We’re often asked, “If my company unbundles services and moves away from a single integrated provider, how should we go about evaluating vendors?” Well, in order to maximize your company’s self-funded plan you need to start with the people for whom you are providing services – your employees.
There are three components to doing an evaluation.
1. Situational Factors
- Demographics – Age, gender, and ethnicity can all impact the prevalence of medical conditions your employee base will experience.
- Geography – Employees in remote areas may be less inclined to seek or continue medical treatment if they need to drive a long distance. Conditions that could be helped with early or continued intervention become much harder (and more expensive to treat). Similarly, you need to look at the quality of care that is available in a rural community hospital versus a major metropolitan medical center.
- Environment – Medical conditions vary by climate – arid versus damp, hot versus cold. The severity of asthma and arthritis are just two of the medical conditions that can vary by climate.
- Societal – Sadly, certain areas experience a greater proportion of smoking, substance abuse, and depression.
- Hereditary factors – Heredity plays a large role in the types of medical issues that employees can face, including conditions like breast cancer and Alzheimer’s.
2. Prevalent Medical Conditions
Look at where there may be a high proportion of chronic or acute conditions and their treatments. These can include:
- Premature births
- Burn victims
3. High Cost Claimants and Stabilizing Claims
A key way to maximize a self-funded healthcare plan is to stabilize claims for those who are high cost claimants. Look at these claimants in tiers – the top 1 percent, top 5 percent, top 10 percent, and top 25 percent – and see what costs are being incurred. Is dialysis a big cost? Then you can look into pre-purchasing dialysis treatments. Are emergency room visits high? If the answer is that employees live too far from quality medical care and use the ER as their regular doctor or they let conditions fester, telemedicine or on-site clinics may make both medical and financial sense.
Having a robust database that contains current as well as historical claims is part-and-parcel of being able to do this analysis. If your database can’t provide or manage this level of data, we strongly encourage you to make that part of the evaluation and implementation process.
To learn more about the benefits of self-funded healthcare plans, download our white paper Maximizing Your Company’s Self-Funded Healthcare Benefit Plan today.