Client Case Study

Health and Welfare Consulting

$1 million saved in 2006

• Profile: U.S. Subsidiary of Global Electronics Manufacturer
  • Client Size: 675 employees
  • Industry: Electronics Manufacturing
  • Locations: 28 states
  • Funding Type: Fully Insured
• Challenges
  • Large claims accounted for 60% of total claims cost (less than 2% of the population accounting for 60% of claims)
  • No structured Case/Disease Management programs
  • High HMO Capitation expenses
  • Employee contributions used to offset insurance costs
• Strategy
  • Introduce strong Case/Disease Management programs, focus on the high risk population (2% of group)
  • Utilize Precept Health Management Services to manage large claimants
  • Move to self-insured funding to realize cash flow savings
  • Change HMO Capitation program to EPO. Eliminate capitation feature and move to fee-for-service arrangement (leverage positive demographic risk)
• Results
  • Financial savings of 20% or $1 million annually
  • Renewal 13% below current costs
  • Maintained employee contributions and benefits
  • Large claimants dropped from 60% to 20% of total claims cost
  • 4-year annual renewal average of 1.3%