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Based on my experience (working around insurance IT during ACA implementation), the best solution is setting performance goals, then rebating some of the saving

by ethbro 8y ago

Based on my experience (working around insurance IT during ACA implementation), the best solution is setting performance goals, then rebating some of the savings to the party for exceeding them. With the rebates tailing off after a number of years. This allows the party cutting costs the flexibility to reallocate now-redundant people directly to problem areas, without having to procure additional funding. The rebates cover the cost of retraining (maybe mandate this for for-profit parties).

throwaway080383 8y ago
Why wouldn't the party simply fire the "redundancies" and pocket the money?
- ethbro 8y ago
  Not-for-profit insurances entities (e.g. Blue Cross Blue Shield) legally can't pocket (in any beneficial way) the savings. Aside from that, there's a huge amount of undocumented knowledge in the field. Given its stability, people can still work 20-30 years for the same company. Given there are always areas who need more people, I can't believe you'd rather have someone who knows nothing than the person with 20-30 years of experience (salary aside, admittedly).
telchar 8y ago
I would dispute that. My experience in the hospital side of same field has been that within the framework of the existing healthcare system it's hard to reduce costs without worsening health outcomes. The costs we can cut most easily are staff, services and supplies. Cutting services reduces revenue, nullifying incentives. Trying to deliver the same services with reduced staff and supplies impacts quality. The jobs that can be cut without reducing quality are the administrative nonsense like dickering back and forth with the insurance company, but those jobs also can't be cut without reducing revenue. It would take a change to the way we pay for healthcare to significantly reduce costs, and/or getting the cost of pharmaceuticals under control. There's a lot of fat in pharma too but that's another conversation.
- ethbro 8y ago
  I believe you. Providers are ultimately the profit center, and insurance operations the cost center.

by ethbro 8y ago

throwaway080383 8y ago

Why wouldn't the party simply fire the "redundancies" and pocket the money?

ethbro 8y ago
Not-for-profit insurances entities (e.g. Blue Cross Blue Shield) legally can't pocket (in any beneficial way) the savings. Aside from that, there's a huge amount of undocumented knowledge in the field. Given its stability, people can still work 20-30 years for the same company. Given there are always areas who need more people, I can't believe you'd rather have someone who knows nothing than the person with 20-30 years of experience (salary aside, admittedly).

telchar 8y ago

I would dispute that. My experience in the hospital side of same field has been that within the framework of the existing healthcare system it's hard to reduce costs without worsening health outcomes. The costs we can cut most easily are staff, services and supplies. Cutting services reduces revenue, nullifying incentives. Trying to deliver the same services with reduced staff and supplies impacts quality. The jobs that can be cut without reducing quality are the administrative nonsense like dickering back and forth with the insurance company, but those jobs also can't be cut without reducing revenue. It would take a change to the way we pay for healthcare to significantly reduce costs, and/or getting the cost of pharmaceuticals under control. There's a lot of fat in pharma too but that's another conversation.

ethbro 8y ago
I believe you. Providers are ultimately the profit center, and insurance operations the cost center.