“After three decades in healthcare, I’ve seen the same disconnect play out repeatedly: employers are paying more than they should, and even when better options exist, they’re often ruled out before they’re fully understood.”
Jeff Bak, President and CEO at Imagine360, recently joined the Self-Funded podcast to discuss healthcare and alternative models that bring costs under control. The conversation surfaced eight realities about pricing and how perception continues to slow adoption of solutions that address affordability.
1. The system doesn’t start with a fair price
Most health plans don’t begin with a rational benchmark. They start with inflated charges and work backward through discounts, creating the appearance of savings without addressing the underlying price. Reference-based pricing (RBP) uses a known anchor—typically Medicare—and builds from there. Starting from a grounded number creates clarity and makes pricing easier to understand, defend and manage.
2. Employers are often paying 2–3x a rational rate
In many markets, employers are paying 250% to 330% of Medicare prices for the same healthcare services. That price point and variation makes it difficult to connect to quality or outcomes. Most employers don’t see how far they’ve drifted from a reasonable baseline until it’s surfaced, at which point the evaluation of cost changes quickly.
4. Lack of visibility keeps costs elevated
Most employers lack a clear view into what they’re paying or why prices vary so widely. The same procedure can carry dramatically different price tags within the same market, often without meaningful quality differences. That variation remains hidden in traditional models, making it difficult to question or manage. RBP introduces transparency many employers have never had.
5. Employees are paying more, but accessing less care
Cost-sharing has increased through higher deductibles and contributions, but access hasn’t improved. For many employees, especially in lower-margin industries, coverage exists but remains difficult to use. Care is delayed or avoided, reflecting how plans are structured and how costs are distributed.
6. Perception is the biggest barrier to adoption
There are still many misconceptions around RBP. For example, a broker survey found that only 3% could correctly identify common RBP benchmarks in savings, access, and billing issues. In fact, billing and access risks were overestimated by nearly 10x. Those concerns typically stem from outdated models or secondhand experience. In practice, after seeing Imagine360 offers approximately 20% savings and has less than 3% billing issues, over 90% said they would recommend RBP.
7. Change management is required, but it stabilizes quickly
Any meaningful shift requires adjustment. The first year calls for more communication, stronger HR support and clear expectations for employees. While unfamiliar at first, the model stabilizes quickly as teams gain experience. By the second year, most early uncertainty is gone while the financial impact remains.
The bottom line
The data is clear, and the results are consistent.
Adoption moves more slowly due to hesitation, past experience and uncertainty around implementation. Once employers work through those concerns and see how an alternative health plan like Imagine360 performs, it changes how they evaluate healthcare decisions.
The impact extends beyond cost reduction. It introduces discipline into pricing and gives employers a more predictable way to manage one of their largest and fastest-growing expenses.
Don’t miss Jeff Bak’s full episode of Self-Funded with Spencer Smith here.
