“While flattening the curve of COVID-19 infections will save lives, flattening the inflationary curve of employer-sponsored health plans will save businesses. Luckily, both are possible,” reports Donovan Pyle, CEO of Health Compass Consulting.
Given the uncertainty we all face, one thing is sure: Businesses need to take extensive measures to improve operating leverage and cash-flow NOW. Before layoffs and other draconian measures are considered, companies would be wise to pull a lever often overlooked by Chief Financial Officers — their company health plan.
Companies who embrace health plan innovation benefit from improved cash-flow, margins, and operating leverage — all of which are desperately needed at this time. The four Steps for Flattening The Curve include:
Stop Ignoring Operating Expenses: the first step toward change is recognizing that health insurance inflation is hurting your business and its employees. If your company hasn’t experienced a meaningful reduction in health plan costs in the past 5 years (without increasing employee costs), you might be missing an opportunity. If your company has never been presented with these savings opportunities, it’s probably because you’re working with a selling agent.
Stop Working with Selling Agents: when buying a home, you wouldn’t hire the selling agent to help you negotiate the purchase price, would you? Of course not. And yet, many businesses work with Benefits Brokers who accept undisclosed payments from Insurance Carriers — the more you spend, the more money these Brokers make. Fixing our broken system requires businesses to hire Registered Employee Benefits Consultants who disclose all forms of income allowing them to sit on the same side of the proverbial table as their client. Only then will companies receive the objective expert advice desperately needed to drive down costs and improve benefits.
Stop “Punting” to HR: while HR plays a vital role in plan implementation, to achieve financial results, many companies need to fundamentally change the way health plans are financed. This requires engagement and buy-in from company executives with profit and loss responsibility.
Stop Thinking in 12-Month Cycles: does your company plan on being in business 5 years from now? If the answer is “yes”, then they need to stop making tactical decisions about one of their largest expenses every year. Instead, work with your Registered Employee Benefits Consultant to develop a multi-year strategy that consistently reduces financial risk.
While this level of engagement isn’t for everyone, growth champions and performance leaders who take action will gain a competitive advantage.