A long time friend who has spent almost all of his working life in the pubic purchasing arena in Texas has a perspective that many of us in the insurance community have failed to acknowledge.
By Bill Rusteberg
Working for political subdivisions in purchasing throughout his working years, Adrian was tasked with managing and supervising the competitive purchase of group health insurance. It was my pleasure to assist him as an outside consultant from time to time over the years.
“Bill, it’s that time of year again. We must go to bid for health insurance and I need your help!” would be the summons.
On the last assignment we worked together, while we were analyzing proposals received, he turned to me and said something profound that I had never heard before from anyone in our industry.
“Bill, I don’t know why we are wasting our time on this. Every time we seek competitive bids for health insurance, the cost always ends up being the same no matter who is awarded the contract. For example, our annual cost last year was $17 million. Even if we change this year and go with the “low bid” our cost next year will be $17 million. And the cost goes up 5-10% or more every single year like clockwork. Just look at our past 10 year history………….it’s true!……………The whole idea of going to bid to save taxpayer money doesn’t apply to health insurance.”
He’s right of course. When Texas political subdivisions go to bid for health insurance they simply slap together last year’s RFP specifications including the request “match or exceed our current benefit plan” along with the staus quo ritual of a PPO re-pricing exercise (a fraud perpetuated by status quo consultants) in order to determine which network has the best pricing. (See The PPO Claim Re-Pricing Charade & Smoke & Mirrors – Comparing PPO “Discounts”)
The fact of the matter is no matter which vendor gets the nod, all managed care contracts guarantee cost increases year after year.
Changing a logo on your health insurance card does not save money.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Related Posts: (To see more use search box)
Charge Master Rates & Magical Discounts
Hospitals Dismiss Significance Of Chargemaster Prices?
Health Care Strategies for Political Subdivisions
Why Did It Take So Long To Realize PPO’s Suck?
PPO Escalator Clause Directly Attributable to Medical Trend Factor
PPO Escalator Clause Directly Attributable to Medical Trend Factor
PPO “Discounts” Are The Things of The Past
PPO “Discounts” Off Billed Charges Mean Nothing
PPO “Discounts” Mean Nothing – Only Dummies Remain Enamored
Why The Healthcare Industry Will Eliminate PPO Networks
Converting PPO “Discounts” To Medicare Allowable
Bernhard Opines on Fake News – PPO Discount Game
Smoke & Mirrors – Comparing PPO “Discounts”
PPO Networks: The Devil Employers Think They Know
Hospital PPO Pricing Exposed in South Texas
THE TRUTH (as we see it) About the Blues PPO Discounts
Kidney Heists, Alligators & PPO Networks
The Coming Demise of PPO Networks
Are PPO Networks the Worst Negotiators in the World?
Moving Away From PPO’s Can Be Legally Challenging – Contracts Really Do Mean Something
Wikileaks: Mulebriar Exposes PPO Kickback Scheme
City of Lewisville Publishes Health Insurance Analysis – Compares Cost Plus To PPO
Are PPO’s Saving Money, Or Costing Employers More?
Have PPO Networks Perpetrated The Greatest Heist In American History?
The PPO Claim Re-Pricing Charade
Taking PPO’s Into The 21st Century
Billed Charges vs PPO Allowed Charges vs Cost Plus Insurance
Working the “Spread” – Another PPO Revenue Stream
PPO Requires Payment of Denied Claims?