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Cutting Deductibles and Promoting Benefits Equity — Featuring Kim Eckelbarger of Tropical Benefits

‍We welcome Kim Eckelbarger of Tropical Benefits to the Paytient Podcast to discuss direct contracting, reference-based pricing, collections issues for hospitals, and the trouble with wellness incentives.

Cutting Deductibles and Promoting Benefits Equity — Featuring Kim Eckelbarger of Tropical Benefits

In the latest episode of the Paytient Podcast, we’re discussing everything from baby manatees to equity in benefits packages with Kim Eckelbarger.

Kim is the founder of Tropical Benefits, an independent consulting agency that specializes in employer benefits such as medical insurance, retirement plans, executive packages, and strategies for aging workforces. Kim is passionate about reducing benefit costs for her clients, and she was recognized for her ingenuity and personal service when she was named a finalist for the 2022 BenefitsPRO Broker of the Year Award.

Here are a few highlights from our conversation:

Lowering costs through direct contracting

“When our clients come in, it's definitely a partnership. […] We have direct contracts with doctors, with imaging centers, with hospital facilities. We built plans that are completely no cost to the frontline employees because those relationships are solid. My employers pay a fair rate to the hospitals and they pay quickly, so that's something I'm really proud of. We keep tweaking it all the time; it's never perfect, but it's definitely better than off-the-shelf.”

Collections issues for hospitals

“Several years ago, I'm sitting at a dinner with a group of like-minded employers that are in a coalition together. And there's the CEO of a small hospital in Florida. And I'm like, ‘What's your biggest challenge running a hospital?’ And it’s collections. He spends at least $0.40 of every dollar trying to collect that money.

“I was like, ‘Well, would you ever consider reference-based pricing?’ ‘Absolutely not.’ ‘Okay, well, if we paid you two and a half times Medicare and paid you within seven days, would you would that work for you?’ ‘Yes, I would work for me all day long.’ So it teaches you some things: You've got to frame it so that they understand it. But [getting paid the member part] is a big problem for hospitals.”

The balance behind low deductibles and copays

“We set that expectation from day one. If you want to go into that world with us, I will only do it for employers that are willing to give back to the front line. That's how we've been able to move employers to zero-deductible plans. We always leave a little bit of a copay in for things like imaging and the ER just because [...] I don’t want multiple pictures and I don't want people using the ER for primary care. So we leave a small copay there, but we can eliminate everything else when we have agreements in place.”

A more holistic approach to advising

“As an advisor, I always see my role as helping the people who enrolled in the plans. It never occurred to me that the population that doesn't enroll in the plan is something that I need to be helping as well. And so I got to see different perspectives from different kinds of healthcare professionals in the industry. And when you look at that and you talk to employers, you get a whole different viewpoint.”

The trouble with wellness incentives

“Some of these fully insured contracts sometimes will come with these wellness incentives that people can jump through hoops to earn points, to win a Fitbit, to do whatever. If you contrast that with a single mom who's trying to raise kids and get to work, and you don't allow for them to have time to participate in those kinds of programs at work, that's ridiculous. [...] They're trying to keep a roof over their heads. Most people are paycheck to paycheck. So you have to think about what is it that I'm asking my employees to do — and is it really a benefit?

“What do people really need? They don't need a Fitbit. They need to be able to access care. They need to know where resources and food banks are. They need to know that there’s this free clinic that will give them all these different items because they can't afford to contribute anything toward their premiums.”

Listen to the full discussion via the podcast player below or by clicking this link. If you'd like to connect with Kim or Tropical Benefits, you can find them on LinkedIn, Facebook, and at TropicalBenefits.com.

Healthcare Equity
The Business of Healthcare
Employee Benefits
Financial Wellness
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