April 20, 2008
Spreadsheets Only “Step One” in Grading Health Benefits
Clearly the group health insurance industry has not served American business well. Conventional practices would create a health care plan that begins and ends with your or your broker’s spreadsheet. While spreadsheets are certainly important tools, they are still just a first comparison in your search for the best health plan. If they are the “be all and end of it all” for you, you are very unlikely to negotiate for any real and lasting improvement.
As a benefits broker and risk manager, OMEGA Benefit Group has a much deeper approach, because implementing our strategies changes who is in control. No one should ever have to be held hostage to computerized systems pumping out countless renewal plan options and renewal rating alternatives with little or no analysis. Because really, a spreadsheet is just words and numbers on a page --unless you can trust someone to read between the lines.
OMEGA’s professionals work with you to determine where your high impact cost drivers are and how you can harness them for better rates. We use rarely employed and analytical risk management techniques you won’t find on any spreadsheet. Most insurance industry models function in reaction mode as the “renewal countdown” begins each year. Hasty decisions usually mean short-term solutions… and more cost shifting to employees. As dissatisfaction grows, there’s no reason to believe anything will change in next year’s “renewal rat race”. No deep thought is given to getting out of the dollar draining black hole. Benefits, it seems, have lost their benefit.
The OMEGA outlook is much more positive. We think through all benefits, not just health benefits, through a prism of perspectives: the owner, employees, CFO, and Human Resource staff. In essence, we first define the real problems, and analyze the symptoms.
There are new tools and ideas if you know where to find them. If all you’re seeing is “impressive-looking” spreadsheets with options for higher deductibles, OMEGA has good news: there are new ways to beat the system. And it’s not necessarily at the expense of higher deductibles, higher co-pays, lower coinsurance, and more dollars out of your employee’s pocket. You can have lower rates with higher personal value. Call OMEGA for the plan that can truly make a healthy difference in your costs, your employees’ productivity and in your HR goals.
May 29, 2008
OMEGA Cites 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 70% 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.
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. Let OMEGA put these cost drivers to work for you…call today. You’ll notice positive change in your costs and employee productivity…we stake our reputation on it.
June 14, 2008
OMEGA Benefits Group Questions Health Insurance Industry’s Conventional Wisdom:
Is It Damaging to American Business?
Old ways are not always the best ways. In fact, sometimes old ways can actually be detrimental when it comes to group health benefits. It’s clear that this industry has failed in terms of “R&D” and innovation. Look at the results! Costs have doubled in the last five to seven years! Employees have never been less content with their benefits packages. What is supposed to be a “benefit” too often turns out to be a liability. Can your company bear another doubling of those costs? Can your employees?
As a benefits broker and benefits risk manager, OMEGA Benefit Group has developed innovative programs that far surpass ineffective conventional solutions. Companies have heard enough about “better discounts” that are not better, and they’ve experienced first hand the pain of cost shifting to employees. They’ve learned the hard way that those programs do not answer the call of solving your group health cost despair. Some employers are not feeling the pinch… yet. But they will, given today’s health insurance market. The math is simple and scary. The “rule of 72” tells us that at today’s industry-wide projected rate increases, another doubling will happen in perhaps five years. Shopping the carrier market and then shopping it harder falls far short, too. Because nothing really changes the trend line.
But OMEGA takes a different route, and it’s one we’re excited to offer you. Rather than dealing with the after-the-fact symptoms of a sick group health system, OMEGA employs techniques that truly get ahead of and anticipate the root causes of spiraling costs. OMEGA gives you the power to prevent those cost drivers from spinning your company’s insurance costs.
Inspirational author Stephen Covey is right that “win-win” is achievable, even in this sticky area of group health benefits. Many companies make use of conventional ideas that pass the costs back to employees without regard to consequence. Obviously there is no win-win there. Others turn to finding rates with deeper discounts, but with stipulations attached: doctors in your health care program are asked to be paid less to do more and in less time. Does this sound like a win-win and better health care or is it the beginning of a cat-and-mouse game between insurance companies and health providers with you stuck in the middle? For many employers, OMEGA has lines of attack that drive better health and lower costs. Each area of the benefits world wins: the CFO, the HR management, and your employees.
It is possible, and yes, even exciting to take charge of your health. We often hear of new camaraderie and personal pride as employees draw together to take ownership of their personal health and their responsibility to their company’s productivity.
This is insurance? This can offer me new power over rate controls? Yes! OMEGA is here to show you how to do it.
July 17, 2008
Insurance is your highest expense next to payroll. If you’re still using yesterday’s insurance strategies, it’s time to retool.
While at the helm of Chrysler, Lee Iacocca’s telling comment of over a decade ago still rings true: “Our largest supplier is not US Steel or Pittsburgh Glass… it is Blue Cross!”
Fully insured or self-funded, group health benefits rank as a top expense for most companies, only surpassed by payroll. Regardless of how group health looks in your budget, it may surprise you to know that it may also be the largest expense you carry that has no discernible or cogent long term strategy.
Most companies set no targets for their future health benefits budget, but instead go into reaction mode. They “grin and bear it” passively, having no idea what they should be bargaining for in their health benefits. For all the expense and effort poured into employee health benefits, there is a perception that the goal of an insurance plan is to curb the number of employee complaints. Employee good will and company impact are at issue in most employers’ minds…but they don’t know how to achieve it.
Your health benefit plan should be regarded as a key productivity tool. Think about that. Is it possible to determine whether your employee productivity is actually higher as a result of using your health benefits as a tool?
Each vital segment of your company should stake ownership in the outcomes of your health plan: your CFO, your HR management, and your employees. Simply “buying silence” through fewer complaints sets expectations far too low. Are your employees more productive while at work? Is your presenteeism adequately impacted through your health benefits management? Are your disability claims higher or lower based on how your plan is running? Is your Workers Comp favorably impacted because of steps you are taking in your health plan?
As a specialty benefits risk manager and broker, OMEGA Benefit Group sets each of these as goals for the companies we represent. All of this is within reach with proper leadership and skills. OMEGA can bring these tangible results to your company. Watch your costs trend line flatten out and perhaps even drop, using a whole new tool set you did not even know you had.
August 18, 2008
Making employees pay more does not solve the problem… it makes it worse
Health coverage premiums are increasing more than four times faster than corporate earnings! At what point will the lines cross and employee health costs pull employers under? The gap between what solutions employers should be employing versus what they are actually doing is widening fast. And it’s digging employers into a deeper hole every year.
It’s been said that “Drastic times call for drastic measures!” Regrettably, too often these drastic measures stem more from gut feelings and a sense of urgency rather than from fact finding and careful consideration. Even worse, the health insurance industry simply spoon-feeds businesses shortsighted “solutions” that in the end only aggravate the crisis. The standard fare for today in the insurance industry is being served up with increased deductibles and co-pays and increased employee contributions. It’s not sitting well with either employees or employers.
Who is to blame? The carriers and their brokers are not always leading the way with meaningful innovation. Some are simply asleep at the switch. And some have their own agenda…and it doesn’t always involve the employer’s interests. Most employers are being offered solutions simply add fuel to an already raging fire.
Rather than think through to the source of the problems, insurance plans have degenerated into reflexive cost shifting tactics. But there are studies and new evidence that a better way is close at hand. OMEGA Benefit Group has been promoting and implementing plans that are producing great results. Employers are seeing their plans turn around. Some would even say their entire business place atmosphere has changed for the better.
Early experiments with providing free drugs for chronic disease have produced some amazing results; reducing costs and helping people stay out of the hospital and emergency rooms.
Increasing costs and reducing benefits is simply bad business. It decreases health plan participation, resulting in a very small spread of risk – threatening the success of any insurance or self-insured program. The fewer the number of covered employees the higher the proportion of sick employees, resulting in higher net costs for all. Indiscriminate cost shifting is essentially a dangerous policy, and has been devastating to American employers struggling to continue to offer health benefits.
- A University of Michigan study that showed reduced costs for diabetic care by removing (yes, “removing”) co-pays for certain generic diabetic medications and reducing co-pays for others.
- A RAND study showed higher patient compliance through strategic benefit redesign, including waiving certain co-pay reduces costs.
- A study published in the New England Journal of Medicine showed a very strong correlation between reduced mammogram rates and increases in co-pays resulting in increased overall costs and lost lives.
- The American Pharmacists Association’s “Ten City Challenge” demonstrated reduced savings through higher patient compliance as a result of reduced or waived co-pays for diabetes and certain other diagnoses. Interestingly, additional coaching from pharmacists was an integral benefit add-on that ensured success.
- Pitney-Bowes and Marriott both employ benefit-enriching strategies resulting in lower costs through higher patient compliance. Pitney-Bowes shrewdly touts the company’s principle as a means of avoiding “barriers to effective treatment.” Pitney Bowes says it now spends 19% less annually for each asthma patient than it did six years ago, before it eliminated those co-pays.
"Cost shifting [onto employees] is the easiest way to attack cost. But it comes right back at you because you're not attacking the root cause," says Andrew Scibelli, manager of health-management programs at Florida Power & Light Co. Florida Power is looking at cutting its co-pays for employees with conditions such as diabetes and coronary artery disease in 2008.
Experts are starting to lament over the affordability of health coverage as it moves stealthily into middle class. The problem is further compounded by the self-employed or unemployed who sincerely and legitimately want to buy coverage but cannot because of a pre-existing condition. Simply reducing benefits and making employees pay more is one of many tools, but alone it is short sighted and very damaging to all concerned.
OMEGA Benefit Group can help you lead the charge and do so intelligently. Rash strategies have cost American business dearly. We can help lead you out of the woods! OMEGA has the proven leadership and strategies to help you redefine successful health insurance planning. And, yes, that includes reduced costs — but not thrust heavily on the back of your employees.
September 27, 2008
Is the ‘Rule of 72’ going to put you under? How many more ‘small rate increases’ can you take year after year?
Picture this year’s budget. Now picture it with your health benefit cost being twice what it is today. Not pretty, but that scenario is unfortunately a very real probability.
According to a March 2008 presentation made by Dr. Paul B. Ginsburg of the Center for Studying Health System Change, corporate earnings increased 27% (about 3% per year) while health insurance premiums and costs increased by 114% (approx 10% per year) between the years of 1999 and 2007. That’s on the conservative end. These health cost increases are actually understated, as they do not account for the reduced benefits implemented in the face of the renewals.
In that eight-year span, health costs more than doubled. If we project this 10% figure forward, the “rule of 72” tells us that the costs will double again in seven years. Say you are a high performing company when it comes to health care, and your inflation trend rate is half of this 10% annual rate, at 5% per year. In seven to eight years, it will be almost 50% higher.
Would you call this at all acceptable? Can your budget even tolerate such an impact? Indiscriminate cost shifting is not the answer. The carrier-based market or brokers at large offer little in the way of optimism. In a recent conversation with a highly placed executive, I heard comments that reflect the frustrations of many: “We are most interested in improving our stockholders’ equity,” and “There really are no solutions.” Sadly, the insurance industry has not inspired confidence that there is a someone “out there” grasping the depth of the problem and looking out for your company!
Do you have a plan? Does your broker? How will you address controlling an expense that is arguably out of control yet is so delicate an issue that mishandling it could cause your company’s morale and productivity to plummet? Insurance coverage is that fundamental; that critical to your operations. So, how is your broker doing here? Do they feel your pain? Do they have real solutions or the “same old, same old, nothing new under the sun”?
High performing companies are doing far better with far lower increases. Incredibly, cost reductions are even possible — and not just by loading the burden onto the backs of your employees with more cost shifting.
OMEGA Benefit Group can make you into a “high performing company” when it comes to health coverage costs and productivity. This is what we do. Yes, we can offer the fundamentals of market access and advocacy for you. We do a good job of servicing the needs of you and your staff. But where we shine is though our perspectives and strategies.
Let OMEGA help from a position of strength and leadership in an otherwise somewhat hostile and rudderless industry. We can work for you and show you real results.
October 16, 2008
Are Your Blinders Preventing You From Seeing Close-At-Hand Ally in Health Benefit Costs?
It’s story time in our quest to better understand the ever-changing, ever-deepening dilemmas of health benefits management. Come gather around OMEGA Benefit Group’s table and consider this parable:
A blind man fell into a shallow well. He was not hurt, but the well was too deep to climb out. At the top was another man who yelled down encouragement and gestured with instructions on how to get out. But the blind man stood helplessly in the water, unable to decipher the gestured directions from his friend. He heard the encouraging words, but that did not help. Meanwhile, neither man saw it, but there was a rope at the feet of the man at the top. The now waterlogged man in the well was confused by his rescuer’s messages. He could not interpret the gestures and could not see the rope so close, yet unknown. The would-be-rescuer had the solution within reach, but was so focused on spouting encouraging words and ideas that he did not open his eyes to other options around him – the rope at his feet. His language and ideas were not working. With no help “in sight,” the cold, wet man finally sat down in the water in resignation, uncomfortable, unproductive and dissatisfied, hoping someone more helpful would come by tomorrow.
Does that story strike a chord with you? Solutions are often close at hand if only the decision makers have eyes to see them. “Rescuers” who exert themselves in futile gestures, may look like they do much, but in reality the results are unsatisfactory.
We hear it all the time: employers have a vague sense that something isn’t working well in their health care program, but they sit stranded, the water getting colder and more uncomfortable, with no help in sight. Or so they believe.
You have to take the blinders off and see the problem in order to recognize a viable solution!
Employee health coverage costs have escalated at an astounding rate over the past decade… at multiple times the rate of overall inflation in the U.S. That upward spiral shows no signs of abating. Today’s excessive costs will be doubled in a very short time. For perspective, consider information from a recently released survey on health stop-loss coverage. The survey's author states that stop-loss carriers are passing along yet more premium increases because of a "pervasive belief that current managed care approaches are no longer able to control claim cost trend. These approaches include PPOs, large case management, pre-certification, utilization review and the use of pharmacy benefit managers."(source: "2007 Towers Perrin Stop Loss Survey Report")
In other words, it’s the same-old-same-old solutions coupled with benefit cutbacks and higher payroll deductions. Employers are becoming more exasperated by the day, as are employees who more often than not fall victim to old methods that only make matters worse for all concerned. The result is, they all pay more, and get less.
In OMEGA's view, the industry's "conventional wisdom" and “state of the business” is like that would-be-rescuer at the top of the well who cannot see the rope at his feet. Hackneyed solutions have run their cycles, much like overused efforts that attempt to squeeze more from less out of already stressed employees.
But there is hope. More effort is needed and OMEGA has a handle on that "more."
Who is that “close ally” and the “strong rope” close at hand?
OMEGA Benefit Group pulls you up from dire straits by aligning new and attractive goals of your employees with the goals of your health plan and with your own goals. With costs out of control, many employers have begun to look at employees and their families as part of the problem due to excessive claims and poor health. However, with proper leadership and direction, this can be turned around.
The root of the problem is not as simple as blaming “greedy and inefficient doctors and hospitals.” By playing the blame game, doctors try to charge more, insurers try to pay less, PPOs try to cut back what doctors can make, and employers offer less. No one wins.
But it does not have to be that way! OMEGA is your strong ally, with solutions that meet your goals. Like that “strong rope,” our ideas pull you out of the same old-same old and into new programs that benefit employees and employers alike. We have seen clients’ costs go down and inflation decrease far below industry averages. OMEGA helps to transform employers into “high performers.” We lead the way for benefits to become your leading productivity enhancement, resulting in higher performers, less absence, a stronger and happier workforce.
This common sense wisdom constitutes a major parting of the ways from existing strategies and attitudes in the insurance industry. OMEGA can bring you the high performance you’ve worked hard to achieve by controlling runaway costs and creating a happier employee.
November 16, 2008
How To Beat the System Of “Fat Cat” Insurance Companies And Brokers Who Actually Benefit From Spiraling Costs
Now that the presidential elections are just over. Maybe your guy won and maybe he did not. Regardless, one of the major issues voiced throughout this 2008 campaign has been health care and closely related health care coverage.
The rhetoric is heating up, and it resonates with many Americans. The sad stories about people left without adequate coverage are not so far from home for your employees, and maybe even for you. Health care difficulties, expenses and even tragedies are populating the talk shows, speeches, news shows and debates. As tempers rise, sooner or later the “fat cat insurance companies” or “heartless managed care corporations” fall into the crosshairs as targets of our wrath as we seek culpability in our government and in health care corporations and industry decision makers. Many employees and employers are watching with interest as the same debates they hear in lunchrooms and boardrooms are now being bantered about center stage in Washington.
Are insurance companies really the problem? They do contribute, just as health care providers and as health care suppliers do. But the problem runs just as prevalent through other portions of the health care grid, too: Government, pharmaceutical companies, lawyers, perpetrators of health care fraud, people who are covered by insurance and those who are not, and even employers all have a hand in stirring this pot. Many are skimming and taking their share off the top, and some are perhaps taking too large a share.
It may well be that right now, someone very close to you is skimming a portion of your share, despite your hard work in continuing to provide fair health coverage for your employees. How much is your benefits insurance broker being paid? Have you asked? Is it commensurate with what you get from them in return? Are they passively cashing checks without being a genuine problem solver or showing you tangible benefits? Do you meet with them on a regular basis to discuss improvements, methods, rates? Are you hearing new ideas?
Some insurance companies offer little or no flexibility in reducing what they pay out in commissions. If that is the case in your program, you may not be getting your money’s worth. After all, even though the carrier may pay your broker, that money still comes out of your pocket.
With OMEGA Benefit Group, you will see us. You will hear us. You will get real ideas and straight talk about issues in the industry that directly impact you and your employees. That’s where we’re different. You will discover new trust and encouragement in the innovative programs we introduce as we help lead you out of the quicksand of health coverage and onto stable footing. We do have a better way. We’re ready to help.