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Harvard Business Review

Negotiating Lower Hospital Prices as a Self-Insured Employer

Harvard Business Review recently published insight featuring Keith Ericson, Associate Professor in Markets, Public Policy, and Law, discussing how employers can save money on insurance plans by following 3 simple steps.

Keith Ericson

Published

on

May 3, 2022

Harvard Business Review recently published insight featuring Keith Ericson, Associate Professor in Markets, Public Policy, and Law, discussing how employers can save money on insurance plans by following 3 simple steps.

As a first step, Keith recommends comparing full insurance plan costs instead of just premium and administrative fees. By determining the prices based on hospitals where your employees visit, you can get a more accurate picture of how much you will have to pay.

Keith also advises employers to pay attention to each plan’s network. Because most insurers offer different plans with negotiated procedure prices varying throughout, he stresses the importance of finding the one most pertinent to your company. Lastly, Keith recommended employers consider a fully insured plan since they can often be cheaper, and the insurers are the ones dealing with the risk. As he puts it, “Analyzing these hidden health procedure prices can take work but save employers money and provide a better deal for their employees.”

Keith M. Marzilli Ericson is an Associate Professor of Markets, Public Policy, and Law at the Boston University Questrom School of Business, and a Faculty Research Fellow at the National Bureau of Economic Research, and co-editor of the Journal of Public Economics and the American Journal of Health Economics. Professor Ericson’s research has examined health care markets, such as the Massachusetts Health Insurance Exchange and Medicare Part D.