Directed network and purchasing choice solutions can create effective, affordable care

Far too often when I am talking with clients and prospects, I hear them say that both they and their employees are sick of the current healthcare system. Healthcare is expensive to offer and the system is riddled with waste, inefficiency, and ambiguity.

These costs get built up even more when the carrier comes in with annually compounded renewal increases. Decreases are rarely offered by carriers, so it is important that a business’s broker is also a consultant working hard to combat rising costs.

Unfortunately, most brokers struggle to be effective consultants. The usual playbook at renewal will include some cost-control levers that can be pulled, such as raising deductibles, maximum out-of-pocket limits, and copays. Next, they will quote the market to search for a cheaper carrier or vendor.

Read more: Don’t let medical bills break your employees’ retirement savings

However, cheaper is not always better. The more those levers are pulled, the more employees become dissatisfied with their employee benefits package. Personally, I have never heard of employees being excited about switching to a new carrier multiple years in a row.

Employers have every right to be tired of this system. Their employees have every right to be tired of this system. The current system is broken. It was not designed with their best interests in mind, but rather the profits for various players like carriers, hospital systems, and pharmacy benefit managers.

What if the model was flipped upside down? What if we could eliminate waste, inefficiency and ambiguity, while providing employees with healthcare that is simple, transparent and affordable?

Savvy business leaders who think outside the box are ready to explore new ideas to old problems in the healthcare industry — and this is where directed network and purchasing choice solutions come into play.

Read more: Voya research shows employees are biased toward HDHPs

Directed network and purchasing choice solutions will provide employees with a great network, pricing that is upfront and transparent, and lower costs for going to higher quality providers.

Think about the last time you needed non-routine care. Your first stop was probably at your primary care physician’s office to get their opinion and get a referral to a specialist. When they made that referral, did you ask them why they referred that doctor or facility?

Usually there is a kickback program in place, or sometimes the PCP has been instructed to keep patients within their hospital system. Their intentions when making a referral do not necessarily line up with your goal of going to the highest quality and lowest cost facility possible.

How would that process have looked if you could quickly look the procedure up, see the options available in your area, and see the cost of that procedure at that facility before you even walked in the door? I doubt you end up at the same doctor that you would have otherwise.

Read more: High healthcare costs are pushing employees to put procedures on hold

When people know where to go, who to see, and what they will pay ahead of time, their satisfaction with the plan will increase. This will also lead to lower claims utilization, because there will be fewer repeat visits due to employees seeing higher quality providers. On top of that, people will almost always choose to go to the lower cost provider or facility when they know it is still convenient, a quality provider, and it actually costs less.

Employers need every tool they can get access to in order to better control their health insurance expenditures — and directed network and purchasing choice solutions should be in their toolbox.