The New Open Enrollment: Who Knew Someone Could Make us Feel Excited to Meet About Health Care

The St. Louis Business Journal recently ran an article titled Employers Grapple With Rising Health Benefits Costs.” The article highlights mid-sized firms based in St. Louis that are experiencing double-digit increases and resorting to higher-deductible plans as a result. Perhaps the most important quote in the article is from a VP of a benefits firm: “Once you get past the general negotiations and make sure all the fat is trimmed, companies are looking at cost sharing and increasing out-of-pocket deductibles, but we’ve been doing that for years, and you are only going to cover so much ground.”

Nothing more clearly outlines what David Chase, founder of Health Rosetta Institute, recently pointed out: “There's two kinds of Open Enrollment meetings going on right now. One type done by old-line benefits broker polishing the "pay more, get less" turd. The second type is delivering good news that the best way to slash healthcare costs is to improve benefits. Fortunately, the folks I know are having a great October delivering good news." 

Controlling health care spending requires a shift in mindset. For most companies, health care is the second largest expense after payroll. However, as is often the case, most companies don’t apply the same level of care to their health care spending that they do to other large expenditures. You run a healthcare business whether you like it or not.

We can only apply strategy once this shift in mindset has set in. The old way of managing benefits, which is to say lack of management or lack of strategy, is largely the fault of our own industry getting paid far too well to provide very little value. We’ve brainwashed employers to believe they need to accept less benefits every year and pay more for it. The reality is stark, from 2007-2014 middle-class families’ spending on health care has increased by more than 25%. Other basic needs such as food and clothing, have decreased. Any meaningful wage increase has been stolen by health care inflation (higher premiums, higher out-of-pocket expenses, more cost sharing). The good news is that more and more employers are waking up to this reality and putting in place programs that work: better benefits at far less cost.

The employers that we work with realize 20 percent less spending on health care per capita almost immediately and the most successful are able to realize 40-55 percent less over time. The compounded value of this savings is powerful – employees are taking home larger paychecks, they’re not putting off receiving health care, and we are improving business’ bottom line.

At Simpara, we are inspired by the opportunity to make a difference in people’s lives by helping them make better health, wellness, and financial decisions. We view ourselves as stewards of change for a very complex industry. There is no better reward than seeing smiling faces during open enrollment meetings and knowing that employees are taking home a bigger paycheck. Just last week, a new client emailed us saying: “Who knew someone could actually make us feel excited to meet about healthcare…it’s like they brought us out of the stone ages into the modern-day way of doing things.”

There isn’t a more exciting time to be in this space.