IS HOW YOU SHOP FOR BENEFITS THE PROBLEM?
On Friday, I had the opportunity to meet with representatives of a county government whose annual cost of health insurance benefits have ranged between $4.1 million dollars and $4.3 million dollars over the last 3 years. This has been a very consistent expense and will continue to be. The cost of their administrative services has been almost the same over the last 3 years, and the cost of their actual insurance premium has stayed almost exactly the same over the past 3 years. The rest of their cost is and will continue to be the cost of the medical services that they have a need for and the cost of the drugs that they will continue to utilize. This too has been quite consistent and persistent over the last 3 years. This group however is constantly struggling to pay for this benefit. Furthermore, much of their benefits are unchangeable due to multiple union contracts. Much to their credit they formed a committee to evaluate ways to reduce costs. Nobody on the committee has any in depth understanding of the internal cost dynamics of what the insurance and medical system has created. If they would take the time to get to know this, they could be able to establish a game plan to use their resources more effectively and reduce the costs of what their needs are by eliminating expensive unproductive middlemen. This was a suggestion that I made. I suggested a way for them to buy a little extra time to become a knowledgeable group and to be able to punch a hole in their costs immediately. Instead, however, they have created an artificial self imposed deadline to choose a quote from an insurance company which will actually increase their cost. This will be done after a schedule of one or two future meetings of a committee formed to choose a quote for premiums for a system designed to keep them ignorant of true facts. The total amount of time that will be spent to learn about how to spend over $4 million dollars of community money will be about 3 hours.
1) Do any of them even know what a PBM is? NO!
2) Do they know what the difference in their cost could be by eliminating the PBM and working with a local pharmacy? NO 3) Do they know how much they could save by working directly with primary care providers?
4) Do they know how to compare the actual cost of medical and drug utilization versus premium prices? NO
5) Do they know what reference base pricing for health care is, how it works and how much can be saved?
6) Do they know the difference between the insurance company and the network? NO....
Now are they willing to give themselves an opportunity to become knowledgeable and to be able to use their money more effectively? NO! Just let's get quotes from insurance representatives but don't take the time to hear from medical and pharmacy professionals who can really help them. We wonder why this system is so out of control? This is typical of most groups who continue to seek answers from the wrong people.
Until small to medium size employer recognize this, they will continue to see higher premiums and lesser benefit while insurance companies see higher profits and stupid, lying, power grabbing politicians gain more power with fraudulent promises.
If this is how your company shops for benefits... we should talk!