The employers had no way of ascertaining what they were paying for which led to

The employers had no way of ascertaining what they

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since they were indirectly responsible for the healthcare costs reimbursements. The employers had no way of ascertaining what they were paying for, which led to heavy expenditures on health care for their employees. For instance, in the mid-2000s, the health benefit expenditure for Safeway was almost $1 billion compared to its after-tax income of $600 million.Lack of informational transparency further curtailed the ability of employers to lower the reimbursement rates. The agreements between care providers and payers were almost all the times confidential and there was no way to connect quality care and reimbursement. The rates could not go down because the lack of transparency limited the amount of competition between care providers which could have ensured a variety, where the consumers would choose. The unavailability of transparency also led to disparities and healthcare pricing variances. For instance, in 2013 the cost of a knee arthroplasty was between $3000 and $29000, while the cost of colonoscopy ranged from $900 and $7200 in San Francisco. Such price ranges did not guarantee that the provider will charge on the lower, he could as well charge on the higher meaning that the employers would have to pay more for a service they would have paid for less in the presence of information transparency.
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Surname 3The significance of resource wastage in employees' health care program benefits cannot be understated. Referring to the amount Safeway spent on its employees', current and retired, saving health-related costs greatly affected a company's financial position and health. Research by Thomson Reuters found that self-insured employers with 20,000 workers and faced the 6.1% median trend for health care costs could save utmost $6.8 million within threeyears in the presence of information transparency between healthcare providers, payers, and consumers.Solving this wastage by using the tools of transparency also had a positive impact on employees which included increasing their satisfaction as well as performance. Transparency helped reduce healthcare costs while at the same time maintained and improved the quality ofhealthcare. According to Thomas Reuters, when transparency in place, consumers with private employer-sponsored insurance covers also could save up to $36 billion within three years. Their employers used such savings to improve the quality of care for their employees. For example, by using Castlight's transparency tools, Esterline manufacturing company reported nearly a 33% reduction in its employees’ medical costs. The Top Portion of the Lean Value Canvas (No Revenues or Costs) For Castlight’s New ProductThe top portion of the lean value canvas includes six stages, that is, the problem and customersegments stage, unique value proposition stage, solution stage, channels stage, key metrics stage, and unfair advantage stage.
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  • Spring '17
  • charles
  • Health care in the United States, Castlight

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