The first issue is a practical look at
how health care trend is financed.
$2M Trend ÷ 10% Margin = $20M New Sales
How many new customers?
How many new sales calls?
Underlying Trend Factors
Provider Contract Changes
Geographic Mix of Providers
Plan Design Change
Provider Billing Practices (i.e., Code Creep)
New Patented Drugs
Specialty Drug Utilization
Open or Closed Networks & Formularies
The second issue is the annual insurance
cycle and perceived lack of control.
The perplexity for many is with the
annual cycle; the perception that there
is an artificial
anchor and settlement process
in the insurance industry.
In addition, it is not all that clear to the buyer how to identify and deconstruct the various profit sanctuaries and to
have them rebalanced in their favor.
It is also important to know whether the processes have embedded conflicts of interest from a transactional approach.
The key point is to eliminate excess costs for assumed risks and realize gains for the risks transferred under the corporate risk management strategy.
The third issue is how to keep the employee and employer engaged in cost control.
Employee Deductible = $1,000
Employee Coinsurance % = 80%
Employee OOP Limit = $2,500
When a claim exceeds $8,500,
what is the incentive for the employee
to control costs as the benefit is 100%?
Plan Maximum = Unlimited
Employer Stop Loss = $150,000
When a claim exceeds $150,000,
what is the incentive to control costs
when the reimbursement is 100%?
These are referred to as "dead zones" because at some point both the employee and employer may become indifferent.
The fourth issue is the measurement
of returns on investments in all programs.
According to IBIS World, as of 2018, the corporate wellness industry has an annual growth rate of 1.3% and is a $7B revenue industry. The pressing question is whether these wellness programs are having impact on the amount an employer spends on health care. As the debate on wellness program efficacy continues, a real time
dollar impact to the program is happening through active engagement with the employee. Specifically, the use of transparency tools, clinical effectiveness
and setting management services in determining whether a service is medically necessary and where the best place to acquire those services. These would include imaging services, surgical procedures, radiology therapy, specialty pharmacy, etc.