Commonwealth Fund: Purchasing alliances will help US employers curb healthcare costs


U.S. employers should form purchasing alliances as they seek to combat high healthcare prices and inefficiencies in the industry, according to a website post published by Harvard Business Review.

David Blumenthal, MD, Lovisa Gustafsson and Shawn Bishop, all from the Commonwealth Fund, a nonpartisan health policy research group, posted the opinion piece.

Four takeaways:

1. Employers, by themselves, lack the market leverage to get good prices or shape healthcare delivery, especially considering the consolidation taking place in the provider community, Commonwealth Fund representatives said. They argued purchasing alliances are a way for employers to join forces to get a better deal — lower prices and higher quality — for their employees' healthcare.

2. Employers have achieved success in limiting their exposure to growing healthcare costs, as they have experienced modest annual premium increases and steady healthcare spending in recent years, according to Commonwealth Fund representatives. They said it appears this is largely because of patients increasingly taking on more financial responsibility for their care with high-deductible health plans.

3. But Commonwealth Fund representatives said there is a problem now facing employers: "There seems growing nervousness … that they've pushed high deductibles about as far as they can. Workers' increasing out-of-pocket costs are creating widespread discontent with the underlying costs of care — a problem largely driven by the high prices charged to private payers for health services and pharmaceuticals."

They said an "increasingly competitive labor market" also plays a role.

4. With all of this in mind, employers will need to find new ways to curb healthcare costs, which may involve purchasing alliances, according to the Commonwealth Fund. They said such alliances allow employers to join forces to agree on similar health insurance products and work with local insurers to negotiate better prices from local physicians and healthcare organizations. Still, they point out that employers face challenges in their efforts to form alliances, such as antitrust laws and possibly lack of experience as healthcare purchasers.

Read the full post here


More articles on healthcare finance:

Viewpoint: Bundled payments are a simple way to end surprise billing
How states are dealing with surprise billing
For-profit hospital stock report: Week of Oct. 29-Nov. 2


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