Three Health Benefit Cost Drivers Central to Battling Rate Increases

Most employers are encouraged to “deal with” rate increases, not solve them. Hoping to halt spiraling costs, they search fruitlessly for some magical carrier who somehow has an inside line on “the best discounts” in the medical provider network. In the end, most find that it’s the same old cost shifting shuffle: the bulk of the so-called lower rate increase is passed along to employees through higher deductibles, higher co-pays, higher payroll contributions. Don’t be duped by rates that are masqueraded as “consumer driven.”

At OMEGA Benefit Group, our top-shelf benefits brokers and risk managers think more like economists with real working experience. We know that the latest trends and concepts, and certainly most initiatives currently being offered in the group health industry stem from “lagging indicators.” For instance, when the patient runs up claims costs, you can almost count on seeing higher premiums next year when your insurance carrier exposes you to more claims and then applies provider discounts, case management, pre-certification, and more fees. Who is in charge, and who has your company’s back preventatively, to forestall these costs in the first place?

There is a way to solve the current health care crisis without red-tape government intervention. The answers are down deep at the root of the problem. “Leading indicators” are where true success begins. Lagging indicators deal with after the fact symptoms, taken once the damage is already done. According to research out of Purdue University, over 74% of all health care costs are traced back to lifestyle – our first health care driver. Some companies passively offer a limited wellness benefit, and others haven’t even gotten that far. The key question is are you promoting wellness at a sufficient in-depth level where your company benefits with lower costs? Do even know how many of your folks even use them or what impact the wellness program makes on your bottom line or your employees’ health?  Today’s industry canned wellness solutions are ineffective.

OMEGA has discovered methods for harvesting high impact initiatives and measures of success.  We’ve found that CFO concerns and Human Resources issues are both met in our distinctive programs. We evaluate and educate employees and even their families to lead them to be responsible for their own health care practices. It is this Compliance to personal health practices and compliance on the part of major health providers that we identify as the second driver. You may be used to seeing the direct relationship between non-compliance and health problems. It’s time to get used to seeing the opposite: that strong compliance from your people and their providers can lower costs and increase productivity.

The third driver is more lagging than leading. Random medical events simply happen to all of us.  Risk Management can deal with some, but not necessarily all of the random medical events impacting a group health plan. Some things cannot be foreseen. A chance automobile accident with long-term effects can spike your year-end medical figures. Good risk management techniques identify common characteristics in these unfortunate happenstance medical events and then apply tight, comprehensive techniques to enhance care and mitigate the financial exposure.
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OMEGA’s strategies for tackling these three drivers cover the gamut of health risk exposures.  This looks far different than “shop and slash” type rate bartering. OMEGA believes in preventive care for proactive rate negotiation. Chasing health care is rather like a horse that has already left the barn.  This may be what you doing now, even if what you are hearing from your current broker sounds more sophisticated. We’d like to catch the horse before he’s out the door. Our ways are smarter, make more impact, and assure you of longer-term success.

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