MediBid and Changing the Way We Buy Medical Care FMMA Inaugural Meeting Ralph F. Weber AEP, CGBM, ChFC, CLU, CFP, GBA, REBC
What is the Product • The “Product” used to be “medical services” • It has become “Healthcare” • Medical Care is a by-product of Healthcare
How Do We Buy the Product Now • We select a “healthcare” product • “Healthcare” dictates how much “medical care” we are entitled to • Medical providers are instructed to bill artificially high rates, the healthcare provider takes an artificial discount to come up with an artificial allowable, then the provider is paid a portion of the allowable
What is the By-Product • Medical Care becomes the by-product of healthcare • How does the little wedge push the big pie?
How do we Buy the By-Product • We have little control over this decision • Annual CLIFF Deductibles increase utilization • Little transparency
Admin Profit Etc. Medical Costs The way the 85% MLR is supposed to look 80% 20%
Admin Profit Etc. Medical Costs PPO Leakage MLR with PPO Leakage 74% 6% 20%
Static Pricing vs. Dynamic Pricing • How did we used to buy air travel or hotel rooms? • Why do cartels embrace fixed prices? • What industries use Dynamic Prices? • Dynamic prices create efficiency
What Travelocity did for Travel • Travelocity revolutionized dynamic pricing for a complex product • Just-In-Time-Inventory • What does overstock do to efficiency?
How the same Principles can apply to Medical Care • Insurance used to be a risk protection and financing vehicle, yet as complex as healthcare has become, the product needs to be redefined. I believe that we need to turn back the clock to when we purchased “medical care services”, and re-design financing and risk management vehicles to wrap that. This will require not only transparency in price and quality, but also competition among providers. Millennials will not accept the health plan making choices for them, they will want to do the research for themselves, and our industry needs to respond to this paradigm shift.
Educating the Public • https://www.youtube.com/watch?v=uzqF-J81yQI Here’s the thing #1 • https://www.youtube.com/watch?v=L1bbll3E6D4 Here’s the thing #2 • https://www.youtube.com/watch?v=T3h8LC-R-Ek Here’s the thing #3 • https://www.youtube.com/watch?v=lwcbFZwbNT8 Here’s the thing #4
PIG!!!
Shifting Paradigms • Will Millennials embrace the status quo? • What is the future of networks? • Narrow Networks • Medical tourism • Reference Based Pricing • Medical bidding
Florida • The state of Florida was looking for alternatives to unsustainable trends • They wrote a bill which passed with almost unanimous bi- partisan support • The bill embraces a new paradigm in “healthcare”
Wave of the Future • http://youtu.be/EqKkkC4qs8E
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