Health Benefit Cost Containment: Controlling the Uncontrollable. David Carrell, REBC, CLU Area Senior Vice President [email protected] www.gallagherbenefits.com. Agenda. History of Health Benefit Costs Cost Drivers Who’s to Blame? Funding Strategies Strategies for Cost Containment
Ten Years of Trend
Average Life Expectancy
New York Times
“Cost of Health Insurance Rises Again,
but at a slightly slower Rate”
September 12, 2007
The proper choice of funding vehicle is integral to the cost-containment process but is not itself, a cost containment devise.
Each funding vehicle must account for the components of health benefit costs; claims, expenses and incurred claim liability.
“We will either find a way, or make one.”
Assumptions: $5,000 medical claim, $250 calendar year deductible, $1,000 out of pocket limit, 90/10 coinsurance, 11% annual trend
“Everybody wants to go to heaven but nobody wants to die.”
What are the wellness initiative basics?
“One who attempts nothing will probably achieve it.”
“Doing nothing is very hard to do…you never know when you’re done”
“If you don’t change your direction, you might end up where you’re going.”
Identify and record baseline data related to program changes:
Top 10 disease categories
Generic vs brand name Rx utilization, etc.)
Employees’ natural resistance to change
“All for one and one for all”
Member Units’“Premium $”
Interest Earned on Cash Flow