Background For years, a large Tribe in the Northwest experienced mounting frustration by its limited influence on the cost and design of its fully insured health plans. The rigid plan design options did not meet the specific needs of its 750 employees which were spread across four unique divisions. The Tribe's rural location played into the misperception that only a traditional, fully insured health plan would provide access to providers. Though the Tribe's claims history was favorable (3-year average of 87% medical loss ratio), the health plan carriers consistently extended high, double digit premium increases – the last being a 37% rate hike upon renewal!
Unfortunately, the Tribe's broker did not understand the importance of maximizing the Tribe's existing resources. In particular, the Tribe's Contract Health Services Program operated completely independent of the Tribe's CHS-eligible employees and their respective health plans. This lack of efficiency and program integration proved to be a key cost driver in the Tribe's over-payment for health care services.
Recognizing a different approach towards the purchase and delivery of health care was needed, the Tribe assigned our team as its broker. Within 45 days, we identified the exposures that negatively impacted the Tribe's health care and transitioned the existing plans to a Tribe-sponsored, self funded health care model that placed the financial variables and the plan design features back into the hands of the Tribe. With the full support of the Tribe's leadership and working in collaboration with the Tribe's Health Committee, we identified and implemented the following:
- escalating and unsustainable health care premium costs
- health plan options not specific to the needs of the employees
- generic utilization reports provided only a limited, general overview
- lack of detailed claims data prevents identification of clinical needs
- fragmented health care model across multiple Tribal divisions
- no coordination / integration with the Contract Health Services Program
- designed and implemented a self funded health plan
- aligned all enterprise divisions under a single plan
- integrated the health plan with the CHS Program
- identifed all employees / dependents that are CHS-eligible
- applied the CHS Program authorities towards the health plan
- applied all cost containment tools inherent in CHS towards CHS-eligible plan participants
Results The design and implementation of a Tribe-sponsored, self funded, CHS Program-integrated health plan produced immediate and measurable returns. The once fragmented array of misdirected, over-priced health care services has become a comprehensive, population-based health care model that continues to cover both CHS eligible employees and non-CHS eligible employees. Need-driven, proactive medical management has allowed for significant improvements in episodic and chronic disease care management. In hard dollars, the first year savings compared to the previous year's fully insured equivalent was $1.5 Million. More impressively, this savings was realized while the Tribe created and filled an additional 92 full time employee positions throughout the Plan year. Now into its third year under this health care model, the Tribe continues to drive best practices for optimal outcomes. As a result of the decreased and stabilized health care costs, the Tribe continues to diversify its business development, employ more community members and strengthen itself as the largest private employer in the area.