A local start-up is changing the way self-insured employers work with health-care providers to offer coverage for their employees.
The Zero Card is a transparent medical network — meaning patients can see and compare the costs of care in advance — that gives employers access to cash-based prices with health-care providers while the employees get health services with no out-of-pocket costs.
“Providers want cash business like everybody else. This is all about access. Employers want access to a cash market, and hospitals want access to cash payers,” said Jim Millaway, co-founder of the Zero Card. “Employees win in the end because as long as they use their Zero Card they get hundreds of surgical procedures and health-care services for zero dollars, no copays, no deductibles.”
Dr. Stan Schwartz, chief science officer with the company, said the system allows employers and employees to save money because the services are purchased for cash, which cuts out a lot of paperwork and allows physicians to be physicians instead of also having to serve as accountant, collection agency and claims filer.
“We’ve developed a new ecosystem for health care with employer, employee and doctor. When you stop and think about it, what value does the rest of the health-care system add to that?” Schwartz said.
Millaway said that at its core, the Zero Card works because it’s a cash-based service where medical bills are paid once a week from employer to hospital.
“This takes an unknown, super-long payment cycle and makes it absolutely certain, and condenses it to four or five days,” he said.
Using the cash-based approach moves health-care providers to create set prices based on competition.
“There’s never been a market price in medicine. What you pay for a CT scan or MRI scan has almost no relation to what it costs the provider to do it and make a profit. The prices have all been determined on what they can negotiate,” Schwartz said.
“We let the doctors set their own prices because they know that unless the price is fair, this system doesn’t work.”
The resulting prices are about half of what insurance companies charge, Schwartz added.
Zero Card members can use their computer or mobile app to look at the actual cost of procedures and choose a provider based on cost and reputation.
“There’s no reason to go from one part of town where an MRI costs $750 and then go five miles away and it costs $3,000,” Schwartz said.
The Zero Card started in November of 2014. In its first year it has 12 self-insured clients and health-care providers across the country that are on board, including the St. John Health System.
“I believe that health systems like St. John need to do whatever they can to lower the costs of health care, and I think that population health is a reality that is coming,” said David Pynn, St. John Health System CEO.
That means moving toward population health and value-based pay models, and away from the traditional fee-for-service model.
“While we still need to do what we can to make money in a fee-for-service environment, we’ve done what we can to take our foot out of that bucket and be innovative where we can to lower costs,” he said. “I think moving forward, we feel we’ll have the best product to sell and we’ve done that through innovate projects.”
Pynn added that the trajectory of health-care costs and the rate at which they are increasing are not sustainable for employers or employees.
“I don’t think higher deductibles and shifting costs to employees is the answer,” he said.
For more information, go online to thezerocard.com.