HealthCare Direct (HCD) Introduces True Hospital Price Transparency in its Innovative Scheduled Benefit Plan Featuring Maximum Allowable Costs

HealthCare Direct (HCD) has introduced a new employee benefit health care coverage product that encourages consumerism in the cost-effective use of employer provided health care coverage. The program saves employer benefit expenses by paying pre-negotiated maximum allowable flat rates to hospitals for 26 of the most common in-hospital admissions. Annual claim cost savings in the range of 10% to 20% are possible. The fixed rate product includes two of the most cost-efficient quality Milwaukee metropolitan area health care systems - ProHealth and Columbia/St. Marys. These two hospital systems have agreed in advance to accept the maximum allowable rates as payment in full. Guaranteed fixed hospital rates have been negotiated and are effective until 2008.

(PRWEB) September 28, 2005 -- HealthCare Direct, LLC (HCD), an emerging PPO network plan in Southeastern WI, has introduced a product with fixed rate allowables for 26 common inpatient hospital stays. Two prominent area hospital systems, ProHealth and Columbia/St. Marys have agreed to accept these set rates as payment in full for their bills for any of the indicated hospitalizations. The 26 types of hospitalizations (as described by U.S. Government defined Diagnostic Related Groups or DRGs) represent about 50% of hospital claims cost for an average employer group. Estimated savings of 10% to 20% on annual claims costs are possible when compared to standard PPO discounts.

For example, the HCD maximum covered hospital cost for cardiac bypass surgery (DRG #107: cardiac bypass with insertion of catheter) can save an employer claim costs of between $18,000 to $50,000 for each procedure done.

Bob Brill, HealthCare Directs marketing consultant, explains how this is done. The HCD Scheduled Benefit Plan is not simply another discount arrangement, which over time have proven to be ineffective in managing out-of-control health care costs." Instead, it is a revolutionary, long-term, fixed rate plan built around specific, published and guaranteed maximum allowable hospital prices."

The covered maximum allowable hospital benefit for each of the 26 DRG defined hospitalizations is pre-negotiated, and communicated to individuals covered under the plan. Covered employees or dependents who seek in-hospital care at either ProHealth or Columbia/St. Marys hospitals for the scheduled DRGs have the lowest out of pocket exposure in the benefit plan." Employees or dependents that go elsewhere for the same procedures will pay much more in out of pocket expenses", Brill states.

Jack Meler, HealthCare Directs CEO, indicated that This fixed fee product ushers in a competitive new era not only in price transparency, but also in supporting consumerism in health care. Enrollees are rewarded for seeking care with two of the most cost effective health systems in the area, which at the same time saves significant employee benefit health care expenses for employers. From the hospitals perspective, the 'fixed rate product drives volume to the more efficient, lower cost, and higher quality providers."

According to Richard Blomquist, a well-known Milwaukee area managed care executive, The maximum allowable cost approach, recognizes that over the past decade the price of hospital costs has evolved to the point that the cost of identical services can vary by 300% to 400%. The Scheduled Benefit Plan forces the market to accept a reasonable price and concentrate on quality of care."

The entire HealthCare Direct PPO network includes 30 hospitals and over 4,300 professional healthcare providers in the seven county southeastern Wisconsin area.

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