Discounts Don’t Matter

Medical discounts are a scheme used by health insurance companies, service providers, hospitals, and others in the medical supply chain to show “value” to their customers. “Look at how much we saved you! Aren’t you happy you choose us as your partner! Just imagine what you would have paid without us!”

A recent example illustrates the scheme to prove value when there isn’t any. A Reference Based Pricing vendor presented a 2nd year renewal offer with a 50% fee increase (it was really a 65% fee increase after the TPA added their “integration” fee. 

A PPO representative would blush at the thought.

The trade off? The renewal showed a whopping savings between billed charges that no one ever pays and the allowed amount the plan would have paid anyway.

Here is an excellent read that reasons Discounts Don’t Matter.



From Dr. Belk

What a coincidence. I just gave a talk addressing that last Wednesday. Here’s a video of that talk: