A Tool to Reduce Health Spending

Reviewing health care prices

A Tool to Reduce Health Spending

By Grant Dattilo

More affordable health care has become the goal of all employers offering group insurance. Benefits administrators can show employees ways to save health care dollars using powerful price transparency tools now available in Minnesota. We will provide you with that tool.

It takes time and effort to find a better price for health care, but in the long run, it saves employers and employees money. The good news is that eighty percent (80%) of health care services are shoppable. This means that a person has time to shop for a doctor, hospital, scan or lab test. Most of the time, a medical need is not an emergency.

Knowing that there is time to shop can save hundreds and even thousands of dollars for a single medical encounter. For example, in Minnesota the price variance of 118 common, shoppable health care expenses is 351 percent.[i] This means a person could pay anywhere from $100 to $351 for the same diagnostic service – potentially saving $251.

Another example: The price variance for a knee replacement in Minnesota is 650 percent – from $6,666 to $43,359. [ii] Without knowing the price, a person could pay nearly $37,000 more than necessary for the same knee surgery.

The key factor is knowing the price in advance before spending the money.

Employers and employees who pay high health insurance premiums for their group benefits, now averaging $20,576[iii] a year (2019) for family coverage, are searching for ways to reduce health care costs.

Minnesota’s employers and employees have long wanted the ability to know the price of care ahead of time – just like with car or home repairs. Now, Minnesotans can get a good faith estimate for health care.

A Minnesota law now requires providers and insurance companies to provide individuals with Good Faith Estimates. Few employers and employees know about this law, until now.

The new Minnesota law can help employees make better use of cost reduction tools by knowing price information in advance of deciding which provider to use. Even though the health plan may require an employee to stay within the network to take advantage of discounts, the Good Faith Estimate tool can help them choose among network providers.

Use the request form to download a free copy of the Good Faith Estimate law. Or call DCI-ClientServ at 952.448.8800.

[i] State of Minnesota, Minnesota Community Measurement Report for 2018.

[ii] State of Minnesota, Minnesota Community Measurement Report for 2018.

[iii] Kaiser Family Foundation, 2019.

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For the 80% of health care services that are shoppable, under Minnesota law, a person is entitled to a Good Faith Estimate of the costs in advance. This tool explains it.

Dattilo Consulting, Inc

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