The self-funded employer market is growing with groups of 50 employees and beyond now entering the market. In fact, according to The Henry J. Kaiser Foundation's 2016 Employee Benefits Survey, 61 percent of covered workers are in a plan that is completely or partially self-funded, a market that has been steadily increasing, up from 49 percent in 2000.
Self-funded employers carry the obvious financial risk for employee healthcare claims rather than paying premiums to insurance companies to do so. As healthcare costs have continued to rise, many employers have sought out less expensive care, particularly on larger ticket items like joint replacements (which in turn has help to spur the medical tourism industry). But there are plenty of savings opportunities available in lower cost, more routine healthcare services too.
What Does That Have To Do With You?
As discussed in a previous Pearls column titled Physicians Contract with Self-Funded Employers , some medical practices are providing services directly to employers in order to cut out the middleman.
How Can You Engage Employers?
First, you have to find them. There are datasets available on the self-funded market (such as through judydiamond.com and the Self-Funded Employer Association) that allow you to identify employers in your area. This data usually contains the names and contact details of the executives in charge of the fund at each employer.
Second, you need to build a plan to offer these employers. Determine what services make sense to bundle. For example, in pediatrics you might bundle the well visits, vaccines, screening tests and average a number of sick visits per year and offer a per-patient, by age, annual charge to cover those visits. Gastroenterologists might bundle consults with colonoscopies and follow up care into one amount. Bundling creates a value proposition for the employer whereby they understand an end-to-end cost for those services.
Layering in telemedicine, instant messaging, and other options will make these offerings more attractive to employers too. Breaking away from a middleman allows for greater innovation. Development of services and offerings are typically stymied by insurance participation due to how those companies do (or do not) pay. The more service-oriented and convenient the models, the better chance you will have of contracting an employer to pay for those services directly.
Third, you need to contact the employers and pitch your plan. Utilizing sourced contacts, send a letter detailing what you have to offer and your prices for each service. In determining those prices, take into consideration the savings inherent in not having to bill out claims to insurance companies, labor costs savings in avoiding administrative busy-work like prior authorizations and pre-determinations (calculated at 14 percent to 27 percent of revenue) (Health Affairs, July/August 2009, vol. 28 no. 4, 544-554). Offering services at a price point equal to or less than what they are currently paying through a claims benefit administration process (the insurance company), is an enticing proposition.
Keep it simple. A friendly, typed letter detailing your program, services or even just your desire to explore options should generate a call back. Don't expect to have all the answers; the starting point should be obtaining an understanding of what the employer needs may be and for them to understand what services – and service enhancements – you may be able to offer their employees. From there, you can build a new program together.