Reinventing the Healthcare System for Businesses With Chris Hamilton

Chris Hamilton

Chris Hamilton is a Partner at Hotchkiss Insurance, which provides business and personal insurance, risk management, and employee benefits consulting. In his role, he leads the employee benefits practice by advising consultants and specialists focused on helping companies improve performance and profitability. With nearly 20 years of experience in corporate finance and insurance, Chris has worked with mid-market, regional, and national employers.

Here’s a glimpse of what you’ll learn:

[2:25] Chris Hamilton’s career in the insurance industry
[6:46] The trends and issues in the health insurance industry
[12:53] What is a pharmacy benefit manager (PBM)?
[16:07] How to rectify the health insurance system
[26:38] Small business health insurance offerings

In this episode:

With rising healthcare costs, businesses struggle to provide valuable benefits to employees. Many entrepreneurs don’t understand the forces driving these costs and the inequities within the healthcare system. How can businesses manage healthcare expenses effectively without compromising coverage?

According to insurance expert Chris Hamilton, escalating healthcare costs stem from industry consolidation, rising provider expenses, and vague insurance company practices. He explains that many businesses purchase traditional fully insured plans, which may involve high premiums and conflicts of interest with insurers. Chris advocates for partially self-funded health plans, in which employers assume part of the risk and gain more control over costs. This strategy enables companies to customize their plans, engage in direct contracting with providers, and offer enhanced benefits at lower prices.

In this episode of Systems Simplified, Adi Klevit interviews Chris Hamilton, a Partner at Hotchkiss Insurance, to discuss strategies for controlling healthcare costs and enhancing employee benefits. Chris shares insights into partially self-insured plans, the role of direct contracts in reducing expenses, and his experience with a direct agreement that significantly cut the cost of surgery.

Resources mentioned in this episode:

Quotable Moments:

"If you'd have asked me 15 or 20 years ago if I would be in the health insurance business, I would have thought you were crazy."
"The number one leading cause of bankruptcy in the United States is health insurance debt or medical debt."
"If you save $1 million in cash flow or on your expenses, you just increased the value of your business."
“Show me a man's incentive, and I'll show you the outcome."
"It's mind-boggling to me that they've got insurance...yet people are filing bankruptcy because of it."

Action Steps:

Understand the root causes of rising costs: Dive into the specifics of your current health insurance plan to identify how rising healthcare costs are impacting your expenses. By understanding these dynamics, like the consolidation and vertical integration of healthcare providers, you can address the drivers of your insurance costs and negotiate better rates.
Consider partially self-insuring: Explore the option of partially self-funding your company's health insurance plan, as this approach allows you to customize benefits while potentially saving on yearly premiums. This method helps reduce insurance costs by giving you more control over claims and mitigating reliance on traditional insurers.
Utilize direct contracts with healthcare providers: Establish direct contracts with hospitals and healthcare providers to eliminate intermediaries and reduce costs. By negotiating directly, businesses can achieve significant savings, often up to 30-50% less than standard insurance rates, making healthcare more affordable for both employers and employees.
Educate and involve employees in cost-effective healthcare choices: Encourage employees to understand and utilize the most cost-effective healthcare options available within your insurance plan, such as nurse concierge services and direct contract facilities. Empowering employees with knowledge and choices can lead to substantial savings and improve overall satisfaction with healthcare benefits.
Leverage expert advice and resources: Access expert resources to navigate the complexities of healthcare insurance effectively. These tools can provide actionable insights and questions to engage with brokers or advisors, ensuring your business is equipped to manage healthcare costs strategically.

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