Benefits managers who rely on their health plans to keep costs down are bound to be disappointed. Despite health plans’ protests to the contrary, realizing a percentage of total expenditures is an incentive to make healthcare cost more, not less. The largest insurance companies have been among the market’s most profitable performers, with almost 500% average health plan stock price growth since 2009. Until health plans are at financial risk for better health outcomes at lower cost, reducing total spend will continue to translate to reductions in net earnings, a result clearly at odds with their business interests.

So for now, benefits managers interested in driving greater efficiencies are on their own. Their most promising opportunities are programs that deliver strong returns in health outcomes, productivity and savings. They can use their core plan for the basics. But then they can go around many of its programs, directly engaging instead with proven high-performance solutions compared to conventional health plan management.

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