Lowering Healthcare Costs for Self-Funded Employers: Analyzing the HSM Model

Health payers are burdened with rising health care costs as health care spending has increased dramatically over the past decade. According to the most recent Kaiser Family Foundation (KFF) Employer Health Benefits Survey, the annual deductible for individual coverage has increased more than 60% over the past decade, rising from $1,097 in 2012 to $1,763 in 2022. Similarly, average coverage premiums families have been there. an increase of 24% within the same period.

Many consumers and health payers have become so burdened by the burden of health care costs that many employees are avoiding or postponing recommended treatments or tests so as not to fall deeper into debt. According to the KFF Healthcare Debt Survey, the enormous financial costs of care have pushed more than 70% of adults into debt from cancer treatment, and 25% have declared bankruptcy.

Health payers are no longer comfortable with the current state of US health care and are exploring new solutions to reduce health care spending without compromising the quality of care and treatment outcomes. One such solution is to contract care with international providers who offer first-class care at a fraction of US costs.

HSM Solutions, a nearly eight-year-old privately owned firm that specializes in manufacturing bedding, furniture, transportation and other markets, is a good example of a self-funded employer that has taken control of its healthcare spending through direct contracts with . world-class centers of excellence abroad, offering treatment at prices that reach more than half the cost in the US

In a webinar with Jonathan Edelheit, Chairman and Co-Founder of Global Healthcare Resources and Medica Tourism Association, Tim Isenhower, Director of Benefits at HSM, talks about how HSM began exploring medical tourism as a solution to provide access to quality, yet affordable. healthcare offerings to their thousands of employees and how this impacted their workforce health metrics.

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HSM launched the contract program directly in 2007 with medical centers and clinics in various parts of the world, including India and Costa Rica, some of which were affiliated with global centers of excellence in the United States and other advanced countries. These hospitals, according to Tim, were some of the best hospitals in those countries, but they offered high quality treatment, comparable to what is offered in the US, at a fraction of US costs.

For Tim, reducing costs meant significantly improving patient outcomes.

“The first thing we saw was the misdiagnosed cases and procedures we were paying for in the US,” Tim said. “I remember a woman we sent from Mississippi to India for weight loss surgery that was recommended here in the US; but when she got to India, the doctors were very thorough, ran several tests, and discovered that she had a pituitary tumor that caused the weight gain. So, they didn’t do the weight loss surgery, but they removed the pituitary tumor and her symptoms went away”

“We then offered a second opinion package to any employees who had surgery to consult with these doctors in India for an evaluation, and what we found was for a gentleman who had a hip replacement All he needed was for the doctors in India to review his records and make a few orders. further checks, it was found that the hip problem was coming from the spine,” said Tim.

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Over time, employees embraced the program as these positives took hold and employees were finding that they might not need surgery at all or that they might need another surgery to restore health than the one originally recommended by US doctors. And, as Tim says, these programs came at zero cost to employees compared to paying up to $5,000 out of pocket for the same procedure in the US.

Ultimately, cost savings on health care spending increased as more people recorded employee buy-in, amounting to millions of dollars per year. According to Tim, since 2011, when the direct contracting program had been in operation for only 3-4 years, the company had recorded savings of over $11 million.

“We had a gentleman last week who had a prescription for infusion therapy for Multiple Sclerosis. When we took him in, he had his first infusion in North Carolina for $198,000, his second session was due in July but we were able to get him to the Cayman Islands and he had that infusion for $26,000,” said Tim .

“For example, these surgical replacements are very expensive here in the United States, we found that if you do these replacement surgeries or back surgeries in the Cayman Islands or Costa Rica compared to the U.S., you save hundreds of thousands of dollars, “Tim. explained. He also noted that the company saves $20,000 to $30,000 on each knee or hip replacement performed in these overseas hospitals.

Tim also noted that even with payments for lodging, transportation, and tourist activities for employees and their traveling companions, the company does not pay as much as it would in the United States. Promoting care in these countries that offer great tourism and recreational opportunities for patients and their companions is also an incentive for employees to opt for these programs and improve treatment outcomes and promote early recovery .

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Duplicating this program in other organizations may face similar challenges, including employee reluctance, misinformation from the media, and lack of cooperation from local hospitals and health care providers, some of which Tim mentioned. However, employers must take their time to do their due diligence, network with the right medical travel facilitators, and provide the right education to their employees about the benefits of receiving care in medical travel hubs around the world.

Global Healthcare Accreditation (GHA) helps businesses reshape their healthcare offerings to optimize care while lowering costs. GHA works with and has received accreditation from some of the best international hospitals in the world, including Asan Medical Center in Korea, Bumrungrad International Hospital in Thailand, and My Spine Center of Clinica Santa Clarita in Mexico, which offer programs strong international patient care.

GHA remains a key stakeholder in the medical travel ecosystem and is also committed to offering solutions that promote employee health and wellness. Through certification and accreditation programs, GHA raises the bar in the system, ensuring that health care is safe and first-class for health payers. GHA gives businesses access to the tools, resources and partnerships they need to transform employee healthcare packages, connect them with leaders and key stakeholders in medical travel, and provide them with the right solutions to meet health needs employed at affordable costs.

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