After speaking at a portfolio company event hosted by Thomas H. Lee, Dendy realized even some of the most sophisticated executives were unaware at some of the inflated costs in the healthcare system. He also works with Bain Capital portfolio companies.
Dendy said lower pricing obtained by preferred provider organizations (PPOs) may often be an illusion, because bills from healthcare providers are often inflated prior to any network discounts.
“You need to know that there is something you can do about these healthcare costs,” Dendy said. “If you don’t ask, you have no idea what you’re paying.”
Employing a team of doctors and weighing costs against Medicare payment rates, Advanced Medical Pricing searches for errors and sifts for savings. The company has found at least one instance where a hospital charged $1,000 for a tooth brush, he said.
Insurance companies may lack fiduciary oversight with their PPOs, which could result in hospital overcharges and other inflated costs.
All told, Advanced Medical Pricing has helped corporate clients book more than $200 million in annual cost savings since 2005, Dendy said. Advanced Medical Pricing often saves clients 8 percent to 30 percent on healthcare costs, he said.
“Private equity firms are interested in what we’re doing, since they want to help portfolio companies boost their profits before they sell them,” he said. “Sometimes private equity firms do some things that are painful. What we do is not painful.”
By Steve Gelsi