Insurance brokers specializing in employee benefits packages work with both general agencies and carriers to develop products for their clients. The carrier and general agency model has worked well for quite some time. But thanks to a variety of influences, brokers find themselves looking for other avenues. They are specifically looking for ways to work around traditional carriers and their offerings.
Some of the more innovative brokers are teaming up with healthcare provider networks to create packages for their self-insured clients. A good example is a recently inked deal reported by Becker’s Spine Review in a June 25 (2020) news alert. The deal involves one of the nation’s largest benefits brokers and a nationwide network of orthopedic specialists to create an affordable benefit for self-insured companies.
A Less Expensive Option
Health insurance benefits from major carriers can gradually become unaffordable for employers over time, explains Dallas-based BenefitMall. This leaves benefits brokers in the untenable position of having to find something cheaper. If an employer is willing to go self-insured, creative solutions can be found.
Partnering with a local provider or a provider network can offer a less expensive option for employers. Such arrangements save money by eliminating the middleman. In other words, payments go directly to providers rather than being filtered through insurance companies that take a little bit off the top for themselves.
The arrangement is good for providers because they get full payment for their services. By contrast, reimbursement rates from insurance companies are rarely 100%. If you were an orthopedist, would you rather receive a direct payment at 100% or a reduced reimbursement from an insurance company?
Establishing the Right Partnerships
The key to working around traditional carriers is establishing the right partnerships. It is great that the benefits broker cited by Becker’s managed to sign a deal with a nationwide orthopedics network. But orthopedics only goes so far. Your typical employee needs access to affordable primary care before orthopedic care.
This may explain why more companies do not self-insure. If they cannot establish the right partnerships, they do not have enough to offer employees. It is just easier to sign on with carriers and become part of a larger employer group.
Brokers could play a pivotal role in changing things by working more aggressively to convince providers to join network arrangements. For example, imagine a network of concierge providers who offered affordable primary care based on a flat, annual fee. Also known as membership medicine, this sort of arrangement can theoretically save both companies and their workers a ton.
The obvious downside is that concierge medicine isn’t very helpful outside of primary care. A patient undergoing long-term treatment for a chronic illness would still have significant out-of-pocket expenses. That says nothing of emergencies and hospitalizations.
Primary Care the Place to Start
There is no perfect solution to the systemic problems of America’s health insurance system. If the system is ever going to be improved though, we have to start somewhere. Primary care is a good place to start. It is an arena in which brokers and providers can work together to come up with less expensive solutions that make self-insuring more viable.
Save money on primary care and the rest of healthcare delivery becomes more affordable. How so? By encouraging consumers to make better use of their primary care options and, subsequently, reduce the need for more expensive services.
There are ways to offer good employee benefits while working around the traditional carrier model. Brokers are beginning to understand that. And the more they do, the more innovative and transformational their solutions become.