Self-insurance viewpoints: Employers lead the charge

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In the June 2018 Employee Benefit Adviser cover story, we examine how employers and benefit advisers are turning to self-insurance to rein in costs. Here are the opinions of two leading benefit industry observers for their take on this new paradigm.

Chatrane Birbal, senior adviser for the Society of Human Resource Management:

“At least 41% of private-sector employers reported that they self-insured at least one of their health plans in 2016; this was a 43% increase from 28.5% in 1996.

Driven by increasing costs, employers — especially those that are self-insured — are exploring other healthcare design options in an effort to continue offering desirable compensation and benefits packages as a way to recruit and retain talent.

Employers leading the charge are primarily large self-insured companies, which are adopting various value-based care strategies, bundled payments programs (through, for example, a “Centers of Excellence” program), reference-based pricing, employer-direct-to-provider contracting and utilizing transpar­ency tools.”

Daniel Cobb, vice president of Winston Benefits, a benefit brokerage based in Atlanta:

“I would argue that [self-insurance] is for any business and its leadership that wants to create more stability in managing the expense related to providing health and welfare benefits to its employees.

What we have is a healthcare supply chain problem, and you can’t solve a supply chain problem with insurance. Most employers rely on the current healthcare delivery system, which is rife with artificial prices, lacks transparency and uses insurance products and provider networks to steer employees and exploit their employer’s bottom line. It’s impossible to manage costs, quality, and outcomes, and we have a couple of decades’ worth of data to prove it.”

Read the EBA cover story on self-insurance here.

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