DRC_Kelli Keen

Kelli Keen

Last week, President Trump issued a new rule that could cut American health care prices in half. I attended the White House signing event because my company, the Denton-based beer distributor Fisher59, has firsthand knowledge of the rule’s potential.

The rule requires health care providers to publish the secret, negotiated rates they offer insurers. Knowing these discounted rates is key to reducing health care prices because they allow patients and employers to price-shop and identify the lowest price for quality care.

As millions of patients have found out the hard way, hidden health care prices have contributed to significant surprise medical bills, financial hardship and personal bankruptcies. Unknown costs make going to the hospital a terrifying experience because patients don’t know what they will be charged until after they get their bills weeks later in the mail.

By understanding the cash prices for health care, patients can find the best quality care for the lowest price with the peace of mind that their health care won’t result in financial ruin. Vanderbilt economist Larry Van Horn estimates that cash prices are 40% cheaper than insurers’ negotiated rates.

This rule is especially exciting for self-insured employers like Fisher59, which has 275 employees and had faced double-digit health care cost increases for years. Small businesses like ours have been among the biggest victims of rising health care costs, which now exceed $20,500 per employee nationally — a 54% increase since 2009. Surveys of small businesses consistently find that health care costs are the biggest operational challenge year after year.

The rule will finally offer employers, who provide health coverage for 181 million Americans, real cost relief because it will allow them to conduct cost-benefit analyses among competing health care plans. Currently, they’re flying blind, not knowing their health care costs until after they’re billed.

I can speak from personal experience about the cost-cutting promise of transparent prices as an early adopter. Fisher59 has incentivized our employees to forgo traditional pricing providers and insurers in favor of contracting directly with health centers that publish clear prices such as the Texas Free Market Surgery center and the Surgery Center of Oklahoma.

This move has reduced my company’s health care costs by roughly 50% over the past few years. We can look at four procedures alone that saved the company over $100,000. For instance, one employee received a knee replacement at a preferred surgery center for $20,567 yet was quoted $70,791 from a local hospital for the same procedure. Another employee had an eye surgery for $11,836 that would have cost $25,000 at the hospital.

Our employees save as much as the business. Because this model allows us to steer employees to price transparent imaging and surgical centers, there are no costly insurance copays, coinsurance and deductibles with which to contend. We pay for our employees’ travel and lodging costs and even give them cash bonuses as a share of our savings. There is no additional work for our human resources staff as these services are managed by our third-party broker, BevCap Management

This model provides real benefits to employees — unlike the status quo where many companies have what amount to health benefits in name only because the costs to access them are so great. Employee deductibles for average employer-provided plans have doubled over the last decade. One of our employees had been putting off a needed health care procedure under our previous arrangement because the associated out-of-pocket costs were so high.

We are also investing our health care savings back into our employees in the form of higher pay and better fringe benefits.

Joining me at the White House signing ceremony were numerous other enterprising businesses from across the country, including H.B. Global in Pennsylvania, which are already pursuing health care price transparency and reaping the rewards.

Transparent pricing providers such as Dr. Rick Schultz of Texas Free Market Surgery also attended the event, highlighting how — contrary to the medical establishment’s claims — transparent pricing is possible. “If you don’t believe me,” said Dr. Schultz, “just look at our website.”

Last week’s rule will accelerate this trend because it will make it much easier for human resources departments like mine to compare alternatives. The only losers will be the rapidly consolidating health care establishment that has benefited from these hidden prices for decades.

KELLI KEEN is the head of human resources at Fisher59.

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