The largest source of friction between healthcare providers and healthcare insurers is the process of reimbursing legitimate healthcare services. It is expensive, time consuming and often illogical or obtuse. Every surgeon and hospital have stories.
Which brings us to the health insurer’s Achilles heel.
Employer contracts.
Employers like Amazon, Berkshire Hathaway, JP Morgan, Home Depot, Boeing and Wal-Mart.
Employers Cutting Out the Insurance Middleman
Remember the golden rule? He who has the gold, rules.
If Wal-Mart were a country, it would be the 25th largest in the world. In terms of revenues, it is 4 times larger than UnitedHealthcare. It is 36% larger than all five of the largest healthcare insurers combined.
In terms of employees, Wal-Mart is 13 times larger than the largest healthcare insurer—UnitedHealthcare. With 2.2 million employees, Wal-Mart has bargaining power.
A couple years ago Wal-Mart, in collaboration with Home Depot, started to use it.
The two companies put in place a program that offered a hip or knee replacement surgery, plus transportation for the employee and one other person to and from the hospital, plus hotel rooms and food at no charge if they used one of three designated hospitals for their surgery.
No Aetna, Anthem, Humana or United required.
In 2014, Boeing and some of the hospitals in the Seattle/Puget Sound area teamed up to provide healthcare services—also without the benefit of a health insurer in the middle. The mechanism Boeing used to make this happen is the new system of accountable care organizations, or ACOs.
Under the program, Boeing negotiated its own healthcare service contracts with ACOs in the Puget Sound-area. Their employees started using these providers in 2015. The three ACOS were set up by University of Washington Hospitals, Providence Health and Swedish Heath Services.
When interviewed by the Seattle newspaper about this arrangement, Dr. Elliott Fisher, Director of the Dartmouth Institute for Health Policy and Clinical Practice said: “The advantage for Boeing will be that they can take the middle man out of the equation between the patients and the health system. It may be able to reduce cost, in part because of the simplification of not having the insurance mechanism in the middle.”
