A manufacturing company with 240 employees in a partially self-funded medical plan had been experiencing several years of unfavorable plan costs increases. Pharmacy expense was considerably higher than norms. High cost providers were being utilized in a significant portion of the population. Several chronic diseases contributed to the increased medical spend experienced in the last few years. The provider networks being used in some areas of employee concentration yielded uncompetitive discounts.

Employee turnover had become a source of increased expense and frustration. The HR staff had so much on its’ plate, it couldn’t get important initiatives underway. The corporate employee communication effort had taken a back seat to other more “pressing” matters. The CEO complained that the company culture had taken a hit with recent financial troubles. Employee morale was down and dissatisfaction with mid-level management was up.


We conducted a formal planning session with the senior management team and three of the supervisors. We establish 12 initiatives everyone felt would help the company start moving in the right direction. Among them were a comprehensive marketing campaign to evaluate other group medical claims administrators (this lead to a vendor switch which significantly improved managed care discounts in all geographic areas and a change in Pharmacy Benefits Managers (PBM) which produced a transparent, wholesale purchase of pharmaceuticals), the implementation of incentives to encourage the employees and their families to obtain research data on medical outcomes and provider pricing prior to elective or non-elective surgery, an aggressive wellness plan including biometric screenings to be tied to employee medical contributions (this groups average BMI (Body Mass Index) was 30), the launch of a quarterly multi-media employee e-newsletter focused on creating a culture of wellness, a new benefits website with carrier connectivity to improve employee communications and reduce HR stress, an online employee survey to access satisfaction levels in a number of areas, a benchmarking project to access the company’s benefit plan and compensation competitiveness, a revamp of the open enrollment and new hire benefits guides, the implementation of day- to- day support for HR issues and questions (this step has resulted in a complete change in hiring practices and procedures which is expected to have a positive impact on employee turnover), and finally a compliance review for HR/Benefits since this had not been done in several years.

At the end of the first year, this client reduced medical/pharmacy spend by 17% over the prior period. Employees have responded favorably to the new wellness program with 82% participation, the turnover rate has decreased by 21% (Supervisors now are a more engaged in the hiring process…this required additional training), and the compliance review produced 4 red flags that needed immediate correction which has reduced the clients legal exposure.

This year, the client intends to further step up adherence with its’ medical advocacy program through plan penalties if engagement levels don’t hit desired targets.

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