Response To Milliman Cost Plus / PPO Study Indicates Cost Plus Insurance Gaining National Attention

yesnoDoes Cost Plus Make Sense?

The Milliman post ( has attracted interest and inquiries from stakeholders in the health care delivery system from Arizona, Ohio, Indiana, Illinois, California, Texas and New York in recent days. We have received numerous requests for copies of the Milliman report on Cost Plus Insurance / PPO – Comparative Analysis, from national brokerage firms, stop loss carriers, several of the BUCA’s, independent brokers/consultants, third party administrators and two national hospital chains.

Why so much interest in Cost Plus Insurance? Could it be that Cost Plus Insurance and related payment platforms like Reference Based Pricing,  is rapidly gaining market share through an increasingly  competitive market?

Below are several comments we received from readers who requested copies:

Insurance Consultant: “I’d be interested in Cost Plus vs. PPO and Milliman…..every study I’ve ever seen from them makes me call them Shilliman….as in shilling for the Blues. I’ve had several claims repriced vs. Blues and cost plus beats them soundly, even after fees.  Some carriers are giving as much as 30% off of specific rates for cost plus”.

Insurance Brokerage Firm: ”Good afternoon, We are a employee brokerage firm in Ohio and we work with Milliman with our clients. We are up against another broker with one of our clients who is presenting cost plus claiming it will save money over Anthem BC/BS discounts which is very hard to believe! I would be grateful if you could share the Milliman analysis with us! I have had this client over 15 years and do not want them to make a bad decision! ”

BUCA Representative: “Very interesting. This proves my point! Besides, we have significantly better PPO discounts than Cigna”

Houston Employer: “I have been reading your blog and saw your post on RIMS. I would be interested in meeting with you to discuss our employee benefits program.”

Editor’s Note: Cost Plus Insurance, Reference Based Pricing makes sense for some, but not all plan sponsors. With more than five years experience in cost plus insurance and the learning curve associated with this new strategy in containing health care costs, we have found that Cost Plus Insurance can produce significant savings for committed plan sponsors. The key is working with partners who share the same philosophies and can readily adapt to market forces ( Working with medical care givers on a direct basis has proven to be an important part of the scheme (

The Milliman Report highlights two aspects of Cost Plus Insurance to which  cost plus proponents must find solutions  in order to succeed  in the market: (1). High fees charged by some TPA’s / Audit firms and (2). Competitive stop loss cover. provides valuable information for plan sponsors who are considering this approach to controlling health care costs.

For a copy of the Millman report, write to