Turning Away from Self Insurance

The Issue

A large, self-insured real estate management firm with a little over 300 employees came to us after it had experienced its second year of significant medical cost increases. It had countered the prior year’s increase through cost shifting and an increase in copays and deductibles. This time they came to us for an alternative strategy.

Our Solution

We first asked for their claims utilization data to determine reasons for the sharp increase in medical costs the past two years. We were able to identify a few primary cost drivers, but more of a concern to us was their current TPA, who we found to be lacking in large claim management. Because many of the large claims were heart and cancer related and wouldn’t necessary end soon, we decided to recommend a move to a fully insured program to limit the large claim exposure. Through a competitive bidding process, we chose a carrier and in addition to enhancing the company’s wellness program, we implemented a portfolio of claim management programs for large claim intervention and identification of at-risk individuals.

The Result

After spearheading a substantial employee communication strategy to describe the changes being made along with reasons for heightened employee personal health responsibilities, we implemented the program with first year costs close to 12% lower than the projected self-insurance costs. As a result, the company took a portion of the $400,000 annual savings and increased their contribution to each employee’s HSA accounts.

Our team of experts can evaluate your program through data analytics and technology to determine the best cost containment strategy for your company.