Wednesday, March 2, 2016

What Can We Do to Excite Business Owners About Reducing Health Care Costs?

The Triple Aim (Better Health, Better Care and Lower Cost) movement is under way in our country. Many people now know that we have the best doctors and nurses in the world but they work in a system that spends at least 40% more per capita on health care than all other countries. Those in the Triple Aim movement are working to redesign this system.

The notion of value is well understood by the consumer –“What am I getting for my money?” The smart shopper doesn’t pay 40-50% more from one retailer when they can get the same or better quality product for less from another. But why is it that so few self-insured employers are on this value bandwagon?

Almost all self-insured employers (which is most employers with at least a few hundred employees) don’t differentiate between high cost and lower cost providers of care even when the outcomes are the same or even better at the lower cost provider. Instead, to try to make health insurance affordable for their companies, they have turned to high deductible plans which put a greater financial burden on their employees.

Health insurance companies have created “tiering” for drugs. The idea of tiering is that you pay less out of pocket if you pick the lower cost drug that will get the same outcome. So, if you take the generic, you pay less of a co-pay whereas if you take the higher cost “brand” name drug, you pay more. We are very proud at GBMC of our platinum health care plan because if you pick GBMC, a lower cost high-value hospital, and its doctors, you don’t pay anything out of pocket. You could still go to a much higher cost hospital for the same care and the same outcome, (Maryland hospital rates can vary by as much as 60%) but you have to pay more out of your own pocket to do that. It used to be that our employees paid the same deductible if they got their gallbladder removed at a hospital that charged $10,000 for the episode as they paid if they went to a hospital that charged $16,000 for the same quality outcome. We now use tiering and we have saved a lot of money that we apply to other things like annual salary increases. It puzzles me that the companies managing healthcare for self-insured employers don’t help them setup tiering the way we have for GBMC as an employer. It is a win-win – the employee has lower out of pocket cost and the employer saves money.

What are your thoughts? Why have employers not driven towards value-purchasing for health care like they have for everything else that they buy?

Helping those in need…
This year, as part of our first ever Random Acts of Kindness initiative, GBMC and our off-site locations, participated in a canned food drive to benefit the Bea Gaddy Family Center. I just want to thank the hundreds of GBMC staff and volunteers, who always rise to the occasion to help people, along with our patients and visitors, who helped contribute to the drive.  Over 1,200 lbs. of non-perishable food items were delivered to the Bea Gaddy Family Center that will be provided to children and families in need. Special kudos to the Black History Month Committee who for the the second year devoted time to collecting food donations for Bea Gaddy during Black History Month! This endeavor was so valuable because we all know that the hunger crisis in our state doesn’t disappear after the holiday season.  It’s a problem all year long and for this reason, I am also very grateful to our Philanthropy and Marketing Departments who ran the drive for us and for making it such a success!


  1. I think its because there hasn't been strong enough advocacy for the method GBMC uses in regards to value-purchasing for healthcare. Its also a confusing time for the health insurance market. The Affordable Care Act's impact on the market is not yet fully realized nor understood.

    1. Thanks, Jordan. I agree. I wrote the blog in part to generate advocacy for high quality, lower cost healthcare.


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