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In the past seven years, an alarming 10% cumulative medical
inflation rate has been realized. That means for every $100 you were
spending on health premiums in 2000 is now up over $196 in 2007. Have
your margins increased this much?
The employer above saved $128,000 on 28 employees, while
keeping the out-of-pocket risk the same to their employees as their old plan.
The actual savings was an astonishing $4,571 per employee. On average we’ve
saved companies an impressive $1,000-$3,000 per employee without harming
employees who have catastrophic or chronic conditions. Can your service
provider say that; I’m guessing the answer is no. In fact the out-of-pocket
maximums for most employees were actually less than their current plan.
Why haven’t you been informed of the alternatives? Simple.
Most companies haven’t been exposed to the alternative plans which represent
this significant savings because of the strong disincentive by the broker to
educate their clients. With these plans the premiums are 30-45% less than their
current traditional PPO plans. That means your current broker will lose 30-45%
of his commission. When we're talking health care cost, those numbers
represent a strong incentive to keep you uninformed of all your alternatives.
Since they won’t inform you, we will.
Generally we’re asking people
to step away from outdated beliefs and step into a more rational, analytical and
more antidotal role. From that place we can have a significant impact on your
business as a whole. Our business has everything to do with the company and
maintains that focus throughout project life cycles. We know a company must
constantly strive to drive down the cost of doing business in order to stay
competitive in today’s flat markets.
With over 600 case studies in health insurance nearly 90%
saved money and received a better benefit, with less out of pocket cost. As
mentioned above we do this without harming employees who have catastrophic or
chronic conditions while on average we saved $1,000-3000.00 per employee.
People say; “That can’t be done.” It’s not that it can’t be done; the fact is
we’re doing it. With insurance brokers we have uncovered hidden charges for
third party administration that totaled 52 times the normal rate, and many other
countless and need cost additions. Statistics are manipulated in order to show
a rising cost in health care. The question is; is that increase reflective to
YOUR true health care spends, or are you picking up someone else’s tab?
2006 Numbers are in: These rate increases
year after year are not sustainable by the average company and soon many will
have to give up health care to their employees. The numbers for 2007 are
looking even worse.
+ 7.7% Average increase in health care premiums
+ 8.8% Medium to small employers
+10.5% Under 24 covered persons.
(NATIONAL COALITION ON HEALTH CARE NOV. 07)
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"Cost
savings for the corporation is generally not hard to find; and most of
our clients we have shown a marked and measurable financial relief.
Frankly
speaking what is hard is dislodging people with a vested interest in
keeping things the same."
- Joel Terry |
Service providers in most instances shield the end user
from the real cost of doing business. With health insurance premiums you
may be paying for a six layer multi-tiered commissionable arrangement that may
have you paying as much as 45% more for no real values add to the
corporation. The service providers while “selling” to the corporation never
present or disclose other options or in many instances better options due to
major financial disincentives. If they know your willing to pay more, why would
they consider offering you a substantially lower price point? Cutting your cost
by 45% means a resulting cut in their commissions by as much as 45%.
Why Top
Level Involvement is Essential to Success:
With insurance, if we convince top management the Human
Resources Department is in the business of HR and spends more of its time
mitigating risk for the company then it does underwriting policies, we’ll make a
lot of headway. They’re trained generally on mitigating risk involved with Jack
in building 2, third floor, row C, who has a propensity to use foul language or
make disparaging remarks. Keeping honesty in mind (and at the risk of damaging
ego’s) we need to realize HR personnel are not subject matter experts in health
care and address these matters once every year, not several times a week. They
administrate policies and health care procedures of the company and should not
be in the position to dictate it. Just as a CFO is not a tax code specialist,
they rely on outside accounting firm for expert consultation. Congress and
underwriters can write the tax codes or insurance plans changes; but until they
are put into effect, until applied, they hold no value to your business.
The reminder here is this has little to do with the
department heads and everything to do with the company.
HR in this case and other departments of common vendor
need to take a lesson from the CEO/CFO, who retains outside industry expertise
to look things over. The auditors become an independent eye, which is unbiased
of outcome. Understand limitations, and for the betterment of the company;
internal audits should be preformed across all vendor services. Our analytical
and more antidotal role asks; why should insurance, energy, and
telecommunications be different? Why should these areas be out of scope when it
comes to an independent level of scrutiny? Not doing so statistics bare out can
cost companies substantially more for services.
Money for
Nothing?
Most if not all of the services you purchase have
commissionable arrangements tied to them; so you may get the service you
want but generally at an inflated price. Or you may be engrained in a
multi-tiered commissionable arrangement, which you’re unaware of and has you
needlessly paying more for nothing.
Income the service provider’s salesperson earns is tied
directly to how much you spend. In this case isn’t the wolf watching the hen
house? Their focus is their commissions, their quotas, and underlying
disclosure issues you may not be aware of; so their focus is generally on their
bottom line and not yours.
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