Innovative Solutions for Rising Medical Care Costs: A Case Study

Problem

A large health system with 1,200 employees was an existing Oswald client. Like many businesses, they began to see costs rise in their traditional employee benefits health plan.

• Double-digit stop loss increases
• Significant high-cost claim activity
• Higher overall cost of care

In addition, the employer struggled with employee retention for care in its own health system due to larger competitors nearby.

Solution

Using analytics and claims data obtained from this client’s usage of its employee benefits, Oswald looked for opportunities to reduce costs without diminishing employee benefits. This required finding creative alternatives to the previous benefits plan. Oswald:

• Integrated the carrier model with a PBM that was not flexible for domestic initiatives and maximized 340b pricing.
• Moved the stop loss layer into a single-parent captive.
• Carved out the PBM to a flexible, transparent partner and implemented custom formulary options to drive utilization to the in-house pharmacy.
• Implemented an independent TPA that enabled the local system to partner with a larger system for tertiary care.

Result

The new plan included richer employee benefits at a lower overall cost. Premium increases are now performing at 0-3%, which is significantly below the industry trend of 7-8%.

The pharmacy benefit manager also offers custom pricing to steer employees toward their own employer, which drives revenue for Oswald’s client. In-house pharmacy utilization is now over 90%.

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