ADVERTISING FIRM’S SUCCESS

The Great investor Charlie Munger, vice chairman of Berkshire Hathaway, once said, show me the incentive, and I’ll show you the outcome.

Consider the incentives that exist in a “fee for service” health plan. Providers and hospitals are incentivized to provide services in order to maximize their fees. Is it any wonder that costs continue to rise?

By changing their provider’s incentives, this small advertising firm was able to reduce their claim spend by over $370 per member per month. As a result, renewals have been under 2% for the last three years, and employee satisfaction with the plan has skyrocketed.