David and Stephanie paid $5,000 for braces for each of their two daughters. After discovering a consumer-driven health benefits plan, they paid $2,200 for child number three. A savings of 56 percent! And that was at the very same dentist in Glendale, California, that cared for the first two children.
Dentists all across the USA are joining up with plans that support consumer-driven healthcare. What is Consumer-Driven Healthcare?
Families are feeling the pain of healthcare costs in their pocketbooks. Corporate America is feeling the pinch, too.
Wasn’t the managed care of the early 1990s supposed to be the magic cure to reduce healthcare inflation and improve healthcare quality?
The magic cure turned out to be a problem, not a solution. Patients rejected the model and its limitations on doctors and hospitals. It was also criticized for letting insurance companies determine how doctors should treat their patients.
That’s why there’s a movement toward consumer-driven health care, a concept still in it infancy but gaining momentum. It brings to health care the benefits that other consumer-driven industries enjoy – choice, information and control.
Transparency, or competition, reduced the prices and improved the quality of products in other industries. Consumers successfully make purchase decisions about cars, computers and financial products, so why can’t they make an educated decision about their health care, asks industry expert Regina Herzlinger, Harvard Business School professor.
Why does consumer-driven health care work? It eliminates the insurance intermediary and puts the power to choose healthcare providers in the patient’s hands. When providers and patients deal directly, cost savings are passed on to the patients.
Those savings can be substantial, considering that a doctor treating a patient with insurance coverage nets only about 42 percent of his customary fee. Between the discounts the doctor gives to the insurance company, and the cost of filing and collecting claims, up to 58 percent of the doctor’s customary fees can be eaten away.
Consumer-driven healthcare companies such as discount health plan providers negotiate discounts for patients and pass the savings to their members. Members can receive substantial savings, and doctors and dentists can retain more of their revenue by eliminating the middleman.