Are you tired of the annual benefits dance?
This year’s renewal feels just like last year and three years ago as the same tactics have been implemented for over a decade. Status quo has boiled down to several things: shift employee costs, reduce benefits or limit access to care by offering narrow networks. Employers have been conditioned to believe that the best they can hope for is a "less bad" rate increase.
The C-Suite requests HR to provide health care budget projections for the upcoming plan year and the culture at many organizations is to simply preserve the status quo. Insurance carriers realize this and benefits brokers/consultants know the culture as well. The renewal is presented in a "spread sheet" at 9-12% and the broker/consultants “negotiate” a 6% increase which is then compared to national benchmarks of 7%. Check the box. Healthcare is renewed and see you next year. This passes as healthcare risk management for most organizations.
Misaligned Incentives
Most health insurance brokers get paid a commission based on a percentage of the premium paid. Brokers do not have a financial incentive to contain premium increases therefore the higher the health-care spend, the more commissions generated.
5 Pillars of Transformational Health Benefit Plans
Transparent Medical Markets
Our firm uses data and technology tools to assist employers in evaluating both the cost and quality of their provider networks, outpatient and inpatient facilities, and imaging and laboratory services. Proper use of these tools can assist payors in steering members to high-quality low-cost providers from their network resulting in better outcomes for the families they represent and lower cost structures for their plan.
Transparent Phamacy Benefits
Fully insured employer groups have ZERO control over the contract terms under which they pay for their prescription drug plan. This “Carved-In” arrangement serves as a profit center for both the Pharmacy Benefit Manager (PBM) and insurance carrier as rebate dollars, claims processes fees and other forms of remuneration often shared between the parties. These dollars are rightfully the property of the sponsoring employer but due to the fully insured arrangement they have no access to these dollars. Without control of the governing contract terms and full auditing rights employers will continue to see unreasonable increases in their pharmacy costs.
Concierge Medicine
Employees are often left to navigate an extremely silo'ed and uncoordinated health care system. Concierge medicine provides resources for guidance, provider options, quality and cost expertise and even clarity of benefit plans. There are different forms of concierge offerings: 1) Progressive concierge services driven entirely by algorithms that offer guidance based on machine learning. 2) Traditional concierge services that are high touch and person-to-person. 3) Hybrid models that are built on “human driven” technology, offering a balance between live support and technology-driven solutions for health consumers; members can speak with live support or, if they prefer, navigate through an intuitive mobile interface.
Members can access concierge services for a broad spectrum of support. A member can receive triage support, understand what care is appropriate, learn where to access care based on benefits, schedule the care, predict approximate cost exposure, and receive advocacy support for claims and billing questions – all in one seamless concierge interaction. The key to a true concierge experience is integration of information so that the consumer has access to simple and actionable guidance when they need it – without headache or hassle.
Payment Integrity
In a typical plan, between 3-7% of claims are erroneous and should not be paid. Coding errors, duplicate claims and fraud are among the reasons that this massive amount of waste exists. GLBG helps employers implement both medical and prescription drug audits and routine monitoring programs to eliminate waste, fraud, abuse and non-compliant charges.
Transparent Advisor Relationships
Employers fall victim to misaligned incentives. The results are a painful shell game that is repeated annually at renewal. Every time an employer's premium rises so does the compensation of their
broker. This broken system offers no motivation for a broker to work to reduce costs.
Status quo broker:
- Believes costs are dependent on the best offer of the carrier and facilitates insurance decisions once a year
- Gives limited data on plan spend
- Provides limited ways to control underlying costs
- Advocates cost shifting in the form of increased deductibles and copays to lower the employer impact of premium increases
- Blames costs exclusively on employee behavior and poor health
Great Lakes Benefit Group advocates for our clients. We take a long term view in managing a benefit program by focusing on transparency and communication in all aspects of the risk management process. A true consultant creates a 1-3 year plan that includes:
- Transparency to the plan spend
- Communicates all forms of compensation and is willing to tie some areas of compensation to performance
- Provides risk management to suit the needs of the business
- Removes shock renewal rate surprises
- Returns control over employer costs
- Bring the "benefit" of Benefits back to the business
- Considers benefits a true attraction and retention tool
- Provides detailed data driven analytics and actionable insight
