Is this a familiar story?
Broker enters, 2 months or so until the renewal and says "your carrier awarded you with a 15% renewal increase, but we got them down to 7%". Of course it sounds amazing that the broker was able to cut the renewal in half, but is that all there is to the story? Some brokers would showcase that they reduced your renewal by 50%, but does that number really mean much?
When it comes down to it, without analyzing actionable data, we don't know if 7% is a fair offer. Chances are, even a 7% figure may be too high. Competing carriers may be willing to come in even lower than your renewal offer; imagine that. Your company can explore self-funded options and end up paying less than even the prior year! Prosperity Benefits oftentimes can 'rewind the clock' for new clients, setting their premiums at much lower levels. We then work to manage your costs going forward. Most times this is accomplished by analyzing data and introducing new initiatives that are not 'old hat' brokerage offerings.
Whether a company is fully-insured or self-funded, above 50 eligible employees that is, they end up paying for their claims in the premiums that are remitted to the carrier or dispersed from their claims fund. Ultimately, if a company has high claims, they will be forced to pay more and more each year. The only way to stop the cost bleed is to take charge of the situation through managing the population's health. What companies must do is identify the health trends within their group and actively work to reduce their risk profile by educating employees, modifying plan designs, cost-shifting, and introducing financial instruments to help employee out-of-pocket costs. Obtaining this data is the tricky part, but Prosperity Benefits has access to all client medical history information regardless of group size due to our established workflow and integrated technology. If an employer is an optimal fit for level or self-funding, we can clearly see that in working with the company in a transparent way. Enter population health management.
Population Health Management is not new, and yet many companies neglect to incorporate these concepts into their healthcare plans even though the long-term benefits are overwhelmingly positive. If a company can outperform trend when it comes to their healthcare spending, then they are ahead of their peers. Here are some basic tips:
- Create a Dedicated Team: Working with a Health and Welfare Consultant that is dedicated to the success of your program is critical, but so too is making sure you have appointed individuals to be the catalyst for change within your organization. These team members can work with your staff to create enthusiasm and encourage participation in healthcare consumerism and wellness.
- Analyze Your Data: Without credible data, it is almost impossible to improve upon your position. Working with a Consultant that has access to mining these data points and making sense of them is imperative.
- Making the Data Actionable: Once you recognize where your dollars are being excessively spent, it is possible to modify your plan to trim the waste where possible. Did you discover your generic fill rate is too low? Perhaps working to lower the copay for generics would be a wise approach.
- Think Long-Term: More data leads to more credibility, but it is important to also create a multi-year plan to implement changes to your program in such a way that they can be well-adopted by the staff. Companies that either put too many new initiatives to the workforce or dramatically change how their healthcare plan works can find that their efforts have a negative effect on the program. Focusing first on the most financially stressful areas of expense on your plan is a great place to begin.
In summary, a quote from Sherlock Holmes in the 1800's still rings true today: "It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts." Data is king, and unlocking it within your healthcare plan can be a quick process with the right Consultant partner.