Why self-insurance strategies are out of whack and other realities for advisers


ook, I get it. The benefits business has changed immensely in the past decade and advisers are perpetually under pressure to show value to their clients. Actively seeking cost reduction in employer healthcare spend is a natural place to focus, and a vital one. The rising tide of advisers tackling the high cost of healthcare is not just highly commendable, it’s necessary.

But…the way it’s happening is whacko.

Here is the basic strategy for what the more hyperbolic advisers are calling a “revolution” in advising: Convert employers to a self-insured model; attack costs on multiple fronts by designing plans that make it easier to address high-cost usage patterns; go hard after wasteful PBM and carrier/provider network arrangements; promote healthcare consumerism and old-is-new-again strategies like direct primary care, and continually monitor and audit claims data to see where next attack high costs and waste.

But this approach isn’t so much a revolution as the way our business should have worked all along. Unfortunately, wasteful practices have embedded themselves so thoroughly that our methods for backing ourselves out of them only make sense inside the reality that is the U.S. healthcare system.

Read the full article at Employee Benefit Advisor.

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