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February 4, 2021
To say that health care costs continue to spiral out of control is an understatement.
In fact, to keep saying it year after year grows tiresome, too, especially when those saying it are unwilling to pursue innovative cost containment strategies that can truly help contain costs. I think the most important step in the process is teaming up with the right broker partner.
If all brokers were the same, my advice would be to use a family member, a friend at the country club or someone from church. If Gary has the best rates for my car insurance and homeowners, surely, he can get us the best health insurance rates, right?
All brokers are not the same. Health care benefits are not the same as personal lines, P&C or worksite benefits.
While some insurance agencies have spent the time and effort to become a one-stop shop for all types of insurance, other brokerage firms have spent enormous capital developing the sophistication and the expertise to take on the very things that are causing the unsustainable rising costs of health care.
Health care costs are rising due to many different factors. Yes, we all blame it on lack of transparency, and while true, it is not the only reason for the rising costs of health care today.
Other factors include, but are not limited to:
- Care providers wanting a bigger piece of the pie. In their attempt to get it, they offer conveniences, which can make care more expensive.
- Specialty medications and orphan drugs. More conditions are being treated with specialty medications and orphan drugs that can cost upwards of thousands to millions of dollars.
- Wellness programs, clinics and concierge services. There are many valuable programs being offered today, but beware the pricey imposter programs that exist.
- Outside interests. Many of the contracts an employer enters into are not in their best interest. Instead, they become a third party to a contract that benefits the other two parties.
These are just a few of the many causes of rising health care costs. You should be having ongoing conversations with your broker about solutions to these problems throughout the year.
Your broker should have solutions to address the multiple causes of unsustainable rising health care costs.
If not, why not?
Finally, I have been in many meetings with potential clients who get overwhelmed by this subject. They don’t understand it, and they rely on their broker or TPA to figure it out for them.
They often sit in silence because they’re worried about looking foolish by asking questions. Your broker should not make you feel that way.
When you have questions, your broker should be able to provide answers. If you don’t understand things, how can you possibly make the best decisions for your organization? And if your broker can’t help you understand the solution, how effective is your broker?
I think that healthcare today requires having a broker partner that is sophisticated enough to bring cost containment solutions to a variety of complex issues. The broker also needs to explain those solutions to you in a way that you understand so you can make the best decisions for your organization.