What is a futures/forwards market?

A futures/forwards market is a place where buyers and sellers come together and agree on a price for a good/service at some future date and location. USHFx buyers and sellers are employers and hospitals or related parties. On offer are healthcare services.

What problems do they solve?

For the seller, they establish the price they will receive for the product they are producing. For the buyer, they establish the price they will have to pay for the product they will be consuming. As a result, profits and predictability are improved for both buyer and seller. This will also be true for employers and hospitals trading on USHFx.

What does USHFx do?

USHFx is a place where employers and hospitals come together and agree on a price for healthcare services that will be delivered at some future date and location. We do this by offering bundled payment contracts for trading on an electronic platform. USHFx is putting all of this together, to make healthcare services available freely and fairly in an open marketplace.

What are Tradable Bundled Payment Contracts?

TBPCs are increasingly standardized contracts for healthcare services that cover an entire episode of care including pre-op, op, and post-op services plus a warranty. An example is something as simple as: 1 total knee replacement for March delivery in Boston. They are written to define a standard of care, adjust for major complications and co-morbidities, apply to an individual or population, cover an entire episode or period, and specify outcomes. TBPCs are equivalent to futures/forwards contracts, you can think of these interchangeably.

How does your electronic platform work?

USHFx operates an electronic platform as a vehicle to facilitate trading. It posts contracts and prices, matches buyers and sellers, and completes the transactions. It is highly reliable and scalable.

How will USHFx evolve?

We expect the evolution of USHFx to be similar to traditional contract markets. Initially bilateral agreements are offered—which are the existing bundled payment contracts the healthcare industry is familiar with-- then they are made assignable which allows them to be traded, then they are standardized so they can be traded in volume, then they are cleared which means the credit risk is removed, and lastly conventional futures contracts are traded.

How can I learn more?

Please contact us.