Risk & Business Magazine CEO/CFO Business Today Magazine Fall 2017 | Page 28

HEALTHCARE CONSORTIUMS
BY: KENT MILLER,
OWNER & CONSULTANT
MILLER-LEWIS
Public Entity
Healthcare
Consortiums
T
he successful creation,
operation and growth of
a public entity healthcare
consortium is a challenging
but rewarding experience
for consultants and offers a number
of advantages for the public entities
themselves. We have worked for over 20
years with such consortia. Ohio has very
favorable regulations regarding public
entities pooling together for employee
benefits through O.R.C. 9.833 and O.R.C.
Chapter 67. More than 60 percent of public
entities in Ohio take advantage of these
benefit programs.
Although this article applies only to the
specifics of a public entity with taxpayer
funding (schools, municipalities and the
like), many of the principles that we have
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successfully applied will be useful in the
private sector or for a nonprofit group,
often through a captive insurance risk pool.
These plans work best for groups with a
minimum of 50 employees and up to 300
employees. Having a common employee
culture where members have similar goals
and can work together to address their
common problem of containing runaway
healthcare costs while providing strong
benefits is also important to a successful
plan.
FLEXIBILITY
Public entity consortia can take advantage
of the flexibility that self-funded plans
offer. Some consortiums do not sell a plan
of benefits but rather a funding approach.
Individual employers have the freedom to
design the benefit plan (or plans) that best
fit their unique needs and can adjust these
plan offerings as needs change. This is
especially important when working within
collective bargaining arrangements.
COOPERATION
Self-funded consortiums allow member
organizations to gain purchasing
power on par with that of much larger
organizations by combining with other like
organizations.
In an allocated-balance model consortium,
an individual member organization’s
claims experience is partially pooled with
that of other members to provide greater
stability for each member organization.
This is accomplished by using credibility
factors based on the individual member
organization’s size.