Why Self-Funding is Such an Important Tool for Managing Group Health Care Costs

self-fundingDon’t give your power away. If you’re not paying attention to the detail behind your health plan costs, you open the door for uncontrolled expenses that could derail your business and bankrupt your employees.

Why is the detail important? Where do you want your company’s hard-earned profits to go?

You can help your employees and their families improve their lives by directing them to proven, effective treatment programs delivered by quality providers. You can provide coverage protection for catastrophic illnesses. You could also offer wellness and care management strategies that encourage healthier lifestyle choices. Or, you can keep contributing to a health care system that’s beyond broken:

  • While Americans spent more $3 trillion on health care in 2014 (more than the next 10 biggest spenders combined), we get no better and, in many cases, worse results than countries spending less per person for health care
  • We spent $84.9 billion trying to treat back pain, while experts estimate that as much as HALF of that expense is unnecessary
  • The CEO of Yale New Haven Health Care makes $2.5 million a year – 70% more than the president of Yale University
  • From 1998 to 2013, Big Pharma spent nearly $2.7 billion on lobbying expenses — more than any other industry; while the world’s 11 largest drug companies made a net profit of $711.4 billion from 2003 to 2012

When you adopt a self-funded health plan strategy, you take control of your plan and your costs.

  • You will have the tools and flexibility to design a plan that meets the needs of your employees, as well as your budget.
  • You’ll be able to see where your plan costs are going and take steps to manage them, avoiding the pitfalls of unexpected and uncontrolled expenses and catastrophic claims.
  • You can identify areas where wellness and disease management programs can help employees make better health care decisions that can transform at risk patterns that lead to chronic illness such as diabetes.
  • You can guide your employees to quality physicians and facilities that deliver better outcomes, and offer prescription drug solutions that deliver effective results while helping to manage the high cost of pharmaceuticals.

Even those organizations with as few as 15 people can benefit from the advantages that self-funded programs provide. More affordable than fully-insured programs, self insured plans that are managed and administered by an experienced third party administrator, give the control back to you.

Personalized reports and plan transparency show you exactly where your health care dollars are being spent – while your plan administrator can show what actions you can take to mitigate cost exposure and risk to your employees and your bottom line. AND, you get to keep the plan cost savings generated by your self-funded partnership with a qualified TPA.

For more information on the benefits a self-funded program could offer to your company’s employee benefits plan, contact Diversified Group today.

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