Company Overview
Western Slope Iron & Supply, Inc. is a privately owned company that has been a leader in the steel fabrication industry in Colorado since 1974. The company specializes in the fabrication of structural and miscellaneous steel for high-end commercial, industrial, residential, and governmental projects. Their market spans the western United States, including Colorado, Arizona, Nevada, Utah, Wyoming, and New Mexico. Additionally, the company provides specialized project fabrication for the mining, oil, and gas industries. David Marsh serves as the President.
Challenges with Previous Health Plans
For years, the company utilized level-funded health plans through Cigna and/or United Healthcare (UHC). Despite maintaining these plans, they faced annual premium increases ranging from 12-18%, with no surplus returns. In 2023, under UHC’s traditional PPO level-funded plan, the total costs amounted to $392,040 or $11,878 per employee per year for 33 covered employees.
Strategic Shift in 2024
To address rising costs and improve benefits, Western Slope Iron & Supply transitioned to an unbundled health plan, implementing several key improvements:
- Maintained existing plan designs
- Reduced fixed costs to less than half of UHC’s total costs
- Implemented Reference-Based Pricing (RBP) for hospitals
- Established direct contracts with the majority of physicians
- Integrated independent Stop Loss and Third-Party Administration (TPA)
- Partnered with an independent Pharmacy Benefit Manager (PBM) with specialty drug carve-outs
- Provided access to Concierge Nurse Navigators (CNN), offering 100% coverage for members when utilized
Impact and Results
The transition delivered significant cost savings and operational improvements:
- Total costs dropped by 43.8%, reducing to $220,068, or $6,669 per employee per year
- 67% engagement with CNN nurses, leading to improved care coordination
- Monthly reporting for enhanced financial and performance transparency
- Only one balance bill incurred ($150, affecting the owner of course)
- Only one specialty drug prescribed, with a significant cost reduction
- One specific stop-loss claim
- Medical and pharmacy aggregate loss ratio of 77%
- 4.5% renewal increase in premiums, due to the transition from a 12/12 to a 24/12 contract
- 3% renewal increase in maximum cost
Conclusion
The move to an unbundled health plan not only resulted in substantial cost savings but also enhanced plan flexibility, improved member engagement, and optimized financial predictability. By leveraging a customized approach with independent components, Western Slope Iron & Supply successfully mitigated rising healthcare costs while maintaining high-quality employee benefits.
