Reducing health care costs for self-funded employers: analysis of the HSM model

Healthcare payers face an overwhelming burden of rising healthcare costs as healthcare spending has grown exponentially over the past decade. According to the most recent Kaiser Family Foundation (KFF) Employer Health Benefits Survey, the annual deductible for single coverage has increased more than 60 percent over the past decade, rising from $1,097 in 2012 to $1,763 in 2022. Similarly, average premiums for family coverage have increased. increased by 24% during the same period.

Many health care consumers and payers have been overwhelmed by the burden of health care costs to such an extent that many employees avoid or delay recommended treatments or tests to avoid falling deeper into debt. According to the KFF Health Care Debt Survey, the huge financial costs of care have pushed more than 70% of adults into debt due to cancer treatment, while 25% have declared bankruptcy.

Healthcare payers are no longer comfortable with the current state of US healthcare and are exploring new solutions to reduce healthcare spending without compromising quality of care and treatment outcomes. One of these solutions is contracting care with international providers who provide first-rate care at a fraction of US costs.

HSM Solutions, a nearly eight-decade-old private firm specializing in bedding, furniture, transportation and other markets, is a good example of a self-funded employer that has taken control of its health care spending through direct contracts with health care centers. first-class excellence abroad that surprisingly offers treatments at prices that reach more than half the cost in the US

In a webinar with Jonathan Edelheit, president and co-founder of the Global Healthcare Resources Association and Medica Tourism, Tim Isenhower, Director of Benefits at HSM, talks about how HSM began exploring medical tourism as a solution to provide access quality, but affordable. healthcare offerings for its thousands of employees and how this has affected workforce health metrics.

HSM launched the direct contracting program in 2007 with medical centers and clinics in various parts of the world, including India and Costa Rica, some of which have been affiliated with global centers of excellence in the United States and other advanced countries. These hospitals, according to Tim, were some of the best hospitals in those countries, but offered quality treatment comparable to that offered in the US at a fraction of US costs.

For Tim, what would have been just a cost reduction also turned out to be a significant improvement in patient outcomes.

“The first thing we saw was the misdiagnosed cases and procedures we were paying for in the US,” Tim said. “I remember a lady I sent from Mississippi to India for weight loss surgery that had been recommended here in the US; but when he arrived in India, the doctors were very thorough, ran several tests and discovered that he had a pituitary tumor that was causing the weight gain. So they didn’t do the weight loss surgery, they removed the pituitary tumor and her symptoms went away.”

“After that, we offered a second opinion package for all employees who had surgery to consult with these doctors in India to assess, and what we found for a gentleman who needed a hip replacement of it was that the doctors in India, after reviewing his records and ordering a few more tests, discovered that the hip problem was coming from the spine,” Tim said.

Over time, employees embraced the program as these positives emerged and employees discovered that they might not need surgery at all or might need a different surgery to restore their health than the one originally recommended by US doctors. And, as Tim adds, these programs have had zero cost to employees, compared to paying up to $5,000 out of pocket for the same procedure in the US.

Ultimately, the cost savings for health expenses increased as more employee acceptances were recorded, by millions of dollars each year. According to Tim, since 2011, when the direct contracting program was only 3-4 years old, the company had seen over $11 million in savings.

“We had a gentleman last week who had a prescription for infusion therapy for multiple sclerosis. When we got him, he had his first infusion in North Carolina for $198,000, he had his second session in July, but we were able to send him to the Cayman Islands and he had that infusion for $26,000,” said Tim.

“For example, these surgical replacements are very expensive here in the U.S. We’ve found that if you do these replacement surgeries or back surgeries in the Cayman Islands or Costa Rica compared to the U.S., you can save several hundred thousand dollars,” Tim. explained. He also noted that the company saves $20,000 to $30,000 for each knee or hip replacement performed in these overseas hospitals.

Tim also noted that even with payments for lodging, transportation and tourism activities for employees and their companions who travel with them, the company still doesn’t pay as much as it would in the United States. Promoting care in these countries that also offer great tourism opportunities and recreational offerings for patients and their companions also serves as an incentive for employees to opt for these programs and improve treatment outcomes and promote early recovery.

Duplicating this program in other organizations may face similar challenges, including employee reluctance, media misinformation, and lack of cooperation from local hospitals and healthcare providers, some of which Tim alluded to. However, employers must take the time to do their due diligence, connect with the right medical travel facilitators, and provide the right education to employees about the benefits of receiving care at medical travel centers around the world.

Global Healthcare Accreditation (GHA) helps companies reshape their healthcare offerings to optimize care while reducing costs. GHA works with and has accredited some of the world’s best international hospitals, including Asan Medical Center in Korea, Bumrungrad International Hospital in Thailand, and My Spine Center at Clinica Santa Clarita in Mexico, which offer robust international patient care programs.

GHA remains a key stakeholder in the medical travel ecosystem and is also motivated to provide solutions that promote employee health and well-being. Through certification and accreditation programs, GHA raises the bar in the system, ensuring that healthcare is safe and top-notch for healthcare payers. GHA gives companies access to the tools, resources and partnerships they need to transform employee healthcare packages, connecting them with key leaders and stakeholders in medical travel and providing the right solutions to meet employee health needs at affordable costs .

Leave a Reply

Your email address will not be published. Required fields are marked *