This is a true story.
The graph above shows how a plan can lower their cost and increase benefits at the same time by following common sense risk management strategies. This case did just that for three years in a row.
Then something happened.
In a well planned and bloodless coup HR seized oversight of the plan from the CFO who was new and who had replaced the old one. Their outside freelance consultant was delegated to the proverbial basement without a telephone. Out-of-contract claims were routinely approved costing the plan more than it would have otherwise. A $500,000 in-patient hospital claim at M.D. Anderson (Houston) was approved when it could have been done at M.D. Anderson (San Antonio) for less that half that.
The health plan became an entitlement, not a health plan. Emphasis was placed on the greater good for the smallest number rather than the greatest good for the greatest number.
Plan cost skyrocketed, Reserves evaporated. Deficit funding drained the general fund, monies that could have been better spent on other pressing budgetary needs.
Consultants who continue to accept pay when clients stop listening is more common than you think. They are dishonest conniving beasts your mother warned you about.
The now frustrated consultant did something most would never do (there are exceptions). He fired his client.
