How often do you hear from a broker or consultant about how they can save you money, only to find that they changed insurance companies and the savings were only marginal? I can tell you from experience – it happens all the time.
We were referred into a Municipality that had a BUCA carrier (Blue Cross, United, Cigna, Aetna) for their self-funded plan. The Municipality offered 2 health plans – a Traditional PPO as well as a High Deductible Plan with an HSA and have ~225 employees participating in the plans.
Rather than proposing a particular plan or insurance company, we suggested that an Analysis of the current plan would be the most appropriate route in order to determine and quantify opportunities for savings and improvement of their plans. We examined and analyzed their Plan Documents, Contracts, and Claims.
Here are a few highlights of their 2023 BUCA plan:
- Medical Plan Costs: ~$2,900,000
- Prescription Costs: ~$980,000 (many Specialty Drugs too)
- Stop Loss Premiums: $637,000
- Administrative Costs: $129,600
- Significant Chronic Conditions
- Plan Document: Numerous exclusions and lack of Plan Detailing
After our review, here are the results:
- Hospital repricing resulted $1,003,000 Savings
- Prescription Drug repricing with an Independent Pharmacy Benefit Manager resulted in $479,000 Savings
- Stop Loss repricing with an Independent Reinsurer resulted in $156,000 premium savings
- Administrative costs are about the same
- Implement a Centers of Excellence program and Concierge Nurse Navigation and waived ALL out of pocket costs when utilized
- Implement an effective Disease Management Program
- Conducted a thorough Plan Document review and detailing to be consistent with the Municipality’s intent, not the insurance company’s desire.
- Significant savings created the opportunity for an On Site Medical Clinic
- Assured Governmental/CAA Compliance
- Kept the 2 Plans intact
In our opinion, employers go through a RFP process that neglects very important aspects of a health plan. It usually focuses on costs and administrative processes rather than capabilities and customization. Costs can be negotiated, capabilities cannot. Nor can innovative strategies be offered through BUCA.
It’s the ‘EASY BUTTON’ for brokers or consultants to rely on and recommend the insurance companies to sell what they want to sell, not what employers want to purchase. If employers want to make health care and health insurance affordable and sustainable, they need to look outside the box of BUCA. Otherwise, it’s the same ‘ol stuff, the same ‘ol increases, just a different day.
