What does this mean? This means that a company is willing to take the risk of the expense of providing health care to its employees. Rather than pay gigantic amounts of health insurance premiums, the company actually pays the bills.
We are self insured here at the Surgery Center of Oklahoma. Our employees have a health savings account. That means that the company gives them a certain amount of money at the beginning of the year and what they don’t spend they keep. The employees love this. The owners of the Surgery Center of Oklahoma love this. How does it work so well? The employees are incentivized to spend very little of the money in their account, that’s how. They are incentivized to stay as healthy as they can in order to protect the balance of their account. When a doctor says, “you need this procedure or this drug,” our employees say….ready?….”..how much does it cost?” Why would they ask such a question? Because it’s their money! Not uncommonly they will say,” well, I’m going to shop around. That sounds kind of high to me.” Not uncommonly the doctor hearing this concern over costs drops their price right there and then on the spot.
Why don’t more companies self insure? Because it’s not the usual way of doing things. Because people working in human resources departments are caught between a rock and a hard place. Anything they do that’s good for the employees makes the owners uncomfortable and mad. Anything they do that’s good for the owners of the company typically makes the employees angry. Best to do nothing or next to nothing. Find a comfortable groove and keep your head down. Fight change at every turn.
This may change. Health insurance companies have played this game with big hospitals for far too long. ”It is simply not sustainable,” as one health insurance company executive told me recently. I think we will see more and more self insured companies. They will be shopping for quality and transparent pricing. They will be looking for ways to incentivize their employees to feel ownership in the health plan. They will cease doing business with the insurance companies that have raked them over the coals for years. Fewer and fewer of their employees will go to the big hospitals for their care. The Surgery Center of Oklahoma will be in a hiring frenzy due to the demand for our affordable high quality of care.
The sooner the better.
G. Keith Smith, M.D.