Below is our recent interview with Ryan Day, President at HST:
Q: Could you provide our readers with a brief introduction to HST?
A: HST is a technology company that provides Value-Based Payments (VBP) health plans to self-funded employers. About fifteen years ago, the health insurance industry introduced a concept called Reference-Based Pricing (RBP) that utilized healthcare provider cost data primarily from Medicare to establish fair and reasonable payments. HST was a pioneer in this industry and has evolved and improved the RBP concept into the next generation which we call Value-Based Payments (VBP) plans. Our VBP plans utilize cost information and combines it with quality information for plan members and patients to select medical care appropriate for them based on easily accessible comparison data. This empowers our members to make informed medical decisions.
The cost for medical care today is arbitrary and difficult to access, particularly prior to services being provided. We have taken medical cost datasets from Medicare and other sources along with proprietary data to establish cost by procedure and facility to establish a fair price for services. Self-funded employers utilize our services to create a Value-Based Payments plan for their employees and dependents.
Q: Why do you want to change the way we purchase healthcare?
A: The current system is badly broken for a number of reasons. Access to data to allow members/patience to make appropriate buying decisions is a significant issue.
Q: What’s wrong with the current system we have today?
A: When an individual needs medical care, it is very difficult to know what the cost is and which providers are the best. Traditional health plans have contracts with providers that apply a discount. The problem is the amount that is billed for any service is often arbitrary, not only from provider-to-provider or facility-to-facility, but in many instances, the same service provided by the same physician in the same facility on the same day for two different patients can have two different billed amounts. Sometimes those differences are intentional, but many times they are just arbitrary. Further, the billed amount is generally five to fifteen times more than the cost for those services. In the traditional and current model, 40% off a billed amount that is ten times the provider’s cost makes no sense. Our system today does not work for all the participants, particularly the patients and providers.
Q: What are the benefits for employers?
A: Reduced cost for both employers and their members generally 20 to 30%. An employer that has 100 employees participating in their health plan will likely have claims expenses of at least one million dollars. HST’s VBP plans typically reduce those costs of $200,000 to $300,000.
Lack of pricing transparency is what makes controlling health care costs a big challenge for employers. How can employers budget health plan expenses when PPO discounts offered are confidential? An additional benefit to our VBP health plans it allows employers the ability to budget and account for actual plan costs over time.
Q: What are the company’s plans and goals for the future?
A: HST has had a history of continuous development and improvement of our technology and services. We are working hard today to keep improving all aspects of our business to allow our members and patients to be able to select medical care that is appropriate for them based on both cost and quality. We want to make healthcare easy to navigate and rational through information. Our customers have rewarded us with 96.7% retention rates of our existing business and significant year over year growth.