Case Study: Maintaining Competitive Position
A large New York City health organization was determined to minimize expenses for health insurance, without cost shifting to employees or implementing a severe reduction in benefits.
Solution
Over the past eight years, Cammack LaRhette has partnered with the health organization, and together we have been successful in maintaining the organization's competitive position for benefit plan design and cost among New York City metropolitan area healthcare organizations.
In the course of our relationship we have used benchmarking and the client's own data to make plan design changes and negotiate the most favorable arrangements with vendors. This activity has resulted in significant cost savings for the organization. For example, Cammack LaRhette Consulting renegotiated the Rx Alliance PBM Program last year, and in the prior year we renegotiated the client's health insurance carriers' fees. Both of these renegotiations resulted in lower costs, without reducing benefit levels in the plan. Other initiatives in recent years include the introduction of a comprehensive patient management program, clinical Rx programs and strategies to increase generic utilization, and plan design to support use of the health organization's facilities and providers.
During the past eight-year period, the cost saving programs have generated $11,350,000 in savings for the client. This saving has enabled the client to keep rates significantly below trend for comparable organizations in the same marketplace, without sacrificing employee benefit levels.
Cammack LaRhette Consulting conducts an annual survey of the New York City metropolitan area healthcare marketplace. Measured against its peers in the 2008 Greater NY Hospital Association Survey, the client's total medical and Rx cost per employee per year (PEPY) amounted to $8,145.50, versus a median cost of $9,521.00 and a maximum cost of $11,832.41.
