This is Why Saving Money on your Population’s Healthcare Matters, and Why You Should Care — a Story.
Is a 10% Cost Reduction, Improved Productivity, and better Employee Relations in the cards?

The Setup
I was on the phone with a potential client, a VP of Benefits for a super-regional financial services firm with thousands of employees and a huge healthcare benefits budget. Self-Insured? Check. TPA? Check. Seemingly sophisticated infrastructure? Check. This VP came to me from a personal referral, so I thought, mistakenly, that this guy would get it. Now, I will admit that my pitch was not perfect, and that I’m much better in a face-to-face environment. Still, I thought that because of the personal introduction and the fact that he took the call based on my emailed pitch, that we’d have an engaging and meaningful call. Whether or not I would get his business was to be determined, and I wanted to start by establishing myself as a knowledgeable person with a very valuable proposition. What happened on that call taught me lessons that I think will resonate with the healthcare and health benefits milieu.
The Conversation
After the obligatory introductions, Chuck asked me what I wanted to do and what I had on offer for him. I told him I could cut costs by 10%, improve his productivity, and improve employee relations all through his firm’s healthcare. I was asking Chuck about the size of his benefits portfolio, his TPA, and his analytics. What I was attempting, as a matter of course, was to establish that 1) they were self-insured, 2) they were spending a ton of money on healthcare, and 3) they could moderate (not reduce) the spend on their health benefits by reducing utilization. My discussion around analytics was the watershed moment…
The Light Bulb
So I asked Chuck outright if he wanted to save money on his healthcare spend. Did he have a knowledge of his employee population? What analytics were being provided? What did the analytics tell you? What are your concerns? And so on. Chuck didn’t seem too concerned about his spend, nor did he really have an interest in his employees health, at least from the perspective of utilization (curious, that, as utilization equals spend). Chuck got a report, once a year, from his TPA. He wouldn’t describe the report contents. Once a year! OK, I asked, what if your employees can reduce their pharma spend, or reduce their utilization? Does your analysis provide the points of action from which to reduce spend? No and no. This guy didn’t seem interested in the analytics, the population, or saving money on his healthcare spend. I was incredulous. I can save you money Chuck! We ended the call cordially and afterwards I was trying to figure out how to save what I thought was a blown opportunity.
The Sad Conclusion and the Lessons
After thinking about the call, and speaking to a couple of trusted advisers, I came to a few conclusions: 1) Their TPA was giving them a report once a year. Once A Year. Now, if I were responsible for the healthcare spend out of our self-funded plan I’d want to learn as much as possible about the details, the analytics, behind the spend. I’d be asking for a report weekly, monthly at most. Quarterly as a basic overview for management. But Annually? This told me that the interest or concern about their healthcare spend was not consequential to Chuck et al. 2) Supporting that, Chuck’s hesitation to discuss his spend and how he could reduce utilization told me that his priority wasn’t about utilization. Saving on healthcare wasn’t going to move the profitability needle enough for his management to engage with another consultant. 3) , despite the verbiage about a “caring culture” and a “wellness culture” at the firm. Chuck’s reliance on the TPA for all their healthcare interventions, analytics, and infrastructure let them push off the responsibility, while an “annual report” could justify his work. So, I learned that Chuck wasn’t a client, at least not yet, but I can keep him in the loop for further communication.
What Can You Do?
If you’re spending significant dollars on healthcare, whether you are self-insured or not, looking at the details are key, then establishing health promotion/wellness/disease management protocols will come easy, if that’s necessary or desired. The questions of what drives the spend, whether hospitalization, pharmacy, chronic illness, outpatient, etc. etc. etc. are elemental in determining the next steps in moderating your benefits spend. By improving the health status of your people, I can save your firm 10% (or more) on healthcare costs, improve productivity, and have the people engaged and believe that the firm is engaged in their best interests .
How Can I Help?
Email me for a complimentary Assessment of your population’s health and firm’s health benefits. If you have any questions about managing utilization, moderating spend, or working around your organization’s healthcare issues — I’d be happy to help: steve@healthalytical.com
Be Well, Steve
