Outside-the-box thinking has led to significant cost savings for The Crowne Group, which has made the self-insured option an attractive choice for Florida employers.

 

"More than four years ago, our consulting team embarked on a research project into the possibility of how onsite medical clinics could have a cost-reduction impact on employer's group health insurance programs," said Ray Tomlinson, president of Central Florida-based Crowne Consulting Group. "We collaborated with our insurance division, The Crowne Group, and began the project with our own client base first, mostly public sector employer groups, all within the state of Florida."

 

Among other successful trendsetting initiatives, the health insurance division established the first health reimbursement account program in the state for Blue Cross Blue Shield of Florida. So when a client asked The Crowne Group to research the feasibility of an onsite clinic program for occupational services, such as pre-employment and annual physicals, drug tests, and light worker's compensation cases, the consulting team reviewed several occupational models already in existence.

 

"We thought the same approach with primary or family practice care could be integrated and perhaps drive the cost of occupational services and health insurance down," he said. "When our research began to prove out this approach, we asked for well-known actuaries to review our process and give us their assessment. This is how we initially became involved and we tasked our consulting division to proceed into further research and eventually implementation."

 

The more Tomlinson and his associates looked into this onsite approach, the more they realized the employer with a partially self-funded insurance program was the ideal candidate.

 

"Since the employer's direct claims costs under this insurance model could be reduced each time a medical service or event came through our onsite medical clinic, we discovered the greater the utilization of services through our clinic, there was a direct correlation of greater cost reductions of health insurance," he explained.

 

The consulting team also started looking at the connectivity between health insurance and organization models and realized the cost of health insurance could be reduced immediately.

 

"We have ideas on how to reduce it even more," said Tomlinson. "The ideal health insurance program will involve either a self-funded or partially self funded approach."

 

They also reviewed the potential impact of the fully-funded insurance model chosen by many employers and found that, while claims costs would be reduced similarly as the self-funded model, the insurance carriers were not open to giving advance credits, even though the actuarial results clearly proved claims reduction and to a lesser degree, administrative savings for the insurer. They also knew that fully insured employers had no control over claims, and that premium increases were dependent on the size of the group and the employer's credibility with the carrier.

 

Crowne Consulting Group began directing their marketing focus to self-funded employer groups.

 

"In that scenario, every claims dollar we could reduce was that same dollar back in the employer's dollar they didn't spend," he said. "Additionally, we've found that of the four components within all insurance carriers claims costs—professional office visits, prescriptions, inpatient costs and outpatient services—where the claims dollars all fall to some degree, we've found the ideal model. If set it up correctly, two of the claims buckets experience immediate decreases when employees/dependents visit the onsite medical clinic. These two buckets represent somewhere between 45 to 58 percent of total claims dollars. This is huge! You can positively impact the cost reduction strategy. In most cases, with just these two components alone, you can more than pay for the cost of the offsite healthcare program and still reduce the cost of health insurance."

 

Of the four claims components, the inpatient portion is usually the largest. Even though there is less frequency of claims, each claim represents higher costs.

 

"If you stay overnight in a hospital, the costs add up quickly," Tomlinson pointed out.

 

Outpatient claims, typically comprised of diagnostic services, outpatient surgical events, emergency room and urgent care visits, also represent significant dollar costs. "Inpatient and outpatient claims will be impacted by comprehensive disease management and wellness programs," explained Tomlinson. "We review all the claims data, and in conjunction with our disease management team and data mining software, we're able to select many participants with pre-diabetic risks or cardiovascular risks, for example, based on history and claims. Then, we begin an active approach to providing assistance to those individuals before they incur a major health event or crisis, such as full onset diabetes or a heart attack."

 

The result, said Tomlinson: the first two buckets are impacted positively. Even though it may take a few months longer for inpatient and outpatient claims costs to be positively impacted, the costs of emergency room and urgent care clinic visits, which are more expensive than a routine visit, will begin to come down right away.

 

"If you go to the ER in the metro Orlando area, by the time you get to the triage counter, the health insurance plan will be charged anywhere between $1,000 and $1,400, before any major services or treatment is rendered," Tomlinson said.

 

The greatest hurdle to overcome for this model is the 'believability and acceptability' factor because of its simplistic and transparent approach to providing medical-related services, said Tomlinson.