Price Alone is Not Effective in Reducing the Cost of Your Benefits Plan

Year after year, most employers adjust their deductible in order to mitigate the annual increase in premiums assessed by the insurance carriers – the pea in the pod commodity game. These increases have added up to over a 100% increase over the last 8-10 years – how long can an employer sustain this cost?

 Employers must, more than ever before, be extremely cost and profit sensitive relative the bottom line. McLaughlin & Smoak follows a formula as an indicator of how to design benefits and work with employers to develop long term strategies that result in lower benefits costs and higher profitability – as well as increased health among employees.

 C = P x U    →   Cost = Price x Utilization

 Cost is a result and nothing an employer can directly change. Prices are set by insurance carriers as they asses risk based on quantity of employees, benefits plan design and the health conditions present in the group – so employers cannot set price. So, what can employers do that will positively impact cost? Focus on UTILIZATION.

 By using evidence based medical prevention programs to identify a health baseline of the employee population, an employer can in fact measure change in chronic disease conditions found in the employees resulting in lower utilization expenses. Heavy emphasis on intervention, health coaching, education and effective communication tools are keys to success.

 Value-based plan designing for the medical, dental and disability lines of coverage work together in tandem with the prevention/intervention programs to create a benefits synergy.

 McLaughlin & Smoak has the tools, experience and partnerships that are necessary to effect a positive change in benefits cost resulting in increased profitability.