I don't know any Insurance Advisor, CEO or CFO that can afford not to read this.

A Note from the Desk of Keith Lemer,
CEO of WellNet Healthcare

Stay with me // 3‑minute read.

In the fast-paced realm of healthcare and finance, I aim to shed light on the growth of healthcare costs – the impact it has on you, your people, and the role that you can take to solve these challenges with an alternative lens.

Consider This:

  • We know that the rising cost of healthcare is impacting families across the nation and eating into the profitability of companies that provide healthcare coverage to their employees.
  • By the Numbers: In 1988, healthcare premiums on average accounted for 7.9% of a worker’s total compensation, which includes wages and premiums. By 2019, that had increased to an average of 17.7%, with that figure will approach over 22% in 2025.
  • Employer health insurance has gotten more expensive as healthcare itself has gotten more expensive. The average workplace health plan last year costs $24,000 for family coverage, with employers covering 75% of that expense, according to the Kaiser Family Foundation.

Share of compensation going to healthcare premiums, by income level

Estimated among U.S. families with employer -sponsored health insurance; Annually, 1988-2019

Source: JAMA Network Open

This Brings Us to Our First Question:

  • What is driving all this growth, and where is the money going?

The Driving Force: $4.3 Trillion & The Network Effect

  • Think of healthcare like credit card processing.
  • When these financial intermediaries are at the helm, for credit cards– the ultimate holders of the money and the risk are consumers –and for healthcare it’s the government and employers.

  • The providers of care are doctors and hospitals. The current middlemen, the‘Healthcare Services Companies’, are merely facilitating the transaction and being a middleman is highly profitable.
  • These ‘Healthcare Services Companies’ – facilitate $4.3 trillion dollars in payments that are spent on healthcare every year in America. But let’s look and see what’s really going on here.
  • These Companies can leverage their position as the financial middlemen because of something called the network effect. The power of the network increases as more doctors, hospitals, governments, and employers join.

  • Historically, other networks held tremendous power and resulted in major exploitation. Think of the Railway Robber Barons in the 19th century or cable television in the 1980s, 90’s and early 2000s – with their high prices and terrible service.

  • The healthcare system today operates in a very similar manner. Charging exorbitant fees while providing generally subpar service. Have you ever been on hold and spoken with today’s version of customer service?
  • But all businesses have an Achilles heel, a weakness, and that’s when they become too expensive, or the service gets so bad that people start looking around for a better way to do things. This eventually leads to disintermediation, or disruption.

What Does This Mean for You?

  • Think of how streaming services like Netflix, Hulu, and Apple+ are enabling millions of Americans to cut the cord and stop paying for basic cable.

  • Or how long ago, people in business started using planes, cars, and trucks to go around the railroads. This is exactly what is beginning to happen in healthcare.

  • Disintermediation, or disruption, becomes possible through innovation be it regulatory, technological, or otherwise. In healthcare, this innovation is challenging the traditional healthcare system, as smart minds seek alternative ways to navigate the system.

WellNet’s Role

  • ‘Health Services Companies’ have gotten far too expensive and are far too often providing poor quality services. As a result, some of the smartest minds are looking for ways to lead that disintermediation.
  • WellNet, as a leading Independent Third-Party Administrator (TPA), has embraced innovation within the existing framework. By rebuilding efficient health plans, WellNet offers the same access to doctors, hospitals, and pharmacies (that you know and trust), while delivering bespoke self-funded health plans that focus on controlling the cost of the claim – before it’s paid.WellNet plans are tailored for your unique culture and pace for savings – running at 26% below the cost of those ‘Health Service Companies’, in addition to an overall trend of 3.96% year-over-year.

The Way Forward

In the face of economic headwinds, it’s crucial to consider stepping away from the traditional insurance carrier approach. As your renewal season approaches, I urge you and your advisor to contact us for a proposal. Alternatively, you can schedule a 15-minute joint meeting to learn more using this link.

The landscape of health services is evolving, and WellNet is at the forefront of providing efficient and cost-effective alternatives. We invite you to join us on this transformative journey.

Best regards,

Keith Lemer | CEO
WellNet Healthcare
[email protected]
301-996-1500 mobile direct