Cash Driven Health Plans Make Sense

Great Ideas And Business Models Are Often Memorialized on Bar Napkins…………………

By Bill Rusteberg

Everyone knows Cash is King. And everyone has a story about how its cheaper to pay cash for medical care than to use insurance to pay for it. So why doesn’t your health plan pay cash too?

We call a Cash Pay Driven Health Plan a CPO.

The Plan, through it’s designated Cash Manager, becomes the center of the plan rather than a traditional TPA model wherein the TPA assumes a dominant role around which the entire plan revolves. In the CPO model the TPA is relegated to more of a record keeping role while the Plan’s Cash Manager assumes many of the functions a typical TPA provides.

We have found CPO’s pay on average less than 130% of Medicare and sometimes below Medicare rates producing substantial savings over traditional managed care plans. And unlike Reference Based Pricing plans with all the associated noise issues abhorrent to HR staff, the noise level under a CPO is essentially nonexistent and there are zero balance billing issues to deal with. Patient satisfaction is the highest we’ve seen since a CPO waives all patient financial responsibility on the plans we manage.

We implemented several CPO’s in the past six months and find up to 90% of claims are cash paid. But it is too early to tell the true net effect so we will have to continue to monitor plan performance until we can garner credible experience. is a specialty company in the benefits market that, while not an insurance company, works directly with health entities, medical providers, and businesses to identify and develop cost effective benefits packages, emphasizing transparency and fairness in direct reimbursement compensation methods. Contact Bill Rusteberg –