Comstock's magazine 0919 - September 2019 | Page 43

But for smaller companies and for big companies that have
all or most of their employees here, one of the narrow-network
HMOs that dominate the Sacramento market nearly always
comes out cheaper, says Chris Bender, vice president of ben-
efits at Bender Insurance Solutions in Roseville. HMOs offer
better prices than all but the most aggressive reference-based
plans, those that start very low, at levels like 125 or 150 per-
cent of Medicare, says Bender. But those aggressive plans can
cause problems of their own, ending in hard negotiations with
health care providers and unhappy employees who are more
likely to get surprise bills from their doctors.
Benefits experts say any plan needs to be tailored to a
firm’s size and employee demographics. But the price pres-
sures mean it’s more important than ever for firms to regularly
reassess how they’re paying for coverage to spot ways to save.
Avery, of Innovative Broker Services, for example, is working
with a 5,000-employee client trying to save money on phar-
macy benefits. In researching the company’s current plan, he
discovered drug companies are paying the firm’s pharmacy
benefits manager — a company that acts something like a
pharmaceuticals distributor for self-insuring employers and
insurers — more than $500,000 in rebates, which the manager
hasn’t passed along to Avery’s client. If the client heeds Avery’s
advice, that practice is about to end.
A few recent developments could indicate that a Godzil-
la vs. King Kong moment is approaching — when the pricing
power of giant health care systems meets the purchasing
power of giant buyers. In March, Amazon, J.P. Morgan Chase
and Berkshire Hathaway announced the formation of a new
company to contract directly with hospitals and clinics that
provide high-quality care at lower cost. Since the three com-
panies have 1.2 million combined employees, the announce-
ment shook the health care world — health care stocks shed
billions of dollars when word of the venture came out in Janu-
ary, according to reports.
Follmer is skeptical that will do much to cut costs, given
how little success already-huge health insurers like Aetna and
UnitedHealthcare have had in checking cost growth. He has
more faith in big employers banding together to do something
different: start or acquire their own provider networks, in
much the way that one iconic industrialist launched his own
health system to serve shipyard workers during World War II.
“What would be really innovative is a new Kaiser,” he says. n
Steven Yoder writes about business, real estate and crim-
inal justice. His work has appeared in The Fiscal Times,
Salon, The American Prospect and elsewhere. On Twitter
@syodertweet and at www.stevenyoder.net.
September 2019 | comstocksmag.com
43