Determining discounts

Healthcare reform has grabbed the headlines with various cost-saving initiatives for employers and individuals alike. However, the potential for significant savings is available without any required change to the current structure. Carriers who most successfully negotiate with providers can offer some employers significant cost savings with no modifications in their current utilization or provider access. The potential savings, or discounts, will vary based on the group’s mix of markets and services, so a medical repricing study can help quantify the differences.

This paper covers the most frequently asked questions about the calculation and evaluation of medical discounts, highlights various methods for estimating discount differences, and discusses how discount differences impact the overall medical cost to the employer.