We recently took over as the new broker of record for a client with a couple hundred employees and I can’t help but share the experience. They had a renewal proposal in hand from a couple of household carriers in CA (an HMO and a PPO) and they had been working with a national agency –also a household name. When we requested copies of the renewal proposals from the carriers ourselves, the pricing was LOWER than what they had been presented. When we requested clarification from the carriers, we were unable to get a reasonable explanation.
There is none. Unlike just about all other industries, healthcare does not result in volume discounting at least in terms of broker compensation. When a large agency negotiates a profit-sharing contract with your insurer (which can come in various forms), it is simply added onto the premium that the employer is charged. Imagine what would happen if all the players in the healthcare supply chain operated with transparency.
In a recent plan analysis we did for a small client (100 members), we discovered that their plan was paying $90,758 in “other sources of income” for the pharmacy benefit manager that supplies their plan with prescription drugs.
With one simple change, their employees are able to access the same drugs at the same pharmacies – with significantly less cost to the employer’s health plan.
If you haven’t yet learned about the role of spread pricing and rebates in your health plan and how they drive up your costs – now may be the perfect time…
There IS a better way.