Health care costs continue to rise, bringing about new challenges for funding care. Over the past 30 years, companies have responded to sustained health care cost pressures by adopting a number of significant changes to their employee benefits. In the 1970’s and 1980’s, for example, many employers moved away from indemnity plans toward health maintenance organizations (HMOs) and preferred provider organizations (PPOs).   

More recently, some employers have adopted high-deductible health plans. Each shift resulted in changes to employee health benefits that were once thought improbable.  

Cost pressures on employers continue. After relatively slow growth in health care cost inflation between 2008 and 2013, national health spending began to increase more rapidly and is projected to continue to rise by more than 5% per year through 2024. Following the COVID-19 Pandemic, the increase is projected to rise by more than 30%.

Cost containment measures continue to be applied to employer-sponsored plans. Annual maximums, higher deductibles, and larger co-payments result in a shift of fiscal responsibility to the patient.   

Providers are also experiencing the shift as they are contracted into networks by privately run administrations representing the employer. Providers are having to compromise the standards of care to meet restrictions imposed on them by these delivery of care models. This type of managed care is not regulated as it breeds some inherent issues.

Working under the radar of the provider’s regulatory bodies, the onus is on the providers to use caution when entering into these contractual agreements. These arrangements facilitate price collusion and have compulsory directives regarding the practice of health care as they dictate the manner of health care treatment being performed by the provider. The choice of what treatment is to be rendered does not remain exclusively in the professional discretion of the provider in consultation with and subject to the consent of the patient.  

These invasive practices of financially incentified delivery of care models by third-party administrators representing contracted payers are now being reformed away from common ownership to a not-for-profit care model. These delivery of care models are being put under a governance model utilizing a schedule of services under RBP and suggested program guidelines under the CMCA proprietary network of health care providers, managed by FCB.