3 min

Employer health plan sponsors who stay with outdated, status quo insurance carriers perpetuate practices that benefit the insurer instead of the insured. Author-surgeon Dr. Marty Makary asserts that health plan freedom only comes into reach when employers abandon the chronic condition of “groupthink.”

Continued fealty to legacy insurance plans only deepens the cumulative burdens of rising costs, negligible cost controls, lack of transparency and data access, poor member support and financial trauma, and employer fiduciary risk. Employers can, and should, do better.

Commit to an Intentional Plan of Action

Many employers are held hostage by the belief that they have only two choices:

• Maintaining the status quo with an ever more costly legacy insurance carrier, or
  
• Taking a big leap to alternative plans.

This is an illusion. By implementing an intentional, multi-year strategy with manageable plan changes and employee choice, employers can gain year-over-year control and freedom on a realistic timeline.

Most important to escaping groupthink is leaving the restrictions and disadvantages of legacy insurance carriers behind. Employers can begin by moving to a conflict-free, modern health plan administrator that offers advanced tools and controls for delivering a health plan that is incrementally less costly and offers better, more compassionate coverage. This can be accomplished successfully with clear communications that ensure company leaders and employees understand the inherent benefits.

Year 1 | Savings 10%+
Move to a Modern Health Plan Administrator

Game Plan | Achieve full access to claims data, complete cost transparency, and 10%+ savings. (If fully-insured, move to a self-funded or level-funded plan finance methodology.)

• Implement a national PPO or regional preferred provider network for initial comfort
  
• Deliver an advanced cost-plus, full pass-through Rx plan with built-in member financial assistance for 40%+ savings
  
• Add nationwide, preferred surgery bundled contracting that waives member costs for 50%+ savings
  
• Offer virtual care for physical and behavioral medicine at no cost to members
  
• Gain better out-of-network claim pricing and cost control
  
• Provide concierge member support and advocacy

Year 2 | Savings 20%+
Increase Cost Control and Plan Freedom

Game Plan | Build on Year 1 by adding a plan that uses advanced fintech for medical claims reimbursement instead of poorly performing PPO network contracts. This will significantly reduce employer costs and fiduciary risk while increasing employee disposable income and limiting out-of-pocket financial exposure.

• Continue offering the Year 1 PPO plan with its cost control components, member cost-waived benefits, and concierge support
  
• At enrollment, give employees the option to choose an open-access provider-choice plan that is less costly and provides better coverage. The open access plan uses Fair Market Payment reimbursement for hospital/facility claims and a nationwide physician network, resulting in 30%+ savings over the PPO plan (members are never out-of-network on this plan)
  
• Realize lower stop-loss premiums and reduced chance of spec claims
  
• Reduce medical cost trend

Year 3 | Savings 30%+
Optimize Savings

Game Plan | Build on Year 2 savings by increasing enrollment in the open-access plan and expanding use of the preferred surgery program.

• Enrollment in the open-access plan will increase naturally in response to its lower payroll contribution and out-of-pocket cost
  
• Add incentives to boost open-access plan enrollment; increase the PPO plan buy-up 
  
• Realize further reduction of stop-loss premiums and chance of spec claims, and even lower medical cost trend as enrollment shifts from PPO to the open-access plan

In outlying years, the PPO plan might be grandfathered, offered only to a subset of employees, or removed altogether.

For larger employers, taking a “slice approach” can work well starting in the first year. In this scenario, a legacy insurance carrier is left in place and a modern plan administrator is secured separately to give employees access to the open-access plan and enhanced member benefits. A modern administrator can deploy a cost-plus, fully transparent, pass-through Rx plan to the entire population.

Similar to Years 2 and 3 above, enrollment will naturally migrate year-over-year from the legacy PPO plan to the open-access plan for growing savings. The legacy PPO plan can be grandfathered or removed at some point.

Gain a Competitive Advantage

Employers often share the incremental savings realized with a modern health plan administrator with employees by improving retirement and other benefits. This is an excellent strategy for attracting and retaining talent to gain additional advantage in a competitive marketplace.

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Never leave to tomorrow that which you can do today. ~ Benjamin Franklin

< 1 minute

An American Psychiatric Association (APA) survey reveals that 43% of American adults feel anxious in 2024 — up from 37% in 2023 and 32% in 2022. The primary driver is the economy (77%), which creates financial stress and insecurity that can affect employee productivity.

The University of Cambridge has identified the many impacts of stress on individuals. Left untreated, these physical, emotional, intellectual, and behavioral issues will eventually creep into the workplace creating:

• High turnover and absenteeism
• Poor performance and productivity
• Low morale and motivation
• More accident and incident reports

In sharing her personal journey to mental health, Dr. Keren Landsman writes, “In scientific studies, people who’d benefit from mental health care give rich and varied reasons for not seeking it, among them thinking it’s unnecessary, fear others will think less of them for getting it, and cost.”

This is supported by the APA, which reports that only 24% of adults have spoken with a mental health professional in the past year. Younger adults (18-34) are more than twice as likely to seek help than older adults (50+) and among those who received services, 59% are worried about losing access to mental healthcare.

Therapy is health care and “longstanding federal laws are supposed to ensure that health insurers cover mental health care just as they do physical treatments. Yet finding a mental health provider and, crucially, getting health insurance to cover their services continues to be a struggle.”

Employers can play a vital role in changing this dynamic. Choosing a modern health plan from Vitori Health provides employees with free access to virtual behavioral health services and eliminates financial stress driven by high health care costs from legacy insurers. And, concierge support services make it easier to find a provider.

< 1 minute

Legacy insurance companies allege that their fully insured employee health plans shield employers from undue risk. But this illusory “protection” includes excess insurance expense, no cost-control mechanisms, no transparency into claims data, and denials of coverage.

Many employers recognize that self-insured plans offer greater control and savings. However, they often take the path of comfortable inaction or continue to allow the fox to guard the henhouse by self-insuring with a legacy insurance company.

Sticking with “the devil you know“ for self-insurance is a poor strategy that perpetuates high costs and myriad issues inherent in legacy insurance health plans. While these employers may have removed some insurance expense, they are still stuck in the same costly networks and provider reimbursement arrangements that fuel cost escalation.

Vitori Health makes moving to self-insurance safe, easy, and highly rewarding. With Vitori’s effective cost suppression controls, employers can have a modern, more compassionate health plan at lower a cost and with better stop loss rates. Employers as health plan fiduciaries are accountable to their plan members to look at alternatives beyond the outdated insurance companies.

2 min

Employers admit that legacy insurance carriers deliver poor service and do nothing to control escalating healthcare costs. Yet they stick with the status quo, insisting that changing plans is too hard for employees. Paradoxically, this inertia carries high costs and multiple risks for plan members.

Financial distress is one of the most negative results of staying with an underperforming employee health plan. Year after year, such plans impact employee finances by reducing benefits and redirecting their wealth into ever-higher payroll contributions, deductibles, and out-of-pocket expenses.

Studies show that shifting rising healthcare costs onto employees has outpaced wage and cost-of-living increases, effectively reducing or stagnating wages and increasing income disparities. Forward-looking employers know that by making health benefits more affordable, they can improve employee satisfaction and financial security and stay competitive in a tight labor market.

Members are further harmed when legacy health plans routinely deny claims and limit patient access to network-gated providers, services, and procedures. As a result, employees are exposed to (and often liable for) high-cost, out-of-network claims that can be financially devastating.

Consider this $97,000 surprise bill for transporting an infant from a local ER to a regional hospital for life-saving treatment. Although doctors determined the transfer was the child’s best chance for survival, using the air ambulance was deemed “not medically necessary.” Coverage and multiple appeals were denied, and resolution is still outstanding.

Plan sponsors should consider how situations like this can negatively affect employees and take decisive steps to reduce the spiraling costs and uncovered claims inherent in legacy insurance plans. Perceived challenges in moving to a new and modern health plan are often overblown, especially when the change results in better benefits, lower costs, and less financial risk.

Employees are not as fragile and incapable of adapting to change as employers make them out to be. Using employees as human shields to excuse the status quo increases employee harm and risk and exposes employer plan sponsor fiduciaries to liability.

Like it or not, employers are in the business of healthcare. As with other business improvements, successful leaders advocate for change and have confidence that their employees will recognize and embrace the benefits of a member-focused health plan.

3 min

A comprehensive, member-focused prescription drug plan provides access to the most clinically effective medications at the lowest net cost. How can employers meet demands for costly semaglutide and other heavily-promoted GLP-1 drugs while balancing fiduciary responsibilities and member health?

The key is staying current on unbiased medical research before expanding a prescription drug plan formulary to include the growing number of diabetes and weight loss medications in this wildly popular new class of drugs.

Sixty percent of health systems surveyed want more “real world results” on a drug’s efficacy from sources other than pharmaceutical manufacturers. Employers should expect the same.

Long-Term Results Are Inconclusive

Emerging results are mixed, at best. What we know so far is that these drugs are too costly for most plans and patients, are over-prescribed based on consumer demand, and often do not live up to their promises. Employers should consider just how revolutionary these drugs are before moving forward.

• Weight loss varies by individual. Some lose a great deal of weight; others lose less or none at all. It’s also important to note that GLP-1 drugs do not work alone. Their effectiveness requires a concurrent commitment to exercising and eating healthy foods in smaller portions.
  
• GLP-1 inhibitors do not reverse diabetes. They simply manage it, just like many safer and less expensive medications. Long-term remission can only be achieved through weight loss and permanent lifestyle and dietary changes. While Ozempic can help with weight loss, this two-pronged approach is essential for reversing diabetes.
  
• Patients routinely experience serious side effects… from “Ozempic face” and persistent gastrointestinal problems to headache, fatigue, and retinopathy. A large study revealed that nearly 17% of patients taking semaglutide, the active ingredient in Ozempic and Wegovy, discontinued the medication because of side effects. Patients need to evaluate the long-term impact of these side effects on their overall health.
  
• To maintain weight loss and mitigate (but not reverse) diabetes, GLP-1 medications require “lifelong use to maintain their effectiveness” while prolonging their side effects. Stopping drug therapy reverses many benefits that may have been realized and sometimes exacerbates the original condition.
  
• These drugs are being used to treat a growing number of “off-label” conditions, including substance abuse disorders and cardiac health. Although results are promising, more research into long-term safety and effectiveness is needed before GLP-1s are widely prescribed for these conditions.

How Employers Can Support Member Health

Continued peer-reviewed research into this new class of drugs is needed to determine long-term cost effectiveness, side effects, and safety. Until then, proven alternatives to GLP-1s are and have been readily available to support members’ health and weight loss needs.

• The “original” weight loss medications, which have been in use for the last 10-20 years, continue to be a viable alternative for many patients. These widely available drugs produce, on average, half the weight loss at less than 1/30th the price.
  
• Bariatric surgery has significantly fewer side effects and superior long-term results for both weight loss and diabetes remission. Bariatric surgeon, Dr. Mir Ali, says that for those who meet the criteria, bariatric surgery “has the highest success rate for weight loss and long-term remission of many medical conditions.”
  
• Endoscopic sleeve gastroplasty (ESG) is a one-day procedure that works well for almost everyone. Over a 5-year period, ESG sustained greater weight loss than semaglutide at a significantly lower cost ($33,583 less).

Employers should be offering modern health and prescription drug plans that include appropriate exclusions and authorization triage protocols to control cost and ensure that these medications, if used, are for the right patient, for the right reason, for the correct intended outcome, and at the right cost.

< 1 minute

Economic factors are turning 2024 into a potentially rough year financially for employees. Healthcare costs are expected to rise and employers are planning to scale back on raises and promotions, with many not even planning on a cost-of-living increase.

This double whammy will effectively reduce employee net compensation and disposable income. Despite the downside for retention, many employers seem willing to take this risk. Key findings of a recent survey of 600 business leaders revealed:

• 26% of companies will not or may not give raises next year
• Half of companies giving raises say less than half of employees will receive one
• 52% of business leaders anticipate layoffs in 2024

Employers need to do everything possible to ensure their compensation and benefits packages remain competitive. Offering a member-first health plan from Vitori Health is a smart strategy for achieving cost control and employee retention goals.

• Vitori’s less costly, more compassionate health plan delivers better benefits to more satisfied members with 80+ Net Promoter scores and 30% lower health plan costs. Savvy employers can reinvest their savings in cost of living increases, helping employees save for retirement, and other benefit enhancements.

• Vitori Vantage, the industry’s first 3-year level premium health plan, eliminates the unpredictability of rising annual healthcare expenses. Vantage stabilizes cash flow and helps employers budget for strategic workforce investments.

Employers tethered to legacy insurance carriers with uncontrolled healthcare costs are giving up competitive advantage with fewer options for improving employee pay and benefits. It’s time to take a modern approach to employer sponsored healthcare that boosts employee satisfaction while successfully reducing plan costs.

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It is abundantly clear that employers need to break free from fully-insured health plans with legacy insurance carriers. Premiums spiral higher with every renewal, and employees and their families are increasingly exposed to devastating denials of care and coverage… all in the pursuit of greater profit.

Despite laws to the contrary, insurers create the illusion of coverage while finding loopholes to avoid providing actual care. In its series on how the insurance industry routinely denies coverage to patients, ProPublica exposes the system’s inner workings and how it harms the people it purports to help.

For one patient, denial of cancer care had tragic results that sadly, could happen to any employee covered by a traditional, fully-insured health plan. The good news is that employers can break free from this profit-driven corruption by moving to a self-funded or 3-year level-funded health plan from Vitori Health.

Vitori removes the risk of legacy plans that cede all power to the insurance company by providing greater control over coverage and care. It also offers upwards of 30% in savings and includes low and no-cost care options to covered members.

Employers can provide real health care coverage to their valued employees.

2 minHealthcare costs are spiking to record levels and burdening the nation’s employers. Significant portions of premium dollars pay for inpatient hospital services, with employers paying 200% or more of Medicare prices. “Plan sponsors as plan fiduciaries have to take action. They can’t just stand for it.”

So says Michael Thompson, president and chief executive officer of the National Alliance of Healthcare Purchaser Coalitions (National Alliance), whose playbook supports employers’ claims that hospital prices are unreasonable and unsustainable. It also urges employers to take more responsibility for negotiations.

While very large employers might have the wherewithal to navigate reimbursement discussions with hospitals and health systems, it’s like asking patients to be cost-effective healthcare shoppers in an opaque and foreign healthcare economy: much easier said than done.

The legacy health insurance carriers have done almost nothing to address hospital cost relief for decades. In fact, BUCA contracts with hospitals perpetuate the cost escalation, allowing hospitals to charge whatever they want with little oversight while insurance carrier profits increase along with rising hospital charges.

Reference-based pricing (RBP) is often touted as an alternative because it caps costs at a negotiated percentage above the baseline Medicare price. The downside is that RBP’s overly simplistic reimbursement method and combative stance with providers routinely results in contested claims payments. Employees bear the brunt of this friction with balance bills that increase their medical costs and create financial uncertainty.

Achieving Fair Pricing with Fair Market Payment™

Vitori Health removes the unrealistic expectation of hospital price negotiation from employers and their health plan participants with its exclusive Fair Market Payment™ algorithm that determines appropriate claim payments honored by providers without friction. This unique and sophisticated approach drives significant health plan savings while delivering an exceptional member experience.

A nationwide analysis of plan performance reveals that:

• 98.8% of Vitori FMP reimbursements are paid by providers without question. Claims with extenuating clinical circumstances may warrant an easily administered reimbursement adjustment. BUCA insurers and RBP plans regularly deny and delay a much larger percentage of claims, frustrating providers.
• Less than 0.24% of Vitori claims have an unexpected member bill compared to BUCA and RBP plans, which have 10-40 times higher rate of unexpected member billing.

A modern, member-first health plan with advanced technology can effectively counteract today’s skyrocketing hospital and healthcare costs. Employers can realize 30% savings with industry-leading plan advantages and unprecedented 80+ Net Promoter member satisfaction scores.

3 minHigh-deductible health plans (HDHPs) shift cost to employees and families, often with distressing health and financial impacts. HDHPs were introduced years ago by the legacy insurance carriers as a way to deflect responsibility for rising healthcare costs away from themselves. Read More about Do You Know the True Impact of High Deductible Health Plans?

2 minHospital and health system mergers have become rampant and are typically announced with glowing press releases promising greater access to better and more affordable health care. However, research into the results of consolidation exposes outcomes that run counter to these promises.

In 2022, healthcare mergers and acquisitions resulted in a record setting $45+ billion in total transacted revenue. Industry insiders expect even more activity in 2023 with Deloitte predicting that “after consolidation in the next decade, only 50 percent of current health systems will likely remain.”

The nonprofit, nonpartisan Kaiser Family Foundation (KFF) has studied the real impact of consolidation on American consumers, 54% of whom receive healthcare through employer-sponsored health plans. Their findings align with other studies showing the unmet promises and benefits promoted by hospital system aggregators.

Unrealized Quality

Results are mixed with the majority of studies concluding that health care quality is essentially unchanged or worsened. Research from The National Institute for Health Care Management (NIHCM) Foundation states that there is “no evidence that clinical processes or patient outcomes improved after an ownership change, but results point to modestly worsening quality from the patient experience perspective.” Findings from the New England Journal of Medicine show “modestly worse patient experiences” resulting from hospital mergers and acquisitions.

A Harvard review found that care quality was only slightly better at consolidated health systems than private practices. According to Nancy Beaulieu, study first author, “One of the key arguments for hospital mergers and practice acquisition was that health systems would deliver better-value care for patients. This study provides the most comprehensive evidence yet that this isn’t happening.”

Competition and Cost

Despite claims by the American Hospital Association (AHA) that consolidation reduces health care costs, mergers have shown to increase prices and reduce affordability even as profits increase.

Studies continue to show that consolidation and health care costs have a detrimental association. Less competition means fewer choices and more opportunities for health systems to monopolize a market and raise prices. This impact is nuanced in large, metropolitan areas and keenly felt in small and mid-sized markets where dominant providers emerge as the result of consolidation.

Trade association AHIP (America’s Health Insurance Plans) describes this connection rather succinctly:

“Everyday Americans bear the brunt of hospital consolidation. Hospitals in highly concentrated markets can charge higher prices for medical services and have greater leverage to negotiate higher prices from health insurance providers, leading to ever-increasing health care costs for individuals and families.”

Neutralizing the Impact of Consolidation

KFF calls for policymakers “to address any potential anti-competitive behavior in markets that are already consolidated.” And NIHCM declares, “In the face of ongoing hospital market consolidation and accompanying price increases, consumers deserve to experience measurable and meaningful quality [and cost] improvements… Merging hospitals must be held more accountable for achieving, not just promising, such benefits.”

Employers that maintain allegiance to legacy insurance carriers whose profits increase when hospital prices rise will feel the negative impact of health system consolidation in higher medical claim costs and insurance premiums. While there are plenty of excuses for sticking with the status quo, employers who choose a modern health plan administrator using advanced claims payment technology can limit the negative impacts of health system consolidation, and meet their fiduciary obligation to manage costs for their health plan participants.