10 Healthcare Best Practices for Self-Insured Employers
- finHealth Media
- Mar 4, 2025
- 6 min read
As a self-insured employer, you owe a strict fiduciary duty to your employees and their families to act in their best interest in the management and oversight of your organization’s health plan. Add to that the complexity of running a $10 million, $50 million, or even $100 million “healthcare business” within the confines of your core business operations, and you get a sense of the daunting task faced by senior leaders in benefits. While you may have “help” via your broker / consultant, or even your payer, their financial interests are not always aligned with your plan or your members. Below, finHealth provides 10 Healthcare Best Practices that we see emerging among industry thought leaders and innovators in America’s elite companies:
1. Implement Real-Time Data Analytics – In addition to being tasked as a responsible fiduciary for the company health plan, benefits leaders are tasked with running and overseeing substantial healthcare expenditures. Imagine how difficult it is to run a complex multi-million-dollar healthcare business with NO visibility to the results of your day-to-day operations. Per the Employee Benefits News Survey, only 7% of self-insured employers had seen their own claims data in-house. And in those few cases where data is retained internally, the data may not be extracted at the proper level of granularity to drive true informed decisions. Only by having real-time transparency to healthcare expenditures can the benefits executive make knowledgeable, evidence-based decisions to improve the quality of care and rein in escalating costs.
2. Eliminate “Outliers” – All of the major payers have “gaps” in their networks where they are routinely paying certain providers rates that are 3, 5 or even 10 times the level of competitive market prices. In total, we find that these outliers are responsible for as much as 10%-20% of your overall healthcare costs. Via such means as employee steerage, reference-based pricing, narrow networks, medical marketplaces, direct contracting or even just bringing it to your payer’s attention, these control gaps can be plugged to save significant monies for your plan.
3. Conduct Independent Audits of your Health Plan - We suggest starting with an eligibility audit for dependents and spouses, add in a measure of targeted claim audits including hospital bill audits for those large complex cases. In one disturbing situation, an auditor noticed that their client had been billed over $1.2 million for a couple day stay in the hospital. This was a very tragic medical incident involving a baby born with congenital defects. For the 11 hours of “treatment,” they were charged $1.2 million despite the mother’s decision to hold her baby given that their physicians advised them that there was no chance for the infant to survive. Nearly $1 million of this money was refunded back to the organization due to a skilled hospital auditor who asked the right questions. Do not rely on audits from your carriers. Remember, their financial interests are not always aligned with your plan and your members.
4. Refine Your Plan Design Based Upon What is “Not Working” – In reviewing millions of lines of paid medical bills, we find that plan selection (i.e., high deductible health plan) and plan design do NOT always promote the desired behavior for our plan participants. Surprisingly, in our work at finHealth, we have found plan participants that have gone to the emergency room over 50 times within the same plan year. That is essentially once every week! Even worse, there was zero copayment, deductible or coinsurance. Simply by increasing the copayment to a higher level, some people will stop visiting the ER for non-emergency issues. Disincentivize the health behaviors you want to curtail. Another client at finHealth was having issues with employees in the Midwest traveling 1,500 – 2,000 miles to substance abuse resorts in California and Florida during the cold months of winter. By simply adopting a meaningful pre-certification process we favored, our client was able to save $1 million annually, but more importantly, was able to ensure their members were attending safe and effective treatment centers with licensed personnel.
5. Evaluate Your Payer Contract – There are likely terms embedded in your payer contract today that adversely affect your ability to exercise your fiduciary duties to your employees and their families under your current health plan. We see ambiguities relative to who “owns” the organization’s claim data, restrictions on performing a comprehensive and effective audit, undisclosed payer revenue sources that are impossible to measure or track, performance guarantees that are not independently vetted, and an overall lack of financial alignment between you and the company administering your plan. To tighten these up, use finHealth’s “Five Asks” that should be part of each contract renewal for a self-insured health plan.
6. Promote Health Literacy for your Members and their Families - Most of us are not confident consumers of healthcare goods and services, and gladly defer to our caregiver, health system or payer as to what treatment is appropriate. We are reluctant to ask about relative costs, the preferred medical setting, inherent risks and side effects or alternative treatment options. We defer even though some choices may be far better suited to us based upon evidence of cost, quality, or comparative outcomes. A company called Quizzify has done a phenomenal job of “game-ifying” health literacy for your members, with their knowledge base fully vetted by Harvard Medical School. Check out a quick quiz below:
7. Integrate Health Advocacy / Employee Shopping Tools – We currently have better information to pick out a nice restaurant for dinner than locating a skilled surgeon to treat us for a life-threatening disease. That is an incredibly scary proposition. Only 7% of U.S. hospitals nationwide have achieved Medicare’s demanding quality rating of 5 stars. Further, costs actually paid for common medical services range from 200% to 1,000% of what Medicare would pay for the very same service. Knowledge matters in preserving both your health and your financial wellness. Solutions are available to help your people navigate the complex healthcare ecosystem. They can locate convenient, high-quality providers for routine diagnostic procedures and identify highly skilled “centers of excellence” for those conditions where there may be few providers in the country that are truly experts in that treatment. Find a solution partner that enables you and your members to identify “top notch care at a fair price.”
8. Create Relationships with Health Systems in your Top Geographies – Most organizations have geographic pockets where they have at least 500 – 1,000 employees and/or members located. Their company names are well-known in the community, and they have strong negotiating leverage with the local health systems that is often not being exerted. Working with your payer and health systems jointly, you may be able to negotiate more aggressive rates for common healthcare treatments than by remaining silent. When companies exert their considerable financial muscle, they can often extract another 10%-20% discount, particularly on routine treatments such as medical imaging, common endoscopies, and simple musculoskeletal procedures. Do not be afraid to flex your financial muscle to save money, gain better service for your members, or increase their quality of care.
9. Tap into Medical Expertise - If you are lucky enough to be an organization that already has a chief medical officer, consider yourself fortunate. They can play an incredibly valuable role in ensuring that your members receive “top notch care at a fair price.” Even if you do not have one, consider the addition of “centers of excellence” and “medical second opinion” firms to your governance of health plans. Their most valuable role is ensuring that your members are not receiving unnecessary or inappropriate care. Per the Mayo Clinic, a disturbing 88% of initial diagnoses are altered when a patient chooses a “center of excellence” for care. Employees and their families also appreciate the comfort of having their employer advocate on their behalf through a medical second opinion company like Included Health, Pinnacle or Best Doctors. Below is a CNBC article about a Walmart employee who was sent to the Geisinger Medical Center in PA, a center of excellence for spinal surgery. The patient was able to avoid a painful and unnecessary spinal surgery due to a more accurate diagnosis of Parkinsons Disease, saving the Walmart health plan $30,000 for preventing an inappropriate surgical procedure.
10. Network with Industry and/or Geographic Peers – One of the best independent sources of information to help run your healthcare operations efficiently and effectively are your Benefits peers at other similar-sized organizations. Like you, they are tasked with overseeing substantial medical expenditures and have likely developed innovative methods to ensure effective operation. Specifically, organizations sharing your same payer in overlapping geographies make for more appropriate “apples to apples” comparisons of administration costs, medical/pharmacy relative costs per employee, handling of high dollar claimants and a working relationship with local health systems. This networking can be achieved via coalitions, healthcare conferences, trade groups and formal introductions from your benefits consultant or your payer.
It is clearly a work in progress when each and every day, innovative Benefits leaders like yourselves are developing new strategies to ensure that their employee members and their families are receiving top-notch care at a fair price. We welcome your suggestions and insights to add to our “Top 10 Healthcare Best Practices,” so please feel free to reach out and let’s chat further. Contact us at sales@finHealth.com.