Living in small town America has its pros and cons. The pros? Wide open spaces and simpler living, a neighborly connection to the people around you and being surrounded by nature, which soothes the soul. The cons? However, there’s little access to the conveniences of urban life. There’s maybe one Uber driver in town, if that, and there’s no Whole Foods within an hour’s drive. Not to mention, the words “y’all” and “ain’t” and the phrase “bless your heart” are heard around every corner. I’ll let you decide if that’s a pro or con.
So, suffice it to say that I do my own grocery shopping. I like it, honestly. I’m a former registered dietitian, so I like looking at food labels and get satisfaction in knowing I chose (in my own opinion) the right product off the grocery store shelf. But, what’s my ultimate goal? Frankly, it’s pretty simple. I just want to fill my family’s bellies with healthy meals. But there’s one important factor standing in the way: How much money should it take to put healthy meals on the table? Simply stated, it’s bellies filled without bank account emptied.
A few years ago, I sauntered around the aisles of the new Aldi grocery store that had just opened in my town. Change isn’t easy, so I didn’t even grab a cart when I walked in. I was only there to see what all the fuss was about. Here’s what I observed. First of all, you “rent” your cart by inserting a quarter into the mechanisms that lock them in place so that they aren’t strewn all over the parking lot, dinging car doors and requiring a paid staff member to round them up.
Speaking of paid staff members, this is notably another huge difference and cost containment strategy. The staff at the checkout are seated, which keeps them fresher and saves their legs for other tasks around the store. You bag your own groceries, so customers bring their reusable bags (which is a good thing anyway). I could detail more observations, but let’s get to the real story.
Prior to making any changes in my grocery shopping habits, I was spending roughly $150 per week to fill the bellies I’m responsible for. Once I started doing more shopping at Aldi, that was consistently reduced to around $50 per week. Here are a few questions you might be asking: Were you still able to cook the same healthy meals? Yes. Was the quality of the products you bought compromised? No.
So, why am I writing about grocery shopping when you know me as an employee benefits advisor? I’m submitting a real-life, everyday analogy to compare to the payment methodology in health care that we call reference based pricing. One of my favorite videos that makes this question real is the one my Mitigate Partners colleagues Carl Schuessler and Dennis Hartin used when we recorded some of our own commentary on the subject. It portrays what it would be like if we bought groceries the same way we bought health care. It can be a controversial subject, although I don’t fall on the side of the detractors. I simply look at the same factors I consider when I’m standing in the grocery store aisles: quality, accessibility and whether or not the ultimate goal is accomplished. So, let’s explore these considerations.
When you consider quality in health care, it’s easy to be influenced by shiny objects like marketing, advertising and the familiarity of brand names. Umm, sounds a lot like shopping for anything else, right? I hope you’re seeing the connection here. The question you should be asking yourself right now is, “Why should I shop for health care any differently than I shop for anything else?” I would never choose a low-quality product of any kind, so finding high quality in health care is important to me. How do I find high quality? This is where most employees need proper education on the reality of PPO networks. They’re not all they’re cracked up to be. Remember the old saying, “What do they call the person who graduated last in their class in medical school? Doctor!” How do you know which doctors in the PPO network directory your big insurance carrier gave you are the high-quality doctors? Well, you don’t know. And good luck finding out. This is where it’s important to have a health plan designed specifically so that you can go to the doctor of your choice. No networks, no restrictions, no gimmicks. Most great advisors know where to go to find the highest quality doctor in an area who performs the procedure with the highest quality and the best outcomes. The magic really comes from frequency. How many times per year does that doctor perform that procedure? Of course, there’s more to it, but let’s move on.
Accessibility is the most obvious next factor to consider. I’ve already established that PPO networks cannot guarantee quality. They can’t suggest the best quality, so they don’t even track it. That would violate the contracts they have with all the doctors in their network. So, why be handcuffed by a PPO network in the first place? The emergence of free-standing, ambulatory surgery centers that accept cash for procedures is a promising trend when looking for accessible, high quality procedures and the physicians who perform those better than anyone else in your area. Usually, when an advisor and an employer have collaborated to design and build a high performing health plan, the plan identifies quality and then goes directly to that vetted doctor to ask the question, “Would you do this procedure and how much would you accept if we could pay cash upfront?” That question is a game changer. This is not breaking news, but doctors don’t like having to chase around insurance companies just to get paid. If you can leave that nonsense out of the conversation, the price of what you’re asking for usually comes way down.
The procedure is bought, the outcome is better, the bank account isn’t emptied, and you’re back on your feet in no time. Sounds like the ultimate goal was achieved. While navigating products in the grocery store aisles, the glam of the big box grocery store is less important when I realize I’m only spending about one third of the money I used to spend. I would never buy into a plan that limited the stores where I could shop, especially when the unit price of the products on the shelf are higher. So, why would I do that with health care?
The best part of this story is that with the leftover money from shopping smarter and saving, we can afford to patronize our local restaurant scene. Ah! You mean I can still fill bellies with healthy food and I don’t have to do the cooking? That’s a winner every time. “Excuse me, may I see the wine list?”