Wow, what a year! Many employers are now taking the necessary steps to finally lower their healthcare costs, and getting away from insurance companies, PPO networks, and the same old, traditional programs that they look at year after year.
I thought it might be beneficial and informative to give you a summary of what I’ve seen in the marketplace, what’s worked and what hasn’t, and some ideas for next year to consider.
Almost all of my new and existing clients have implemented an unbundled partially self-funded plan in 2017 as opposed to a bundled fully insured plan, or bundled self-funded plan with an insurance company.
What this allowed them to do was to implement programs that the insurance companies couldn’t offer regardless of whether they were fully insured are self-funded. It allowed them to explore, study, and determine whether these programs were appropriate for their organization and culture. It also afforded them the opportunity to improve the financial and operational performance of their plan as well as lower costs for their employees.
In the past, the same employers have done what most employers have had to do each year – cost shift increases from insurance companies to their employees through higher deductibles, coinsurance, out-of-pocket exposures, co-pays, or require employees to pay more for coverage for themselves and other family members out of the paychecks. Couple that with having to absorb the increases and reduce profits – this is what’s not working!
The most notable programs were Reference Base Pricing and a program to eliminate the extremely high cost of Specialty Drugs. Collectively and on average, my clients these programs have reduced their costs by >27%, which has allowed them to stabilize or improve the benefits they offered to employees, give greater wage increases and bonuses, while also reducing their company costs and increasing profits.
Reference Based Pricing (RBP) has been around the U.S. for over 10 years. What RBP means is that a Reference point is used with which to Base the Pricing for providers. The Reference point is usually either Medicare, Cost, or a combination of both.
By using a Reference point, an employer can eliminate the excessive costs that hospitals charge, as well as eliminate the increasing costs that hospitals continue to charge year after year for the same service. When you utilize RBP, you effectively eliminate what insurance companies call “trend.”
The Specialty Drug Program they have implemented is one which provides high-end, name-brand maintenance drugs, and specialty drugs, to members at little or no cost to the employee AND the plan. It’s a voluntary program that an employee can access and get their drugs for free! And, the claims don’t even show up as a claim in the employer plan. Over 1,700 different drugs are offered by this Advocacy Program.
Take for example these drugs and their related costs. How great would it be if the employee had no out-of-pocket expense for these drugs and the drugs were never filed a claim?
Prezcobix: $20,568 Lyrica: $5,088
Humalog: $16,800 Lantus: $9,180
Enbrel: $54,600 Humira: $50,400
Xsareto: $4,776 Lialdo: $12,660
Trulicity: $8,304 Truvada: $19,200
Orkambia: $259,000
It’s been a very busy year, because my clients have started to think outside the box. I have been very fortunate to onboard new clients that have had the desire to learn more about how they can affect their health care costs and the programs available to them. They just can’t take it anymore from insurance companies. Their brokers are probably not aware of these innovative programs, or are unwilling to talk to them about it.
If you want to be innovative in 2018 and stay ahead of the ever-increasing cost pattern, please let me know and I’m happy to have a free conversation with you. You can reach me at 970.349.7707 or [email protected].
If I don’t have the pleasure of talking with you before the end of the year, may you and yours have a very Happy Holiday!