New Options Available to Reduce Health Care Costs

The cost of providing health care coverage continues to increase for businesses. To off set the rising costs some companies have increased the employee share of the premium or opted for higher co-pay plans. Houston Public Radio's Rod Rice reports that another option is to by-pass the insurance company altogether.

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This sort of health care, though, is only available in an area with an organization such as Houston's Kelsey Seybold Clinic. It offers a direct contracting program called Kelsey Care. Spencer Berthelsen is Kelsey Care's Chairman of the Board.

"Kelsey Care is an arrangement where the Kelsey Seybold medical group contracts directly with a self-funded employer to provide medical services without the insurance company in between. That gives us the benefit of lower administrative costs, but it also is an arrangement where patients come to us for all of their care, and that allows us to coordinate all of their care. We are able to do that with a total cost that is typically about 10-20% less than might occur in the usual arrangement."

Berthelsen says at least one of their clients has saved a lot of money over a short period of time.

"We have a case study in which we were able to save a large client as much as a million and a half dollars over the course of two years."

Waste Management offers its Houston employees an option of either a traditional insurance based PPO or Kelsey Care. Dr. Ben Hoffman is Waste Management's Medical Director.

"We decided to offer that because we were interested in developing a high performance network here in Houston. I've been of the belief for many years that a multi-specialty group practice, integrated into a full health care system such as St. Luke's is the best way to deliver all levels of care."

Hoffman believes this model is the most efficient way to provide health care.

"They share medical records, the doctors are monitored as to what they do, there aren't financial incentives, it's the right way to do things. If you have good doctors and well run system, which is what you do have over there, you can't have a more efficient way of delivering care."

The direct contracting method usually is better at emphasizing prevention, early detection and disease management. Hoffman says the bottom line is that in addition to trimming the cost of providing health care this program yields a high degree of employee satisfaction.

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