An employer coalition that uses cash pay and a variety of other strategies to hold down health care costs launched in Oregon this month.
Employers Health Coalition of Oregon grew out of the Employers Health Coalition of Washington, which launched in 2010. The coalition is not a trust or association but a Joint Purchasing Agreement. The coalitions, which are nonprofit, are primarily designed for public employers, although some private businesses have taken advantage of the programs, said Keith Robertson, executive director of the Washington coalition.
“We’re able to gain purchasing advantages by aggregating volume and accessing preferred pricing channels,” Robertson said. “We have way to relieve the financial strain without changing the benefit.”
The strategy revolves around unbundling the health care benefit and accessing purchasing channels that large employers have traditionally used. Rather than bundling medical, pharmacy, vision and case management together in one package, coalition members can implement specific programs tailored to their employee populations.
For example, Robertson said four member groups are reducing the cost of inpatient procedures through paying pre-negotiated cash rates upon admission. The cash price, which hospitals charge patients who are uninsured, is always less, he said.
The way it works is employees contact the coalition’s vendor prior to a non-emergency procedure and the vendor negotiates a cash price with the hospital. The patient pays nothing out of pocket and the provider gets paid upfront, with no chance of non-collection, Robertson said. The strategy results in an average cost reduction of between 30 and 40 percent per procedure, he said.
There’s also potential savings to be gained of 15 to 20 percent on pharmacy benefits for coalition members. The City of Everett cut its pharmacy costs by 17 percent, Robertson said. The City of Kirkland has also cut its claims costs significantly, in part by providing free, unlimited primary care at cost.
The coalition is holding a free luncheon event in Portland on Feb. 6 at 11:30 a.m. at the Multnomah Athletic Club. Korb Matosich, co-founder and president of Asserta Health, will deliver the keynote address about pre-negotiated cash-upon-admission discounts.