On average, only 15% of the total cost of an employer’s health plan covers fixed costs. The cost of actual care, the medical and drug spend, drives the other 85% of the cost of a health plan. This 15/85 ratio holds true for fully insured and self-funded plans, alike. If your health plan is fully insured, the health insurance company is in full control of 100% of your spend.
Moving to a self-funded arrangement enables an employer to focus on impacting the 85%. These employers are placing the health insurance company in the back seat, utilizing only an insurer’s provider network. There are many levers to use which impact the cost of care. Two of these are:
+ Tailored plan design, optimized for a specific population.
+ Transparent pricing which allows plan participants to lower their cost of care while still using highly rated providers.
Self-funding the health plan grants access to what is driving 85% of spend. This access to actionable data enables employers to reduce their health plan spend as well as the out-of-pocket costs of their plan participants.