Insurance is about Risk vs Benefit
The Healthcare exchange spreads the risk around, so it also owns the benefits from health people – this is a bad deal for a healthy workforce.
In order to gain from being healthy, you must assume the risk – but there are protections against real risk.
Self-insurance means the company pays for all the healthcare costs (high risk) – but if people adjust their mindset and use healthcare in the manner of an informed consumer, the program has very low costs.
There is a specific approach (mindset shift) to keeping utilization costs low, but first, the company needs to mitigate their risk.
- Stop-loss insurance to cover against a major incident
- Aggregate-loss insurance to cover against cumulative incidents
- Any high-risk individuals, or if the company has a very bad year – the company can always defer to the public health exchange
Create a Health Reimbursement Account (HRA) for the company to draw from for medical use. This is a pool of money that covers the deductible for Stop-loss, but is pre-tax and earns interest when it’s not being used.
Create Health Savings Accounts (HSA) for individuals to draw from for their share of the costs. This is an account that accumulates over time if it is not used, but is pre-tax going in, and tax-free if used for specific medical expenses.
The company must incentives the employees to use a carefully curated network:
- Carefully Selected Centers for rare but critical procedures
- Carefully Selected Quality Hospitals for in-patient care
- Carefully Selected Physicians, professionals and Urgent Care facilities for primary and out-patient care
Use primary care providers that are incentivized to direct patients to the least invasive approach to a desired outcome.
Primary, in-patient and specialty care are selected using visible pricing and quality scores
Pharmaceutical co-pays are based on 1 of 2 tiered pricing systems
Outside providers are necessary to set up the curated network and to process claims