How to Increase the Value of Employee Health Benefits Through Self-Funding
Brakebush Brothers Inc., headquartered in Westfield, Wis., uses self-funding to look for opportunities to lower the cost and increase the value of their employee health benefits. Many of these opportunities arise because Brakebush is willing to challenge the status quo in employee health benefits, according to Dan Ludwig, director of benefits and safety.
The status quo for employers typically means that insurance plans own the employer’s health benefits data; providers set their own prices and increase them regularly; and patients have limited ability to judge where to go for care based on cost and quality.
Instead, Brakebush utilized their claims data (a perk of self-funding their health benefits) to find opportunities where they could modify their health benefits plan to lower costs and promote better health outcomes. Employees and vendor partners were included in this process.
The result of Brakebush’s collaborative efforts provided employee health care options that were more easily accessible, less costly and provided high-value specialty referrals.
Support from The Top
Ludwig praises open-minded executives at Brakebush for their support for changing the company’s approach to health benefit costs.
“Employers have to get rid of the status quo,” Ludwig said. “That means employers can’t do it the way they’ve always done it. At Brakebush, we’re given the freedom to explore opportunities. We have to justify every one of these changes, but we’re given the ability to go and explore.”
Ludwig believes that only companies who realize health care can be controlled will be able to achieve flat or lower benefit costs. Employers who are unwilling to challenge the status quo, learn about health care pricing or embrace innovative approaches are unlikely to gain the full benefits of self-funding.
“The lack of understanding in the world of how health care is paid and what impact it has on business has really led us to this problem,” Ludwig said. “Employers have to look at health care and say, ‘We’re done with this.’
“As employers, we control everything else that is on our budget and we hold vendors accountable for giving us high-value products and services. Why are we not holding health care to the same standards?”
Are you an employer searching for self-funded health benefit solutions? If so, Ludwig offers the following tips for you to consider.
Brakebush Brothers’ Top Tips for Self-Funding Results
- Get ready to self-fund. Looking back, Ludwig thinks Brakebush should have had new solutions ready to introduce when self-funding started in 2014, so employees immediately noticed the difference.
- Be willing to change. Employers get the best results by combining self-funding with data-driven changes in their health plan.
- Develop a team of collaborators, internally and externally. Internally, create a team of employees who take responsibility for changing the health plan to focus on high-value health care. Externally, network with peers at other companies and then find vendor partners who are interested in working with you on innovative solutions. Your relationships will make a difference in what you achieve.
- Make sure partners have aligned incentives. They should “win” financially when your company wins and lose when it loses.
- Tell employees how self-funding makes a difference to their out-of-pocket costs. Explaining the relationship between the company’s costs and their health benefit premiums is a great place to start.
- Remind employees of ways to save, again and again. Sharing information at open enrollment is critical, but employees also need reminders throughout the year. If you have an onsite clinic, make sure clinic providers know all the current options for employees to use programs such as Centers of Excellence.
- Use employers’ combined power. Employers’ ability to change how they purchase health care grows when they work together.
Read the case study on Brakebush Brothers for details about their award-winning approach to changing employer-sponsored health benefits.
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Mike Roche
Director of Business Development at The Alliance
Mike Roche joined The Alliance as member services manager in 2015. He is responsible for working with Alliance employers on health benefit strategies; sharing data-based information to help members manage their health care spend; and serving as a voice of member employers. Mike has a strong background in health benefits and self-funding. He previously served as a regional sales advisor for Digital Benefits Advisors in Madison, Wis., where he managed the health benefits for more than 160 credit union clients across 14 states. Prior to that position, Mike worked at CUNA Mutual Group in their employee benefits division for almost 10 years as an employee benefits sales specialist. Mike has a bachelor’s degree with a double major in marketing and business administration and is licensed in both health and life insurance in Wisconsin, Illinois, Iowa, Minnesota, Nebraska and Montana.
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