As everyone knows, there is a direct correlation between increased health insurance costs and the increased cost of healthcare. You’ve probably heard in the recent past from your broker that you may have had a bad year of claims so your health insurance costs are going up.
If you want to pay less for health insurance you have to have a plan to pay less for quality healthcare. It can’t be just be doing the same thing, different day – the status quo. If you’re tired of getting continual rate increases year after year, you have to take a different approach with a different strategy.
By the way, I find it very disturbing that there is so much employer complacency in the marketplace today about accepting rate increases. I don’t know if employers simply don’t know what to do, or they’re not getting good advice from the broker, or think it’s too complex, or too much work. But the reality is you can lower the cost of your health insurance by lowering the cost of healthcare. Here’s the way you do it.
The two highest expenses on employers healthcare bills are: 1) hospital costs, and 2) Specialty Drug costs. Hospital or facility costs represent (generally speaking) about 60-65% of the total healthcare spend in your plan (notwithstanding prescription drugs). The other big spend is specialty drugs.
First, let’s talk about hospital/facility costs. In order to understand hospital costs you have to dig in and understand how hospitals charge and how they negotiate with insurance companies. The bottom line is that hospitals can raise her prices anytime they want. There are no rules, no regulations, or laws about what those prices can be. So when an insurance company goes to negotiate perceived large PPO discounts, they’re very much diluted by the hospitals increasing their prices. The only way to effectively manage this is to eliminate the PPO network pricing and implement a different reimbursement strategy such as Cost Plus and/or Medicare Plus. This effectively will reduce hospital costs and claims by 30% or more.
Specialty Drugs are very expensive and utilization is increasing. More and more people will be taking these prescriptions in the future. General speaking these are injectables. If you see a drug advertised on TV it’s probably a Specialty drug. Arrangements can be made with Specialty drug advocacy programs that can get these Specialty drugs to the members at little or no cost and do not cost to plan anything in a claim.
These are high end and costly drugs that can be tens of thousands or hundreds of thousands of dollars every year – just for the medication, not to mention the cost of medical treatment. Let’s take Humira for example – very expensive wonder drug – anti-inflammatory and treats a number of medical conditions. But what they don’t tell you is that the cost is $70,000 a year. If you have three people on Humira for example, you could save $210,000 a year in claims – that’s huge. Skyrizi – $204,000; Taltz – $75,000; Zolgensma – $2,100,000. While there are a number of these programs available, care should be taken to examine their differences of service, cost, and drug availability.
There are also a number of other programs that can lower cost as well such as diabetes management, oncology management, End Stage Renal Disease, and a variety of others,
Believe me, you can lower the cost of health insurance by implementing a different strategy. If you want learn more about how you can put a plan together give me a call and we can chat.
