This employer uses reference-based pricing to close the gender healthcare gap

Still looking for a new year’s resolution? How about making sure the women in your workforce aren’t paying too much for their healthcare?

Women who receive insurance through their employer pay an estimated $15 billion more each year for out-of-pocket medical costs than men, according to Deloitte data—but for about $133 per employee per year, employers, Deloitte suggests, may be able to help close the gap.

The gender healthcare gap “is not attributable to any one thing,” Eileen Clark, CHRO at Imagine360, a provider of full-service health plans, told HR Brew. “You can argue that there is a pay factor issue…and there is certainly enough data to show that women do require and take advantage of more [medical] procedures.”

Indeed, women pay $15 billion more in out of pocket medical costs than men, according to a recent Deloitte report. This issue of women paying more than men for healthcare, as well as other goods and services, has been dubbed “The Pink Tax.”

“On average, female employees under single coverage incur approximately $266 more in annual out-of-pocket costs than their male counterparts,” Deloitte writes. “This gender-based financial challenge highlights the need for businesses to scrutinize benefit coverage to make healthcare more affordable for female employees.”

Imagine360, where, according to Clark, the workforce is 79% women, uses a reference-based pricing (RBP) model to make sure employees don’t pay too much for healthcare.

Employers may want to take steps that include reevaluating benefits coverage to understand the separate financial impact of their offered healthcare services on the men, women, and nonbinary employees with your organization, Deloitte notes.

Creating change. RBP is an alternative to traditional insurance models, according to the American Hospital Association. Under this model, employers, with the help of a third-party administrator—like Imagine360— negotiate with providers, rather than dealing with traditional insurers, and pay a set price for each healthcare service.

RBPs could help cut employees’ healthcare costs by 20% to 30%, data from Conner, Strong, and Buckelew, an insurance brokerage and consulting firm, suggests.

Case study. Imagine360 began using an RBP model in 2018. Since then, it has helped its employees find quality care that is aligned with the employees’ healthcare needs.

In one example Clark relayed, one of Imagine360’s female employees who lives in a rural area did not have access to a treatment she needed. Clark said the company flew her to the University of Pennsylvania Health System, which is part of the organization’s provider network, allowing her to get better quality care at a more reasonable cost.

“We look to see where the needs are coming from and make sure that our plan is providing good options both from a cost perspective and from an accessibility perspective,” Clark said. “[There] are some very unique situations that women have to face.”