Many companies are still learning about the benefits of self-insurance, which is why we wanted to take a moment in today’s blog to break it down for HR and health benefits professionals who may be curious about how self-insurance can create better healthcare outcomes for them and their employees. We’re sharing real-life data points about three self-insured companies (Company A, Company B, and Company C) applying the 10/30 Rule with Apex Health.
Here’s a breakdown of the major data points that can be used to highlight how self-insurance can save money, time, and improve the quality of care:
Understanding Self-Insurance and the 10/30 Rule
Self-insurance allows companies to manage their healthcare expenses directly by covering claims rather than paying premiums to traditional insurance carriers. The 10/30 Rule from Apex Health focuses on diverting unnecessary emergency room (ER) visits. In essence:
- 10% of ER visits become hospitalizations.
- 30% of all ER visits can be managed through preventative care or alternative healthcare services, avoiding the ER altogether.
These insights provide self-insured companies with the opportunity to minimize healthcare costs while ensuring employees receive appropriate care in a timely manner.
Breakdown of Our Key Data Points
1. Company Size and ER Usage
- Company A: 500 employees
- Company B: 2,500 employees
- Company C: 4,500 employees
The number of employees directly influences healthcare costs. With a larger workforce, companies face a higher risk of expensive emergency care visits. By applying the 10/30 Rule, each company can mitigate these risks and reduce unnecessary costs.
2. Population Intending to Use ER Each Month
This represents the percentage of the company’s workforce likely to visit the ER in a given month:
- Company A: 2.14% of the workforce intends to use the ER.
- Company B: 2.06%.
- Company C: 2.08%.
While these percentages may seem small, even a small portion of employees using the ER can lead to significant costs. By diverting non-critical ER visits, companies can achieve substantial savings.
3. Percentage of ER Visits Diverted
The 10/30 Rule enables these companies to divert a substantial portion of ER visits that do not require hospitalization:
- Company A: 43.53% of ER visits are diverted.
- Company B: 37.01%.
- Company C: 30.95%.
The ability to divert these visits to more cost-effective healthcare solutions, such as urgent care or telehealth services, not only reduces costs but also helps employees receive care faster.
4. Annual ER Spend Saved
This is where the financial impact becomes clear. The 10/30 Rule helped these companies save significant amounts on their annual ER spend:
- Company A: $168,386 saved annually.
- Company B: $689,066 saved annually.
- Company C: $1,047,299 saved annually.
These savings reflect how diverting non-critical ER visits directly reduces overall healthcare costs, benefiting both employers and employees.
Benefits of Health Insurance Using the 10/30 Rule
1. Cost Savings for Employers
By diverting non-critical ER visits, companies save on claims for expensive ER care. The data shows that even smaller companies, like Company A, can save over $168,000 annually, while larger companies save even more. For companies looking to cut healthcare costs, self-insurance combined with smart ER diversion strategies can lead to dramatic reductions in healthcare expenses.
2. Reduced Time Spent in ER
Employees benefit from faster access to care. Diverting non-critical ER visits to alternative care options like urgent care or telehealth reduces time spent waiting in an ER. Employees can get the care they need without enduring long waits, leading to better health outcomes and faster recovery times.
3. Improved Quality of Care
Preventative and alternative care methods provide more personalized attention. Rather than relying on costly and time-consuming ER visits, employees can receive the right level of care at the right time. This reduces the likelihood of misdiagnosis or overtreatment in emergency settings, ensuring better overall healthcare quality.
The Long-Term Impact of Apex Health Solutions
For employers, self-insurance is not just a way to reduce costs, but also an opportunity to invest in the health and well-being of employees. The 10/30 Rule exemplifies how a strategic approach can lead to cost savings and better care for employees, benefiting the company in the long run. Implementing such measures leads to higher productivity, reduced absenteeism, and a healthier workforce. By optimizing healthcare expenses through self-insurance and smart healthcare management, employers can create a more sustainable and supportive healthcare system for their employees.
