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New Hope for Healthcare Costs: Cash Pricing
Negotiating cash payments with medical providers outside the managed-care realm can save a bundle.
Most employers are already implementing a variety of strategies to contain health-care costs, such as restructuring benefits, establishing coverage tiers and opting for value-based purchasing or private health-insurance exchanges. CFOs should also, however, look at market-based solutions.
In particular, moving to a cash-pricing model for elective health-care services — that is, virtually anything other than procedures in response to sudden emergencies, like heart bypass surgery in response to a heart attack — has great potential to curb costs. A vast majority of medical procedures are elective.
Cash pricing refers to a payment for medical services that is negotiated between a patient and a provider. Whereas contract rates in PPO health plans are negotiated annually between payers and providers, reflecting the relative market power of each party in a given area, with cash pricing, providers bid on a specific procedure for a specific patient in competition with other providers.
Read the full story here: http://bit.ly/1hMdv2q
Source: CFO
Managed Care Reflections: A Q&A With A. Mark Fendrick, MD, and Michael E. Chernew, PhD
December 2nd 2025To mark the 30th anniversary of The American Journal of Managed Care (AJMC), each issue in 2025 includes a special feature: reflections from a thought leader on what has changed—and what has not—over the past 3 decades and what’s next for managed care. The December issue features a conversation with AJMC Co–Editors in Chief A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design and a professor at the University of Michigan in Ann Arbor; and Michael E. Chernew, PhD, the Leonard D. Schaeffer Professor of Health Care Policy and the director of the Healthcare Markets and Regulation Lab at Harvard Medical School in Boston, Massachusetts.
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