In recent years, private-sector healthcare spending has continued to rise, according to the Employee Benefit Research Institute and the Center for Studying Health System Change. The trend for hospital outpatient costs outpaced spending growth for other types of healthcare services.

Such data on hospital cost trends has prompted employers and health plans to consider the cost savings that can be gained from steering covered employees to alternative care settings for certain types of services and procedures.

An analysis by First Health Group reported in Employee Benefit News showed a potential $300,000 savings for a 1,400-employee group, if half of the claims for five types of hospital outpatient services (radiology, pathology/lab, emergency room, surgery, and physical medicine) were shifted from a hospital to an alternate care site.

A number of common services and procedures can, in most cases, be conducted in a setting other than a hospital without compromising patient care. These include:

Planning Ahead
Before a need arises, people should locate nearby urgent care centers. It's a good idea to make a note of the phone numbers and operating hours so that the information is handy.

 Surgeries usually performed on an outpatient basis, such as tonsillectomies, cataract extractions, colonoscopies.

 Conditions that require urgent -- but not emergency -- care (for example, most sports injuries, a suspected ear infection that surfaces after-hours, a persistent condition usually treated in a doctor's office, but the wait for an appointment is too long).

 Imaging services (such as x-rays, MRIs, and mammograms); lab services; and renal dialysis.

Here are some of the alternative care sites:

Ambulatory surgery centers. These state-licensed facilities perform surgical procedures that do not require a hospital admission. According to a report by the Medicare Payment Advisory Commission, Medicare payment rates made to ambulatory surgery centers were lower than those made to hospital outpatient departments for 87 percent of procedures. While ambulatory surgery centers may not be appropriate for cases presenting an unusual risk of complications, for most patients needing outpatient surgery, they represent a safe, convenient, and cost-effective alternative to a trip to the hospital.

Urgent care centers. Hospital emergency room visits are up 20 percent over the past decade, according to data from the Centers for Disease Control and Prevention's National Hospital Ambulatory Medical Care Survey. Yet only 48 percent of the cases were classified as urgent or semi-urgent. Anyone who has visited an emergency room -- and seen the bill -- knows that ER services come at a very high price. Urgent care centers offer a cost-effective alternative for non-life-threatening situations that require prompt medical attention, but a visit to the doctor's office is not possible or practicable.

Freestanding imaging centers.

• Freestanding labs.

• Physical therapy clinics.

What your company can do: Communication efforts can be undertaken to inform employees about the advantages of appropriate alternatives to hospitals. Additionally, incentives -- such as a differentiated co-payments or coinsurance levels -- can be effective in encouraging employees to use alternate care sites. The educational component is important so that employees make their selections based on knowledge, rather than just cost considerations.

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