Surgery Center of Oklahoma Blog

July 13, 2011

Self Insured

Filed under: Uncategorized — surgerycenterok @ 7:44 pm

What does this mean?  This means that a company is willing to take the risk of the expense of providing health care to its employees.  Rather than pay gigantic amounts of health insurance premiums, the company actually pays the bills.

We are self insured here at the Surgery Center of Oklahoma.  Our employees have a health savings account.  That means that the company gives them a certain amount of money at the beginning of the year and what they don’t spend they keep.  The employees love this.  The owners of the Surgery Center of Oklahoma love this.  How does it work so well?  The employees are incentivized to spend very little of the money in their account, that’s how.  They are incentivized to stay as healthy as they can in order to protect the balance of their account.  When a doctor  says, “you need this procedure or this drug,” our employees say….ready?….” much does it cost?”  Why would they ask such a question?  Because it’s their money!  Not uncommonly they will say,” well, I’m going to shop around.  That sounds kind of high to me.”  Not uncommonly the doctor hearing this concern over costs drops their price right there and then on the spot.

Why don’t more companies self insure?  Because it’s not the usual way of doing things.  Because people working in human resources departments are caught between a rock and a hard place.  Anything they do that’s good for the employees makes the owners uncomfortable and mad.  Anything they do that’s good for the owners of the company typically makes the employees angry.  Best to do nothing or next to nothing.  Find a comfortable groove and keep your head down.  Fight change at every turn.

This may change.  Health insurance companies have played this game with big hospitals for far too long.  ”It is simply not sustainable,” as one health insurance company executive told me recently.  I think we will see more and more self insured companies.  They will be shopping for quality and transparent pricing.  They will be looking for ways to incentivize their employees to feel ownership in the health plan.  They will cease doing business with the insurance companies that have raked them over the coals for years.  Fewer and fewer of their employees will go to the big hospitals for their care.   The Surgery Center of Oklahoma will be in a hiring frenzy due to the demand for our affordable high quality of care.

The sooner the better.

G. Keith Smith, M.D.

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  1. Great piece on the benefits of self-insured. I’d like to venture that you’re missing a piece though, a maybe unexpected piece. A concierge doctor to go with that self insured plan. Now, if you’re familiar with typical high price low value concierge doctors this may not jive. But i’d like to introduce you to my high value low cost concierge model, . We charge $10-100/mo/pt based only on age for unlimited home/work/office/technology visits and 24/7 access to your private physician. Futhermore we pass along our wholesale prices on labs and medications to ensure maximal savings.

    cbc $2
    cmp $4
    lipid panel $3
    TSH $4
    OB panel $22
    ESR $4
    a1c $6

    500 of protonix for $11
    $700 of zofran for $6
    $80 of zoloft for $2
    prednisone is so cheap we give

    furthermore, to add value to our memberships, ANY procedure we do in the office is free including ekg, spiro, full body dexa, laceration, lesion removal, biopsy, medical laser treatments ( ultrasound testing ( and more to come.

    different that what you’re used to? hope so.

    so take your self-funded plan and imagine paying $50/mo/pt (corporate rate) for every employee/spouse to incentivize the use of a doctor who has ALREADY shopped for the lowest possible rates on everything. Interesting?

    i’d love hear your thoughts, thanks for your time
    dr josh

    Comment by Dr Josh — July 21, 2011 @ 12:47 am

  2. I worry about the incentives with your plan. I am basically self insured with a 10K deductible for my own insurance. I am motivated to shop because it is my money. My physician is not motivated to ration or deny me care to save money that I would have pre-paid him in your plan. My high-deductible plan is self-managed…patient managed. Your plan is managed, top-down, if I’m not mistaken. I am afraid that you might meet the same issues that HMO’s have met and the main reason they failed: the “perceived price” of care approached close enough to “zero” (due to the prepayment concept) that demand was too high. As demand greatly increased, plans were motivated to ration in order to save themselves from bankruptcy. Help me understand if I’m wrong.
    G. Keith Smith, M.D.

    Comment by surgerycenterok — July 22, 2011 @ 3:24 am

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