Some people assume that because Beth Johnson’s brokerage is located in rural Missouri she is at a disadvantage when it comes to designing innovative benefit packages for her clients. They would be mistaken.
Using her deep ties to the city of Sikeston, a small community about 150 miles south of St. Louis, the head of Mitchell Insurance has built a hospital and medical provider network for local employers. In place for four years now, hospital contracts are based on a percentage of the institution’s Medicare rates and have provided Johnson’s clients with outsized savings.
Sikeston’s local government is one of the beneficiary’s. Karen Bailey, the city’s treasurer and HR director, took Mitchell on as the city’s brokerage in 2014, and for the third year in a row now, the city’s premiums have not gone up at renewal time. “It is absolutely unheard of,” Bailey says of the savings.
To negotiate the narrow network’s low rates, Johnson took advantage of a local dynamic. Because they operate in a rural setting, a large portion of the area hospitals’ revenue is dependent on Medicaid and Medicare. “That,” says Johnson, “makes them eager to find and attract commercial paying customers.”
The adviser set up the network for the benefit of her self-insured clients, including those who participate in a group insurance captive. Employers participating in the “community health plan,” as Johnson calls it, incentivize their employees to use the local hospitals. In turn, the hospitals provide deep discounts.
Employees who need a wider range of services than those available in the immediate area also have access to metropolitan hospitals in St. Louis and Memphis. And there is a national network travel plan available to participants, when needed.
The city of Sikeston’s approximately 320 employees took to the narrow network quickly, says Bailey, once the Mitchell Insurance team briefed them on the advantages. “Our employees realized that, if they participated in this network, they’d get the service they wanted at a lesser price and their premiums would go down,” she says.
And with around 90% of the city’s employees already using local-area doctors, “I’ve not yet had anyone who couldn’t find a doctor or a facility within our network to meet their needs,” Bailey adds.
Closing care gaps
One reason for the program’s success, says Johnson, is the way in which it has elevated the quality of care received by the participants. Employees whose employers belong to the group captive, for instance, receive biometric screening at Missouri Delta Medical Center, one of the network’s participating hospitals. If the tests reveal a medical issue, a nurse will reach out to the plan participant. “We have found people with some pretty severe conditions,” says Johnson.
Such proactive screening closes any care gaps and makes it possible for employees to receive treatment at the onset of a condition. Since early treatment leads to better outcomes and lower long-term care costs, their employers benefit as well. So does the hospital, by expanding its patient base.
It “creates stickiness” for Missouri Delta by bringing the employees and the hospital together, says Johnson, who notes that in the long run, by eliminating barriers to care, the network will save even more money for everyone involved. “That,” she says, “is a real cost containment strategy.”
“We think it’s a win-win for everyone,” agrees Jason Schrumpf, Missouri Delta’s CEO. The hospital wins, he says, by getting people to who have never visited to try the facility; employers win because they can offer affordable healthcare locally, and Mitchell Insurance wins by bringing clients a valuable service that differentiates it from other brokers in the region.
As word of the program’s success spreads, new employers have joined the ranks of Mitchell’s clients.
This month, the head of a 70-life group reached out to Johnson after hearing about the provider network.
“I feel sorry for other consultants who are just doing the same old thing. That would be really boring,” she says. “It's exciting to know that you really are delivering value to the client and a real solution.”
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