Hey employers: You Don’t HAVE to Keep Providing Sucky Overpriced Health Benefits
Find an innovative benefits advisor who will save you and your employees money - while improving your health plan
Here’s a little-known fact about the high cost of health care for working Americans: It could be A LOT LOWER.
Employers and working Americans are overpaying for health care. The problem isn't the actual expense of health care. The problem is industry profiteering from bloated administration, predatory prices, hidden markups, misleading middlemen, overtreatment and more. This helps explain why health care executives rake in millions while 1 in 5 Americans are being chased by medical debt collectors. The big insurers that provide or administer health plans for most working Americans make more money as costs go up. They don’t have the incentive to reduce these oppressive health care costs. And so they don’t.
If you’re a working American, your eyes might glaze over as soon as you hear the words, “health insurance.” It does sound dreadfully dull, doesn’t it? But please tune in. Americans call the high cost of health care their number one financial concern, year after year. You and your family are bearing that burden. But those annual increases in your premiums and deductibles could be reversed. You and your family could be saving thousands of dollars a year if your employer got smart about your health benefits.
If you’re an employer, listen up. There’s a growing movement of innovators disrupting the health benefits space. They are health benefits advisors, third party administrators, transparent pharmacy benefit managers, claims reviewers and more. But they are doing business in a way that's fair and transparent. Often they are defectors from the big industry players that have been exploiting the American public. Many of them changed their ways because of a crisis of conscience. I write about these disruptors in my book, “Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win.”
Earlier this week, I attended a significant gathering of some of these key innovators at the inaugural YOU Powered Benefits conference in Phoenix. I was honored to deliver the opening keynote address to spur along these disruptors. (Photo above, courtesy of Melissa Hassler.) They are delivering what I call in my book my audacious proposal – much better health benefits for workers at a much lower cost.
Before the conference, I attended a half-day Value Based Consultant Course taught by David Contorno and Emma Fox, the health benefits power couple who also organized the conference. They deconstructed the black box of a self-funded health plan, breaking it down into its individual components: third party administration, payment/reimbursement engine, medical management, pharmacy benefit manager, stop loss insurance and more. The traditional big box insurers – think Blue Cross, UnitedHealthcare, Aetna, Cigna and Humana – bundle everything together. Their black box approach may be an “easy button” for employers. But it doesn’t allow the employers and their advisors see or analyze the costs. The middlemen also exploit the black box to insert hidden fees and markups that drive up the expense. There’s an incredible amount of deceptiveness in this game – and employers and working Americans are paying the price.
Savvy employers and advisors separate the plan components and partner with trustworthy vendors. This enables them to obtain their data and analyze their costs. Contorno said their health plans routinely save more than 40% in the first year. In my book I featured one of his clients, Palmer Johnson Power Systems in Wisconsin. The company improved benefits and waived out of pocket costs for employees - and saved so much in its first year the owner took every employee on an all-expenses paid trip to Colorado. The next year they saved so much again that every employee got a $700 bonus. Contorno said in the training session that his employers save so much money they look forward to renewal meetings each year.
One of the most enlightening parts of the training came when Contorno explained how he gets paid. Traditionally, health insurers and vendors pay benefits brokers fat commissions and bonuses and reward top performers with lavish vacations and other perks. In my book I call this the hidden conflict-of-interest that's undermining the purchase of employee benefits. You've got insurance brokers advising employers while getting paid by insurers. That's not gonna lead to better benefits for employees! My 2019 ProPublica article about this troublesome problem led Congress to require brokers to disclose their compensation to employers.
Contorno and Fox get paid directly by their employer-clients, not insurers. Plus, they get a bonus from each employer that's based on how much money they saved the health plan. Changing the compensation structure aligns their interests with what’s best for the employers and workers. It incentivizes them to break through the harmful status quo instead of go along with it.
Contorno and Fox are among the benefits advisors who are on the leading edge of this trend toward better benefits at a lower price. But they are far from the only ones. Many other excellent advisors around the country are following the same playbook. They're saving huge money for employers - even small employers - while delivering better benefits for employees.
Employers: check out the Health Rosetta and NextGen Benefits groups to find these innovators in your area. Or, ask your broker to tell you about options other than the big black box of health benefits being served up by your insurer.
Employees: It’s your compensation that pays for your employer sponsored health plan. Ask your employer to stop serving up the same old overpriced and underperforming health benefits. My book goes into all this in much more detail, so check it out to learn more.
The Validation Institute certified the training course, so we took a test when it was complete. I'm proud to say I passed with a 97%! OK, it was open book - but still! So I guess that makes me a certified advisor? Don't worry, I'm staying in my lane. But I'm so glad I could learn from the training!
Substack fundraising update: I'm humbled by your generosity! It's been one week and I’m up to 27 paid subscribers for this Substack newsletter. AWESOME! I'm donating all the proceeds from my paid subscriptions to educate patients in need and hire professional advocates to assist people who can’t help themselves. My newsletter is free, but I invite you to help others by being a paid subscriber.
Now let’s put these funds to good use! Do you know a patient dealing with an especially complicated medical bill, or medical debt, or an insurance company denial? I may be able to help them myself. If I can’t, through the generosity of this Substack community, I can hire a professional patient advocate to take their case. Send them my way!
Important to establish connections with like minded people. Great job in attending that conference and giving the opening address Marshall! In time the behemoth insurance companies with all their abuses may be replaced by ones that provide benefit at a markedly reduced cost to all involved instead of an elite few.
Congratulations on starting the Allen Health Academy, but such unfortunatey initials...