One of Trion’s strengths is leveraged negotiations with the existing vendors while they fully understand and respect that we have the purchasing power with other vendors to get equal or better rates. This negotiating leverage enables us to first evaluate current providers and vendors and then, if necessary, go into the marketplace to get competing pricing and services. The bottom line is the best price and contract for you.
Competitive Bidding
The process used in Health and Welfare vendor selection includes (1) prioritizing selection criteria, (2) identifying target vendors, (3) proposal analysis, and (4) vendor negotiations. We will evaluate the four critical components of a healthcare plan: access to network providers, cost of the plan, quality management and administration.
Trion’s Vendor Management and Bidding Philosophy
Vendor performance is increasingly important as health care costs continue to rise at unacceptable levels, and we have a two-step philosophy about insurer/vendor marketing’s. The first step is to be initially sure the City of Fort Worth currently is with the best insurer/vendor, which we’ll determine based on:
• Your satisfaction with the incumbent;
• Trion’s analysis of current performance and costs relative to its deep and broad knowledge of the marketplace; and, if appropriate,
• The completion of comprehensive insurer/vendor marketing.
Competition and the fear of losing business or hope of gaining new business are often the greatest motivators to best-practice performance. At the same time, changing an insurer/vendor is typically disruptive and costly, so Trion favors the incumbent relationship—as long as it is equal to or better than the competition.
The second step is then to establish a long-term relationship with the insurer/vendor that maximizes their resources and capabilities in managing your plan costs and delivering employee services. By giving the insurer/vendor confidence about a long-term working relationship, our experience is that the insurer/vendor will “go the extra mile” to meet your expectations. And as long-term strategic initiatives such as an integrated health care, disability and absence management program are implemented, insurer/vendor consistency is more valuable.
However, underlying your commitment to a long-term relationship is continued exceptional performance by the insurer/vendor, which is defined and measured by achieving performance guarantees and by our ongoing benchmarking of market-leading practices. If these guarantees and/or benchmarking targets are not being met, we then recommend a competitive marketing to find the best insurer/vendor for our clients.
Product Placement
When we do perform a competitive marketing, our process includes internal underwriting of the risk based on claims data, trends and internal and external factors so we enter the marketing with a baseline expectation for variable and fixed costs that will be proposed by the competing insurers. Our teams provide the following services as part of our vendor marketing process:
• Development of the RFP questionnaire, incorporating Trion’s analysis of data, objectives, and underwriting;
• Submission to appropriate markets;
• Development of quantitative and qualitative exhibits and models designed to facilitate the decision-making process;
• Incorporation of market responses into detailed presentation of findings;
• Development of additional models and exhibits to work through “what-if” scenarios;
• Selection of finalists and coordination of finalist site visits, presentations and negotiations;
• Reference research;
• Selection of new vendor;
• Implementation of vendor with appropriate plan design, funding and contribution strategies.
Trion’s ongoing financial management and reporting services enable you to know throughout the plan year the likely renewal situation and prepare for incumbent carrier negotiations and proactively take the next steps if the renewal is unreasonable.
Strategic Planning Services
Long-term strategic planning is included in Trion’s core services. Our strategic planning process ensures our cleints future benefits plans and costs align with your current business situation and objectives. Our expertise is in our ability to evaluate current programs, identify inefficiencies, recommend and help implement changes that will reduce waste, and improve the cost-effectiveness of the programs. We have invested in the analytical resources and tools to help develop and implement long term strategies that will reduce year-over-year cost trends by focusing on improving the overall health of the total employee population.
Business Objectives
We begin the strategic planning process using our current knowledge of your programs, coupled with a focused annual discussion about your specific business environment, culture, and human resources goals and strategies. This gives us the ability to identify opportunities or issues, highlight consequences, and work more efficiently to develop unique solutions that meet your specific needs.
In addition, we will provide a benchmark comparison to peer organizations (approximately 3,000 companies to choose from in order to create a custom peer group), as well as local and regional survey data. We use multiple sources to provide meaningful analysis. Additionally, our benchmarking tool allows us to hone in on market- or industry-specific requests, resulting in an assessment that will enable the identification of strategic gaps, at which point Trion can recommend design, funding, and administration changes.
Strategy Development
Equipped with an understanding of the marketplace and your benefit plans and business objectives, the Trion team will help your team create both long- and short-term strategies for the upcoming plan year. The strategy will incorporate both basic and advanced tactics to managing your benefits. Each proposed benefit design change will be accompanied by the financial impact, as well as the qualitative impact to your company. Specifically, the strategy will address opportunities surrounding:
• Financials
• Plan Designs
• Product Offerings
• Vendors
• Funding Methodologies
• Cost Sharing
• Consumerism
• Health Management Initiatives
• Union Plan Initiatives and Strategies (where applicable)
The illustration on the following page, referred to as the Opportunity Pyramid, is the framework we use for determining short- and long-term medical/Rx cost management strategies. We will build off of this framework to develop cost-reduction strategies.
In order to begin this process, we will leverage our purchasing consortium for data collection and analytics services with Verisk Health. The consortium receives preferred pricing from Verisk that’s typically half of the direct, individual employer cost. In addition, Trion uses its Data Analytics Unit to quarterly prepare detailed trend reports and dashboards on the plan financial performance plus the clinical conditions driving costs, with strategies to control/reduce the plan cost and clinical driver trends. The embedded data reporting software develops standard metrics, e.g., a Risk Index that measures the disease burden of the group and Care Gap Index that measures provider compliance with evidence-based medical practices. The detail from our data warehousing tool can go all the way to health conditions, annual cost and utilization and clinical compliance and gaps in care for individual claimants.
With this background information, we analyze first-year plan design initiatives and, in future years, we will start by reviewing any previous results of our Strategic Forecast Model planning process. We have developed this proprietary software tool, Strategic Forecast Model. This interactive tool is designed to illustrate future plan costs, compare them to our client’s affordable rate of cost increases, and identify any “Funding Gap” that may result.
Once we identify a gap, we identify basic and advanced cost-saving strategies and the financial- and benefits-related implications of each.
We utilize the tool to develop a comprehensive three- to five-year action plan that looks at your benefits objectives and environmental and financial constraints. We look at important issues like funding, consumerism, wellness, dependent eligibility and claim audits, long-term contribution strategies, introduction of voluntary and limited medical plans and the cost impact of each.
The interactivity of the SFM allows a clear, yet detailed map with the financial metrics necessary to identify where and how clients save money. Additionally, it provides a solid foundation for periodic updates to ensure the targets are not only realistic but achievable. The Strategic forecasting tool help us with the following:
• Uses your costs and employee contributions by plan to provide a detailed view of expected annual costs based on current and emerging enrollments;
• Gives a high-level overview of employee costs, including their out-of pocket spending and payroll contributions;
• Shows the impact of market versus client-subsidy-target trend results on future annual costs.
The resulting Funding Gap profile and subsequent analysis (including the cost-savings, cost-sharing and cost-shifting required to achieve desired outcomes) informs the creation of cost-management strategies.
In future years, we will update the SFM with the proposed renewal rate action and any adjusted trend factors for the model, and then decide if the initiatives previously planned in the model for the upcoming plan year still are pertinent. Each proposed benefit design change will be accompanied by the financial impact, as well as the qualitative impacts to you and your employees. Specifically, the strategy will address these opportunities:
• Relative and normative value updates
• Product Offerings
• Vendors
• Funding Methodologies
• Cost Sharing
• Consumerism
• Health Management
We illustrate each initiative with the aid of our Strategic Forecast Model. The SFM shows the new financial impact of short and long term (5-year) initiatives while constructing a benefits strategy. The resulting annual strategy will become the foundation for an updated three-year action plan that incorporates a broad, comprehensive look at the client’s overall benefit delivery objectives in the context of specific environment and financial constraints.
Please see below for screenshots of the SFM.
Trion will also perform actuarial services rate projections for annual budgets