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Saturday, January 21, 2012

The Benefits of the Blue Cross S Network in Nashville

As I mentioned on my last post, we are renewing all lines of coverage for the same premiums as we're paying this year; no changes in coverage or cost for the company or our people.  In breaking down the numbers it is obvious that there were three factors contributed to this successful outcome; broad movement to high deductible plans, the discounts of the S network, and good fortune in that we had few high-dollar claims.

Breaking these numbers down further, however, the S network discounts stand out as the real game-changer in our plan.

Just to review, we offer three health plans: a High Deductible Plan with the broader P network (HDP-P), and High Deductible Plan with the S network (HDP-S), and a PPO with the S network (PPO-S). 

For the underwriting period April - November, 2011 here's how these plans performed.  The HDP-P claims were 116% of premium, meaning that we paid 16% more in claims than we paid in premiums. Were this our only plan our premium increase for next year would be in the 33 - 35% range.

By comparison the HDP-S plan performed at 41.4% claims to premium.  Note that this is the same benefits and deductibles as HDP-P; the only difference is HCA hospitals are not providers in this network and those hospital which are providers give deeper discounts.

Finally, the PPO-S performed at 80% claims to premiums.  Were this a standalone plan we would be looking at a 2-3% decrease in premiums at renewal.  Note that the PPO plan gives the richest benefits, and yet outperforms the HDP-P plan due to the difference in discounts.

As we look at ways to continue holding the line on our insurance costs one of our primary concerns should be moving people away from P network coverage.  Our strategy will be encouraging people to move through education. A future strategy could be to unlink these three plans let the premiums "float" to their own levels.
For now we hope to show everyone how a High Deductible Plan and a deep discount network save them more money than staying with their current suburban hospitals and PPO co-pays.  

Wednesday, January 18, 2012

Good News On Insurance Renewal

Last week we met with our broker and learned that we are able to renew all lines of benefits coverage with no increase in cost.  As such we will also opt not to make any changes in insurance coverage. 

This doesn't come as a complete surprise.  We've been tracking our insurance plans' performance all year and we're running about 83% claims-to-premium.  That suggests a good renewal, but our last year with United Healthcare we had 84% and still received a 33% increase proposal. 

This year's good news comes mostly due to two things: very few high-dollar claims and a significant migration from the PPO plan to the High Deductible Plan.  The beauty of these results is that the overall cost of co-pays and coinsurance paid by our people is not significantly higher than last year.  This indicates smarter medical buying on the part of people in high deductible plans. It appears that, in aggregate, both workforce and employer saved money or at least held their costs static.

We will have our usual Open Enrollment period during the month of March.  There won't be much in the way of "new" information other than we'll continue to show people how the High Deductible Plan (and we're going to find another name for it) is the best plan for almost everyone.

More to come...


Wednesday, January 11, 2012

You Say "Stress" Like It's a Bad Thing...

Nobody likes stress.  All the typical language around that word is negative:

"Don't stress me"
"You're stressing me out"
"I'm stressed to the max"

Even the liturgy of my Church has changed to include the phrase, "...and protect us from all stress...". 

Stress is an inevitable part of life so taking the negative energy and turning it into something positive becomes an essential life skill, as well as a career skill.  Several of the Fortune 500 were founded during depressions or recessions.  People do things during stressful times out of necessity that they normally would not have done.  They get degrees and professional certifications, seek promotions, open businesses, change jobs, kick bad habits, get out of bad relationships, etc... because they got "stressed out" of their complacency.

Think of stress like you would a big snowfall.  You can either look out your window in dread, or grab your sled and go play outside. When stress comes your way, embrace it and turn it into a positive force for change.  Turn your anxiety into motivation and do something spectacular.

Tuesday, January 10, 2012

HR Toolkit: Fair vs. Equal

If there is a touchier subject in the workplace than "fairness" I've never seen it.  I'm not talking about "our" workplace necessarily: I'm talking about "any" workplace.  For positive morale the workplace needs to have an overall sense of fairness; that the rules are known and people are held consistently accountable to them in terms of outcomes and consequences. 

The problem with managing an overall sense of fairness is that often people equate fair with equal, and they are not the same thing.  Every person is different and every situation is different if only in nuance.  Sometimes the most common offenders in mistaking equal for fair are HR people.  After all, the laws governing employment practices require that we treat every similarly situated individual in a similar way.  While the law doesn't say that, it does in practice. If you treat two similarly situated individuals differently, and those individuals happen to differ by race, gender, age, etc... (as they naturally do in a diverse workforce), you leave the company open to charges of discriminatory employment practices.

Also, a workplace without considerable consistency leaves management opent to accusations of favoritism.  Two people do the same thing and get different outcomes and people want to know why.  Also your least loyal or charitable employees often jump instantly to the conclusion of favoritism because they don't have all the facts or just because they do that as a matter of habit.

The delicate balance for HR departments is to see each situation in all its complexity and to make good decisions and recommendations on when to depart from policy.  A good example would be when somone reports to work after consuming alcohol.  When confronted, one employee denies drinking while the other asks for help with their alcoholism. An unsophisticed HR department will recommend termination for both because they committed the same offense. After all, "fair is fair", right?

Well, no. That's an equal approach, but not fair.  The more nuanced recommendation is that one person was deceptive while the other was forthright and asked for help.  The "fair" result is to termiate one and put the other into required rehabilitation and on a final written warning. The message to the workforce, as the facts leak out over time (and they always do, usually from the employees themselves), is that management cares about their people. 

And that, HR practitioners, is the right approach.  Do what's right for your people, see past equal treatment to what is truly fair, and see the workforce's trust in you grow over time.

Sunday, January 08, 2012

A Mile Marker on Gender

I'm old enough and from enough of a rural area to have grown up around some (thankfully) old ideas about how people should live. Having been born in 1960 my earliest memories of television were news coverage about the Vietnam war and the equal rights struggles of the mid to late 60's.  I heard my family and friends detestation of race and gender equality protests and legislation.  One of the difficult realities I confronted as a young man was that these people that I love so much were (and in some cases still are) wrong about so many things.

This last week I saw first-hand how far we've come regarding gender.  I had to have a series of tests and procedures at Vanderbilt University Medical Center, mostly related to a bad fall I took back in September and some lingering injury.  Every one of my doctors, nurse practitioners, and ultrasound techs were women, and the oldest was probably in her late 30's.  I received excellent, state-of-the-art care from bright young women who would not have been admitted in medical school had they graduated high school in my youth.

So maybe none of this is ground-breaking news; after all, equal opportunity has been a settled issue for how many decades now?  Still, every so often something shows me how far we've come and I take a moment to feel good about our future as a society.