Recently, I met with an employer who was currently insured with one of the larger “Fully Insured” carriers and was spending over $2 million dollars for his medical employee benefits package for his 145 employees that were currently participating in his health program. He was very frustrated because his carrier keeps raising his rates year after year. He is a loyal guy and is adverse to change. He was introduced to me and I asked him several questions about his program, and much to my surprise, he did not have very flattering answers with regards to his current offering. In addition, he had received double digit increase 3 of the last 4 years.
People today are more open to change than they were 15-20 years ago. This employer was so frustrated as to his current situation, that he was willing to now listen to see what the market dictated. I told him that I could offer him a program, where he could customize the benefits any way that he wanted as long as he offered the mandated benefits that are required by law. I went onto explain, that as a medium sized employer he has just as much rights as the Fortune 500 companies. He was unaware of this. We then discussed alternative benefits like Acupuncture, Health club memberships, Smoking Cessation, just to name a few. This employer was devastated that his plan did not offer any of these options. Now he definitely wanted to see what a customizable plan would look like, In his eyes he felt that if he offered all these additional benefits on top of what his current offering is, the costs would be astronomical.
So the employer sent over all the data to quote this “Non-Traditional” plan. Much to this employers surprise, the costs were 25% less than what he was currently paying. Furthermore, he was getting all these extra benefits that his current plan did not offer. The plan had things built into the program that showed him how the cost was less and the benefits were greater. Basically, we unbundled his program. By going out and getting a network of doctors, utilizing a pharmacy benefit manager that offers rebates on all prescriptions, helped drive down the cost. We also contracted with a medical case manager who reviewed his claims and saw areas where there was fraud, abuse and neglect. In addition, we showed him statistical history of his account and that the utilization of his account coupled with discounts that we were able to obtain, offered him the cost savings he was looking to achieve. The real benefit was that he was able to offer more for less. In other words, having your cake and eating it too.
To summarize, many employers out there like the one in this example do not realize that “Non-Traditional” healthcare is not just for large employers, it is for almost all employers if you know how to navigate the system with the right advisor who is knowledgeable and can steer you in the right direction. This employer was able to save 25% and offer better benefits. This in turn helps him attract and retain good quality talent. If he wants to be a loyal guy like he has in the past, he can do so without getting burned, or taken advantage of by the traditional system.
