. This discussion is best done upfront; plain and simple.
#DodgyPPOAccess? Travel insurers and assistance companies are always asking me if they are allowed to access various PPO agreements for their members. My answer is to request a copy of the contract that you are accessing. If you’re worried about legalities, compare the contractual terms with what is actually happening at a procedural level. You do not want nasty surprises down the road.
#ConflictCockUp: I explained briefly that travel insurers and their assistance companies need to know that there are potential conflicts of interest when discounts are in play. A vendor may be in a relationship with a PPO or provider that they must maintain for their overall “book of business.” However, you may have an egregious claim that needs to be addressed with the provider for additional consideration – will the PPO stand up for your needs? Will your vendor? No one cares more about your claim than you – and you would be well served to remember that.
#DiscountDampSquib: Are discounts a reliable means of evaluating a cost-containment vendor? On the aggregate, it’s not the best way, but it’s not a terrible approach either (exposure across popular travel destinations is relatively homogenous). Plus, savings is the basis as to how you are paying your vendors, isn’t it? However, on a per claim basis, savings off of billed charges can be extremely misleading – it’s better to focus on a valid payment benchmark. On a year-to-year basis, your risk may be affected by the management of a few large claims – my advice is to make sure your interests and those of your members are being served. This can be done by reviewing high-dollar claims and demanding detailed case management activity reports on shock claims with rigorous explanations on what you paid relative to provider costs, average commercial reimbursement, the Medicare rate, etc. Make sure your contract allows you to do this.
#DontBeASkiver: This was a dig at those who would just churn their claims through a PPO as the only means of cost-containment. If this is all you or your vendor is doing… you are likely being taken for a ride. Proper cost-containment is multi-factorial: getting all the components right can have a measurable impact on your savings and protect your members from a sometimes dangerous US healthcare system. My advice is for you to roll up your sleeves and really take a deep dive into the cost-containment process and become familiar with the many subtleties in this space.
#PolicyAllToPot: People ask me all the time what I think of this or that approach or tactic for cost-containment, and my first words are always, “Does your policy allow you to do that?” Most of the time it doesn’t. At the end of the day, policy wording review is a relatively simple fix and I am astonished by the slow adoption of this measure. As written, most travel insurance policies basically say that they will pay whatever the healthcare provider charges, effectively turning members into “blank checks.” The US is the single most important location where improved policy language can be a benefit for you and your members. You need to outline a maximum allowable reimbursement not tied to charges at all (just take the word “charges” out of there completely) and cite specific benchmarks that you could use to make a reimbursement determination. I have even seen some policies specifically listing a percentage of the US Medicare rate. This gives travel insurers (and their agents) needed leverage to have a settlement discussion with US healthcare providers. Not only are the reimbursement rates important to define, you also need to define reasonable and necessary services. With 30% of care in the US being unnecessary or wasteful (according to many reports), have you signed up to pay for these expenses?
That was it in a nutshell! My co-panelists shared some thoughts as well and we debated cost-containment issues – all in all, a great way to spend 90 minutes. I want to thank my friends at ITIC for inviting me to speak at this wonderful event.