By Sally Pace
The Five
It’s almost like the start of a bad joke. A Third-Party Administrator, a Reference Based Pricing Solution, and a Stop Loss Provider walk into a bar… Yet for many health plans, each of these components is fulfilled by a different solution provider. In this brave new world of “unbundling” point solutions, brokers are left to their own devices to craft an ideal health plan built to cut through the noise of a static and unsustainable traditional model where prices often incrementally increase year over year. In the face of this era of unbundling as an effort to go against the big carriers, solutions like Homestead Smart Health Plans have risen in popularity because they wrap together the services that have been unbundled from a traditional carrier to serve the unique needs of a more sophisticated broker market who is expecting higher returns and better cost containment results for the members they serve. And that is anything but a joke.
A solution like Homestead Smart Health Plans offers a unique health plan that integrates a Third-Party Administrator (TPA), Reference Based Pricing (RBP) solution and Homestead Insurance Company (stop loss provider). In turn, they are arming brokers with a way to help their employer clients take back control of their employee benefit plan, offering an average savings of $2,500 per employee per year or approximately 25% per year.
Why does the unbundled/rebundled solution have appeal to employers?
Healthcare costs increase by an average of 6% every year, outpacing overall inflation. The employees’ share of this increase continues to grow and, in many cases, has outpaced their salary increases. This isn’t sustainable for obvious reasons. For many, it feels there is no end in sight.
Healthcare for their employees and their families represents the 2nd or 3rd largest cost to employers, yet they have very little insight into these increasing costs and little control over the employee satisfaction of their benefit plan.
Building on fair market value.
Homestead allows our clients to provide a health plan design based on fair market value which saves not only the employer group but also creates an environment of consumerism that helps health plan members shop for care, allowing them to meet their unique medical and financial goals.
Homestead Smart Health Plans utilizes a holistic model where rising healthcare costs are attacked from every possible angle with five integrated solutions - TPA, RBP, Stop Loss, PBM and Medical Management. “Our TPA is the hub of the ecosystem that touches every single claim,” explains John Powers, CEO of Homestead Smart Health Plans. “Our RBP Model drives the most savings.” Many believe RBP is a product, but Homestead teaches brokers and their employer group clients that it’s a claim pricing methodology that continues to evolve. One way to view it is as a PPO replacement solution. Through Homestead, plan sponsors have a different experience. “At Homestead, our RBP model reimburses claims at fair market value, setting a reimbursement level that utilizes multiple data points including Medicare, a facilities cost-to-charge ratio and our own 10 years of reimbursement data to come up with a permitted payment level that is fair for the plan, the member, and the provider,” according to Powers.
Making the right move at the right time.
As with other health plans, employers should be evaluating well in advance of their renewal date. Changes toward a model like the one provided by Homestead typically align with the plan’s renewal.
Homestead Smart Health Plans allows brokers and their employer customers the opportunity to take back control of their medical benefit plan. “Brokers can provide a readily available data set to obtain a comprehensive savings analysis,” shares Powers. “The key phrase here is to take back control, meaning they currently don’t have control.”
We are proud to feature Homestead Smart Health Plans on The Granite List.