It’s common practice to wait until you recieve your renewal to ask the hard questions. Unfortunately by then the biggest cost and coverage issues are already baked in.
Before your next renewal you should prepare yourself by asking these five questions:
- What are the three largest underlying drivers of our health plan costs?
- How am I paying for my Broker and other health plan vendors – including indirect compensation?
- How do our hospital and paharmacy costs compare with reasonable benchmarks?
- Are health-plan fiduciary governance and documentation adequate and up to date?
- Does our current health plan strategy create value beyond just negotiating the renewal?
If the answers are unclear, the problem may not be the renewal.
It may be the strategy.
A health plan should be managed as your second largest financial risk (because that is precisely what it is), not simply renewed once a year.
If you’re going to control health plan costs you have to know what they are. What are the health conditions that are causing your renewal to increase every year? What can you do to reduce costs and improve the care your employees are receiving? What are your alternatives? Is your broker bringing solutions that can mitigate high costs? Suggesting different carriers or creating more cost shift to your employees doesn’t change what you pay for with expensive care.
Can you determine how much your broker and other vendors are being paid while your costs go up each year? If they’re paid on commissions they get a raise everytime your costs increase.
How does your hospital and pharmacy costs compare to other businesses like yours in the region, state, or nation? Can you benchmark your costs to see if you’re being treated fairly?
Do you have a strategy that protects you from your ERISA fiduciary liability? Is your broker guiding you in your compliance responsibilities?
Is your current benefit cost strategy limited to just renewal negotiations provided by your broker? If that’s it that’s not really a strategy. A real strategy includes health care supply chain management just like you use to purchase other high cost services and supplies for your business. It includes alternatives to status quo health plans that can impact health care costs and provide guided clinical care for your most vulnerable plan members. And it includes an expert sitting on your side of the table working for you instead of the insurance companies.
These five questions are a good place to start taking back control of your never-ending health plan increases. If you’re ready to get off the “renewal merry-go-round” let’s start a conversation exploring these questions. Reach out to us or schedule a brief conversation.
If your next renewal is approaching, now is the time to determine where your plan may be unnecessarily increasing costs – and what options you have before the renewal arrives.
Schedule a 30-Minute Conversation No sales pitch. Just clarity.