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How Can ASCs Take Advantage of Self-Insured Employers? Q&A With Tom Johnston

Tom JohnstonEmployerDirect CEO Tom D. Johnston, JD, discusses trends in the self-insured employer market and how ambulatory surgery centers can take advantage of opportunities to serve their patients today. EmployerDirect provides a supplemental healthcare benefit for employers that directs planned medical procedures to high quality providers, and directs 85 percent of members to care in ambulatory surgery centers. It's estimated that currently around 150 million people have coverage from self-insured employers.

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Q: What opportunities are available for ASCs in the self-insured employer arena? How can ASCs take advantage of those opportunities?


Tom Johnston: We see a lot of ambulatory surgery centers taking advantage of self-insured employers when they are part of large chains, such as centers managed by Symbion on United Surgical Partners International. These companies have surgery centers across the country. It's harder for single surgery centers in one community because a lot of the large self-funded companies have employees spread across the country.

From our experience, employers are looking for a total solution for medical procedures. They wouldn't contract on an individual basis. Even those in a chain find it difficult to contract with self-funded employers on their own because someone has to manage those patients and explain to members the benefits of choosing the ASC.

We have coordinators in-house to direct members to our network of ASCs as a supplemental benefit to self-funded employers.

Q: How do you communicate those benefits to members?

TJ: We have emails and mailings to help members understand their benefits. When they call us to discuss a procedure we refer them to our ASCs or physicians. It can be difficult for ASCs to continue communicating with members all year unless the ASC has a call center. They might be better off in a network to direct patient calls to them.

Q: What does it take for an ASC to design a program catering to self-insured employers? How do they attract employees to their facility?

TJ: Surgery centers will likely need to develop a bundled rate for members. The physician and ASC services would have to be more transparent to the self-insured employers, who are looking for high-quality care at a low cost. They want to manage that versus going through the health plan, which isn't very transparent.

We negotiate the bundled rate for our centers. Since we work with networks across the country we have an idea of what the rates should be. About 85 percent of our cases are done in ASCs and we work with physicians to develop appealing rates. You can't just have rates that match the health plans; they have to be attractive to the self-funded employers.

Q: Some ASCs are concerned about negotiating bundled payment rates because then insurance companies will want the same, lower rates. Have you seen any difficulty there?

TJ: Our provider network is confidential and proprietary. We do not list our bundled rates anywhere. One of the concerns among our providers is once they give a lower bundled rate for our packages, the health plans will want the same rate. We keep our network and bundled rates proprietary and confidential so that doesn't happen.

Q: Why is working with self-insured employers beneficial for the ASC and healthcare systems?

TJ: It's better because you have direct access to the self-insured employers' members. When you work with a large self-funded employer, you have access to the patients that call for the bundled rates. A company like ours will direct patients to the physician and the ambulatory surgery center. We provide new volume to these centers and these are patients they wouldn't necessarily see if the ASC were just listed as one facility among several other options.

We also have a policy of paying the ASC within seven to 10 days of the procedure, so they don't have to worry about billing and collections. Self-funded employers are capable of paying more quickly.

Q: Are there any other advantages of working with self-insured employers?

TJ: It depends on the area of the country you are working in and how many large employers there are. The contract could make a big impact, especially if employers are willing to travel their patients 60 to 100 miles for a transparent cost bundle. This would add volume directly to the ASC.

Q: What are self-insured employers looking for in healthcare providers, particularly in ASCs, for contracts?

TJ: The self-funded employers are looking for high quality in addition to fair costs. It's not just about saving money by sending employees to the ASCs; the employers want to make sure they are sending their members to high quality facilities for treatment and then a quick recovery.

A trend in the future you'll see is ASCs providing outcomes data to show their quality. We require our centers to provide us with data so we can prove their quality as well as transparent costs.

Q: What trends do you see on the horizon for self-insured employers? Where do ASCs fit into the picture?

TJ: The self-insured employers are really looking for transparency around cost and quality. Their health costs are rising for employees and they are trying to figure out how to get their costs down but they don't want to do it by sending employees to low-quality providers.

The large employers are also incentivizing employees to be more consumer-driven. They are increasing their deductibles in order to get the members engaged in services they purchase. ASCs will be attractive to these employees because they are less expensive.

The market is huge right now and we actually think that could go down a little bit with some of the new legislation surrounding healthcare. Some of the employers may actually drop some of their health insurance for employees and we don't know for sure, but realistically if the market dropped by 10 million people there would still be 140 million people in the self-insured patient population.

More Articles on Surgery Centers:
5 Ways Single-Specialty ASCs Can Flourish for Physician Owners

Eliminate Bad Debt: 4 Steps for Ambulatory Surgery Centers

5 Surgery Center Joint Venture Models

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