RBP Benefit 4: Streamline your Company’s Health Insurance Process
Coordinating health coverage and medical care necessarily involves multiple parties. Traditional health insurance policies, however, involve one more party than there has to be — health insurance company managed care networks (i.e. PPO). By eliminating the need for health insurers networks, reference-based pricing streamlines health coverage and makes many people’s lives a little easier. One of the parties that benefits from this increased efficiency are human resources representatives.
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(This is the fourth installment in a seven-part series on the benefits reference-based pricing has for human resources representatives.)
The Old Way: Traditional Health Insurance Plans Have Middlemen
Traditional health insurance plans necessarily involve health insurance company managed care networks. There’s no way to get a standard health insurance policy without talking to an insurer, as they’re the ones that provide plans.
Health insurers when it comes to negotiating doctor reimbursements, however, are little more than middlemen. In fact, they’re right in the middle of everyone involved in health coverage and medical care. Insurers are between:
- employers and employees, as they underwrite the policies employers purchase and employees have
- employees and providers, as they determine what procedures are covered and how much is paid to providers for those services
- employers and providers, as they determine what providers are part of an employer’s plans network
Going between all these groups isn’t necessarily bad, for health coverage is a complex matter that frequently requires specialized knowledge. Health insurers don’t just coordinate between all of these parties, though. They take an active role in negotiations, and they often are the driving force behind coverage decisions.
The New Way: Reference-Based Pricing Doesn’t Need Health Insurers
Reference-based pricing works very differently from traditional health insurance policies. Instead of having an insurer determine what providers are in a network, what procedures are covered and how much a policy costs, these decisions are made directly by employers and providers. Employers choose how much to reimburse providers, and providers decide whether to participate in an employer’s RBP plan.
Most employers choose to work with a third-party administrator when setting up a reference-based pricing plan, but a third party administrator is not an insurer. They don’t provide the plan, and they don’t make the decisions about the plan. They’re simply available to provide specialized knowledge when necessary and to carry out the logistics of executing the health plan on behalf of the employer. For example, they can help an employer find providers that will participate in an RBP plan — but they don’t actually decide what providers are included.
The Result: Human Resources Representatives Don’t Have to Talk with Insurers
By eliminating any need for a middleman, reference-based pricing makes human resources representatives’ jobs easier. HR representatives are frequently heavily involved in setting up, promoting and maintaining a company’s health coverage. Replacing a middleman with an assistant reduces how many parties HR representatives must go between, and it gives them a useful resource for when they have questions.
