The Importance of an Unbundled Health Plan

Buying internet, TV and phone services is usually a one-stop-shop, searching for one provider that offers bundled services. In these scenarios, the provider and the customer usually benefit. Providers will often offer discounts or bonuses to those who purchase more than one service together, such as extended programming for TV or premium internet service, increasing value and saving customers money.

The same is not always true in health benefits. At first, buying a bundled plan can seem easier and more straightforward, but lack of control and transparency can affect cost and employee utilization long term. For example, an employer has no way of knowing how each vendor fee compares to market costs because in a bundled plan those fees are often hidden or combined together.

When a plan is unbundled an employer has the opportunity to contract with specialized companies who manage different parts of the program. By separating services an employer can select the best vendor for each service, gaining transparency and flexibility within their plan to better manage costs.

We have seen significant savings made by unbundling health plans.

Transparency gives you the ability to contract with vendors that better suit the needs of your company, and your people. Transparency also helps identify individual vendor fees, which can then be compared to market costs, opening doors to competitive vendor prices and services. When costs are exposed, employers can better identify what is driving the plan's costs. For example, a pharmacy benefit manager plays a significant role in prescription drug costs and spending. By unbundling this service from your plan you can gain knowledge of how costs are generated, unlocking hidden revenue.

Healthcare needs can vary depending on company demographics, increased flexibility in vendor selection can help you represent your unique workforce. A well-constructed plan, designed with your workforce in mind can better satisfy current employees and attract new ones as well, improving employee retention and recruitment efforts.

The amount of unbundled services an employer selects depends on the strategy chosen. Those who prefer to make smaller changes, slowly over time can. While others can make larger, more impactful changes, sooner. Each benefit program is unique. The strategy that works for your company will not be the same strategy that works for another.

With a strategic plan in place your business can begin to unlock savings by unbundling your health plan. Some services of a plan that can be unbundled are,

  • Pharmacy benefit manager (PBM). A pharmacy benefit manager’s main purpose is to reduce spend and increase access to medication. PBM’s have the ability to negotiate prices with many retailers and manufacturers, giving them the ability to pass discounts to employers and employees. When a PBM is unbundled from a provider, an employer gains insight into what medications are being offered, and how much they cost.
  • Third party administrator (TPA). A TPA is a company that provides administrative and operational services, such as processing claims and complying with regulations. By unbundling your TPA you can gain a dedicated plan administrator who will monitor your plan proactively.
  • Utilization review/case manager. With a focus on utilization, a case manager can reduce costs by reviewing claims made by employees and identifying any services that may not have been necessary. A case manager can also help ensure compliance to regulations.
  • Network. A provider network includes doctors, hospitals and medical facilities that a plan contracts with to provide medical care to members. The providers included in a contract between an insurance company and employer are referred to as “in-network providers.”

At Conner, we work with you to develop a clear, strategic plan that can uncover hidden fees and create flexibility to truly design a plan that your people need. Unbundling your plan doesn’t have to mean making drastic changes. When making any changes to your benefits plan we take the time to analyze necessary data, make recommendations and answer any questions you may have.

Part of our focus when adapting benefits is on employee education. Whether the entire network changes, or only your pharmacy benefit manager. Helping your people better understand their health plan and why those changes were made is crucial to reduce any disturbances.

If you have questions about designing a health plan that better suits your unique workforce, let’s chat! Every company is unique and we can meet you where you are.

2017 Healthiest Employers