Jim’s Take

The Perfect Marriage

A Romantic Corporate Story

Pat, a very unhappy CEO, was so miserable that the entire C- Suite was infected with his angst.  Chris, the CFO, more than anybody, was in a perpetual funk because every single year Chris was in the bull’s eye of Pat’s ire.

After all, Chris had primary responsibility for the bottom line.  It fell in Chris’s aegis to control the costs of operation of the company, and the CFO’s primary responsibility was to properly husband the resources of the firm.

Every year Adrian, the VP of HR, would come in and tell Chris the inevitable bad news – Bigass Health, their Health insurer, had just released its opening salvo in the annual health care renewal.  It was inevitably a large number, large and ugly.

Chris would throw a fit.  “Adrian, you can’t do this to me!  How can they possibly justify that number?”

“Chris, I’m not doing anything to you.  Don’t shoot the messenger.  The carrier said our claims weren’t all that good – we have some ‘conditions.’ 

“But I’ve talked to our broker, Blake,” Adrian continued, “and I’ve been assured that this is just the first offer.  Blake’s gonna shop the market and maybe with some competitive quotes, our carrier might come down some.”

Chris inevitably asked, “So, Adrian, you say the claims were bad.  How bad were they?”

“Well, Chris, the carrier won’t really say.  We’re not large enough to get any specific data on what’s wrong.”

Long story short, this drama inevitably played out for a couple of weeks.  Blake would shop the market, find a carrier or two that were somewhat lower, the current carrier would then come down a bit and deliver a “less bad” renewal.

Chris and Pat and Adrian would talk it over and reluctantly sign the paperwork that would start the countdown to the same drama repeating itself 12 months later.

Finally, one year the team decided that enough was enough and set off to find an alternative solution.  Chris led the effort, and the first thing was to call BBI, a company Chris had “met” through the BBI newsletter and Jim Edholm’s blog.

When Chris met with BBI, the team discovered that, while there were LOTS of reasons why choosing a fully insured health plan was a not-so-good idea, there was ONE CONSIDERATION that no broker had ever talked to them about, and it really caught the team’s imagination:

  • Nowhere in a fully insured arrangement is there ANYONE whose interests and incentives are aligned with the employer
    • Carriers profit when premium goes up, so do brokers, providers are only interested in their bottom line, and Rx manufacturers are notoriously venal.

What BBI proposed was a team of professional health-care-knowledgeable advisors whose sole duty was to get the best possible care at the lowest reasonable cost.

The BBI called their method “Disintermediated Health Care.” It consisted of ridding the plan of as many intermediaries as possible at the same time assuring that any intermediaries involved had their goals aligned solely with those of the Employer and not with the vendors or other suppliers to the health plan.

Central to this arrangement – here’s the love story part – was that team of medical advisors.  Picture this, if you will:

  • The advisor was available 24/7.
  • They were medical professionals
  • They had the resources to identify providers for the employees who were
    • Nearby
    • Top Quality providers
    • Competitively priced providers
  • More importantly, they would advise the employees on any medical question they had (while not actually practicing medicine).
    • They were like Alexa. They simply found the best solutions and gave the best advice while leaving the practice of medicine to the local medical professionals
  • But most exciting, the advisor’s team was proactive.

This last is crucial.  If employees won’t call for input, most advisors won’t do anything.  But this advisor tracked and acted upon outside inputs.

For example, the advisor called every covered employee on their birthday.  They interacted with the claims processor; if there was a “trigger diagnosis” as defined by a standardized medical resource, they would call the patient to help strategize how to approach the treatment.

If there was a pre-planned hospitalization (i.e. pre-op) the advisor reached out; if the patient had been discharged (i.e. post-op) the advisory reached out.

In fact, there was a multi-page list of things that could trigger a call from the advisor to the employee.  In short, they did a LOT.

And the effect was magical. 

On the tangible side of the ledger, claims dropped by more than $2,500 per covered employee per year in the first year.

On the intangible side, employees were able (as part of the BBI suggested plan modifications) to achieve nearly $0 out of pocket medical cost simply by following the advisor’s advice.  Employee enthusiasm increased, days of absence decreased, and Chris routinely bragged that productivity was “way up.

In short, Pat, Chris and Adrian – in fact, the entire C-Suite – felt they had found the perfect marriage, the perfect partner, and by golly, they all lived happily ever after.

Blake, however, thought it was all a bummer.

The End.

Graphics courtesy of Freepik.