Many employers with fully insured plans have never considered partial self insurance; for the rest, too many of them have been willing to focus almost exclusively on the fixed costs of administration and stop-loss insurance, as if the variable claims costs cannot be affected. The adage, “The claims are the claims” does not need to be true. These employers might even have taken the advanced step of adding an on-site clinic, but if they stop there they are greatly sub-optimizing their opportunities.
Statistically Valid Surgeon and Hospital Quality Data
Transparent Drug Pricing and Specialized Rx Cost Containment
Reducing Administrative Costs, Including Stop-Loss Coverage
Most consultants do a fair to good job on shopping the market for stop-loss coverage, but there is much more to shopping for the best program than most realize. Consultants generally have access to traditional markets but do they also have access to specialized dividend-paying pools, captive programs, and carved out Rx-only stop-loss coverage? Does the consultant’s report show options such as aggregating specific contracts (not to be confused with aggregate coverage)? Does it show gapless contracts if a 12/15 contract is shown, and if a 12/15 or 12/24 is shown, is it compared to a paid contract, with or without the Terminal Liability Option (TLO)? Does the plan allow lasers on renewal, and if lasers are not allowed, is there a rate cap on renewal? If different deductible limits are shown, are Monte Carlo simulations run to see which option is likely better, based on past claims experience? There is much more here than most people realize. [See “Stop, Stop, Stop.”]
Vitally Important Second Opinions from World-Leading Specialists at No Employee Cost
Controlling Consulting Costs
Insure Only Those That You Need to Insure
Negotiated Hospital Costs
Is the cost your health plan pays for hospital charges a function of their true cost to provide services or instead whatever the market will bear? Hospitals are required to provide the federal government with their true internal costs in order to receive Medicare reimbursement, and yet too often hospitals charge commercial clients more than 250% or more of what they accept from Medicare. (The American Hospital Association in 2019 determined that on average Medicare and Medicaid paid hospitals about 13% below their costs, and 34% of hospitals were even paid by Medicare at cost or higher—so do we really need to pay for a 100-300% mark up?) It is time to do something about that. There are tools that can be used to negotiate a fair level of reimbursement from hospitals. It might be the best investment you make all year.
- Find the members who have gaps in care, which can include those not using their medications on a timely basis.
- Find the diabetics or other seriously ill members who do not appear to be following their treatment regimens.
- Determine the cost effectiveness of an on-site clinic.
- Analyze the Rx usage to look for waste or abuse (including opiods).
These are just some of the potential uses of a sophisticated data analytics program, which holds the potential to find tomorrow’s large claimants today. If that goal is met, everyone wins.