Bob, Let Us Know When You Run Out of Money


Your decision to continue your current PPO program is understandable. You are not out of money yet.

By Bill Rusteberg

Thank you for allowing us to assist in analyzing your current group health insurance program. Employers across the country are facing the same issues as you.

Your decision to continue your current PPO program is understandable. You are not out of money yet.

Continuing high costs that never seem to end, cost shifting to plan members creating angst within the workplace, narrow provider networks adding to the angst, onerous ACA mandates and filings, innumerable hours spend by HR and your benefits team investigating options in the market, dealing with insurance brokers and consultants, and pissed off employees seems to be never ending.

Bob, as you know, we proposed moving your plan away from managed care to a more common sense approach, utilizing claim bench marking, transparent pricing, direct provider agreements and increased employee involvement in their health care decisions.

I believe we both understand that since 90% or more of health care spend goes to medical caregivers, overall health care costs can only be addressed by targeting these costs.

I believe we both understand the cost of health care is directly proportional to what we agree to pay for health care.

I believe we both understand that aggravating increasing health care costs is the fee-for-service basis of medical care reimbursement. The more tests and procedures (necessary or unnecessary) the more health care givers earn and the more we pay.

I believe we both have come to understand we have traditionally relied on third party intermediaries to negotiate pricing on our behalf. Yet, we are prohibited from knowing what these costs really are. We are prohibited from auditing claims and questioning plan payments. Why would any prudent business person, like you and I, agree to these things? This is really the central issue facing employers like you Bob.

I am positive we both understand that not only must employers contend with these issues (which┬ácan mean the difference between profit and loss), they are plagued with the ever present entitlement mentality of plan members honed over the past 40 years through an increasing and irreversible tidal wave of socialism. Plan members expect someone else to pay their health care expenses. That “someone” is you. You have become their daddy and they want and expect Daddy’s credit card for unlimited use towards health care costs..

Of course, both you and I know you pay nothing towards the cost of health insurance. Rather, it is plan participants who are paying the full boat in lieu of higher wages and bonuses. But, as you and I have discussed, most employees are too dumb to realize any of this.

If you drop your group plan, your fear is that valuable employees will leave for greener pastures. And, you fear you will have a tough time attracting and hiring the best employees. But times have changed.

Under our current socialist system of health care, no one can be turned down for health insurance anymore, and one does not have to accept employer sponsored health insurance either. Any American, legal or illegal, can get ObamaCare almost upon demand these days (using various loopholes if need be) and instead of using Daddy’s credit card, they can use Uncle Sam’s.

Health care is no longer an employer’s moral responsibility but rather it has become an individual responsibility.

Of course I realize that is an oxymoron: Socialism coupled with Individual Responsibility is akin to mixing oil with water.

But, as we have discussed, for an employer who is hell bent on continuing a group medical plan, there are options out of the ordinary that can achieve immediate savings without reducing benefits. Proven, with unqualified success in reducing health care costs, increased provider access, improved benefits, this strategy is rapidly gaining market share by early and middle market adopters, most of whom have run out of money, or can no longer afford the cost of convenience.

In your case, management fears employees. Management fears employee angst attached to anything other than cost shifting. And you fear management.

Your management team has recommended continuation of the status quo. They cite the inconvenience of moving away from managed care. They cite the potential of balance billing, lawsuits and credit dings. They cite the potential of care givers who may refuse treatment of plan members. They fear employee sedition.

Management wants you to continue the status quo using “your money.” Daddy’s credit card has yet to max out.

Management’s message: “We recommend you pay 40% more just for the cost of convenience. Employees will love you for it!” (The Cost of Convenience)

Only when Daddy’s credit card maxes out, or the cost of convenience becomes too high, will you be a perfect candidate for Reference Based Pricing / Cost Plus Insurance strategies. Otherwise, reason and logic is not a determining factor, even for anally-retentive plan sponsors. Continuation of the status quo is “totally around the bends. is a specialty company in the benefits market that, while not an insurance company, works directly with health entities, medical providers, and businesses to identify and develop cost effective benefits packages, emphasizing transparency and fairness in direct reimbursement compensation methods.

The shared vision of and clients who retain our services is to establish and maintain a comprehensive employee health and welfare plan, identify cost areas that may be improved without cost shifting to any significant degree, and ensure a superior and sustained partnership with a claim administrator responsive to members needs on a level consistent with prudent business practices.

Plan costs, in all areas including fixed expenses and claims are open for review on a continuing basis. Cost effective plan administration and equitable benefit payment to providers are paramount to fulfilling our mutual fiduciary duties. As we proactively monitor and manage an entire benefit program we are open to any suggestions members may make or the dynamic health benefit market may warrant in order to accomplish these goals.

Duty of loyalty to our clients, transparency and accountability are essential to the foundation of our services. To that end, we expect our clients to realize a substantial savings based upon the services that we will deliver.

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