Insanity: Endless Cost Increases Masquerading as “Savings”

“Insanity is doing the same thing over and over again and expecting different results.”

Healthcare costs in the US continue to rise, while the quality of care we receive is the worst among our peers. Yet, year after year, when it comes time to renew, companies across the nation simply rubber-stamp the policies they have, accepting the increases and settling for lesser care. Each year, that takes away more precious funds and resources from your business at rates far exceeding inflation. That is insanity.

For most companies, healthcare is their second-biggest expense after payroll, and while they may manage other budget items down to the hundredths of a percent, they don’t push back when their group health premiums rise 5 to 30% every year. This is insanity. 

Even those who decide to switch insurers can’t be sure they’re getting a good deal. Any “discounts” are just small reductions from already inflated prices. Even worse are “savings” by lowering your rate increase. If your rate increases by 7% instead of 12%, they’ll tell you, “That’s a 5% savings!” 

“Savings” should mean spending less money, not increasing your rate by 7%. But year after year, companies jump for these “savings” with glee. Again, insanity!

Many companies maintain this status quo because, well, it’s the status quo. Big companies feel comfortable being backed by big insurance agencies, despite the ever-rising cost and lackluster care. Smaller firms need to offer enticing benefits, and what looks better on paper than an insurance provider with a national footprint and a gigantic provider network? 

What looks good on paper is not necessarily what’s best for employees, employers, or the bottom line. 

There are smarter, less expensive options that offer higher quality care. By accessing and analyzing insurance financial reports, you can fully understand healthcare usage and costs. This gives businesses the power to do two extraordinary things (that should be more mainstream) — actively negotiate a better, less expensive healthcare plan when it comes time for renewal, or, decide if it’s time to make the move to a self-funded plan. 

Companies that move to self-funded plans save 12 to 18% in the first year. And with the information to truly negotiate a plan that meets a company’s needs with a higher quality of care at a lower cost, it’s possible to actually save money, instead of “saving” money.

It’s time to ditch the status quo. The costs are too high and the quality of care is too low. There are other options out there. Help your business stop the insanity.