Success Stories: Case Studies
Case Study #1
Challenges
Our client, a $2.5 Billion company with 21,000 employees and facilities
across 15 states, was facing 18% annual increases in health plan
expenditures and their carrier’s inadequate provider networks in
outlying locations.
Approach
A.J. Lester & Associates helped our client identify high cost and
problem locations where direct provider networks would have immediate
impact. Working with corporate and local management, we targeted
hospitals and physicians with which to directly contract based upon
historical utilization and employee preference. By using assertive
negotiating techniques, attractive contractual terms, and aggressive
reimbursement terms, we secured direct agreements with targeted
providers and developed customized networks in communities where
employee and dependents live. As our client’s experience grew and
success with direct networks was realized in the initial locations,
a corporate strategy to have direct networks in all company locations
was implemented.
Results
With over 45,000 covered lives in their direct networks, our client’s
annual cost increases dropped from 18% to less than 1% and have
remained flat for the past three years. Medical plan costs per-employee-per-year
are running 35-40% below the national average. While the cost of
developing its own networks was considerable, our client conservatively
estimates that its return on investment from direct contracting
has surpassed 30:1. Back >
Case Study #2
Challenges
Our client, a privately-held company with 5,500 covered lives, has
production and distribution facilities in twelve states. With many
employees residing in small towns and rural areas where PPO networks
were either insufficient or unavailable, health plan costs were
escalating and indemnity options were no longer viable. This employer
wanted to offer managed care to its employees, but only if all employees
could have access to it.
Approach
A.J. Lester helped our client by developing direct provider networks
in outlying areas in which PPO networks were untenable. Though our
client has limited numbers of employees in many areas, we still
set up strong contractual relationships with local doctors and hospitals
that were enthusiastic to do business directly. The agreements and
financial terms established with providers in outlying areas became
the model for broader network development, including in major metropolitan
areas in which our client also has employees. Today, employees in
all locations have access to directly contracted network providers.
Results
After direct networks were established, our client reported a 20%
reduction in claims costs and, since then, has reported annual decreases
in plan costs without having to change plan design or raise employee
contributions. Medical plan costs per-employee-per-year are running
at least 40% below the national average. Employees enjoy a high
level of satisfaction with the direct networks and our client’s
provider relationships remain strong and stable. Back
> Case Study #3
Challenges
Our client, a Fortune 100 company with 35,000 employees across the
U.S., found that the proprietary PPO networks offered by its insurance
carrier were insufficient or unavailable in many outlying and rural
locations. Our client’s indemnity plan costs in those locations
were skyrocketing and employees were dissatisfied with the lack
of a managed care benefit.
Approach
A.J. Lester identified client locations across six states in which
directly contracted networks could be implemented. Using proven
negotiating techniques and contractual tools, we facilitated direct
agreements with medical providers to serve nearly 5,000 employees
and their dependents. Our client continued to offer its insurance
carrier’s PPO networks in most locations and utilized a third party
administrator to process claims from its own networks. There were
no conflicts between the carrier’s PPO networks and those owned
by our client.
Results
In addition to reducing overall claims costs in all locations in
which direct networks were implemented, our client was able to satisfy
the needs and wants of its employees by giving them access to managed
care benefits where they were previously unavailable. By combining
its own networks with those administered through its insurance carrier,
our client succeeded in providing network access to more employees
in more locations. As a result, our client’s return on investment
far exceeded initial expectations and provided impetus for further
direct network development. Back >
|
