In another article, we referred to a life lesson, drawn from the well of experience, we would all be wise to take in and remember:

 

 

If we were to reflect upon the outcomes of our decisions over the years, we would likely find that this lesson applies to decisions both large and small, in both personal and business life.

 

As professional benefit management advisors, we routinely help our clients understand the true costs of the decisions they are making, especially when it comes to the healthcare benefit options they provide their employees. We are responsible to put our clients’ best interests first by investigating, expertly thinking it through and then educating them on the “pros” & “cons” of their particular benefit management options—and the costs involved with making those decisions.

 

Consider a common “money-saving” strategy pitched to employers by group insurance salespeople in order to try and win a prospect’s business—The Consortium. Sadly, we have found that these Sales Pitch Pro’s rarely discuss the full potential cost of this strategic decision. Here’s how it is typically presented:

 

This strategy has been “sold” for many years, but history teaches us that under most management models consortiums are ineffective. There are many reasons, but the most obvious is the simple fact that “the claims are the claims”.

 

Think of it this way: if you take 5 dirty glasses of water and pour them into the same pitcher, what do you end up with? A pitcher of dirty water! The water (your claims cost) doesn’t magically become cleaner by combining the individual glasses, and people don’t miraculously stop having healthcare claims simply because you combined your costs with some other employers.

 

While you may be able to realize slight administrative savings by creating a consortium, national studies show that companies that focus on administrative savings actually end up with higher cost health plans than companies focusing on other plan management areas, such as the health of their employee population.

 

Some of these strategies may initially appear to have merit, but after carefully examining the pros & cons, most of them actually expose the employer to more cost and financial risk or force them to make future health plan management decisions they were not prepared for. We encourage our clients, and all employers, to fully examine the pros & cons of their health plan management options before making decisions, because every decision costs something—and healthcare claims are no exception.