Category: Insights

Paying cash for healthcare services can often lead to lower bills compared to using insurance

High deductible plans may not always provide the best deal for consumers and their employees. Research shows that paying cash for healthcare services can often result in lower bills compared to using insurance. Insurance companies negotiate discounts off the retail price set by healthcare providers, but cash pay prices are even lower.

This discrepancy highlights the need for price transparency and better incentives to encourage people to explore lower-cost services.

The time is now. CLAIM YOUR 30 MINUTES WITH JOHN CLAY and get an option for your renewal instead of another year of increase…


In this episode, we discuss:

✅ Lowering Healthcare Prices with Instruments
✅ Insurance Discounts vs Cash Pay
✅ The Need for Price Transparency
✅ tDriving Transparent and Predictable Pricing

Learn how your healthcare plan can help you reach these goals in 2024

OPTIONS INSTEAD OF AN INCREASE… Claim your 30 minutes with John Clay and learn what solutions your company is eligible for in Q4/2023


Connected Planning and Healthcare (For The CFOs)

Increasingly, C-suite leaders are looking to connect their business plans across their finance, workforce, sales, and supply chain teams.

This approach, known as “connected planning,” provides deeper insight into data across the company so that business leaders can get a good view of the whole business plan and not just one piece of it.

Connected planning helps to improve decision-making and identify the right strategy for the business. More CFOs are now partnering with their C-suite counterparts (chief operating officers, sales leaders, etc.) to connect plans across lines of business and give executives better information company-wide.

Now, do you think CFOs should consider the second biggest operational expense in the organization, into their “connected planning” process? (crickets) – That was a rhetorical question.

There is no question about it.

This year, you’ll have to examine if your healthcare plan is part of a problem, or part of a solution to protect your organization from both internal and external threats of 2024.

The time is now. CLAIM YOUR 30 MINUTES WITH JOHN CLAY and get an option for your renewal instead of another year of increase…


The top 4 concerns of the CFOs in 2024 are:

✅ Cutting the right costs
✅ Budget planning
✅ Increasing profitability
✅ Attract and keep the right talent

Learn how your healthcare plan can help you reach these goals in 2024

OPTIONS INSTEAD OF AN INCREASE… Claim your 30 minutes with John Clay and learn what solutions your company is eligible for in Q4/2023


Awkward situation: Commercial Payers Delay Paying Out Claims To Providers

Data reveals that over three months passed without payment for thirty-one percent of inpatient claims submitted to commercial payers.


At the beginning of the year, hospitals and health systems held optimistic expectations regarding their financial performance, anticipating a rebound in revenue and profit margins following a challenging period. However, their financial situation has continued to face difficulties. A recent analysis conducted by Crowe places a significant portion of the blame on commercial payers, citing frequent initial claims denials and various obstacles hindering payments to hospitals.

Examining data from the first quarter of this year related to revenue cycle analytics, the statistics reveal that 31% of inpatient claims submitted to commercial payers remained unpaid for more than three months. In contrast, only 12% of claims submitted to traditional Medicare experienced such delays.

Similar figures emerged when assessing outpatient claims, with 32% of claims facing extended delays with commercial payers, as opposed to just 11% with Medicare.

One particularly striking metric was the rate of prior authorization and precertification denials – rejections based on the payer’s determination that a provider either did not obtain prior approval for treatment or that the treatment was not medically necessary based on the diagnosis. The incidence of these “medical necessity” denials has been on the rise for several years, and the trend persists. During the first three months of 2023, the rate of inpatient claim denials due to medical necessity reached 3.2%, in contrast to Medicare’s 0.2%. In 2021, the denial rate for such claims was 2.4%.

Although the increase may appear relatively minor, a denial based on prior authorization or precertification can trigger a significant battle to secure payment, as noted by Crowe. Providers who disagree with the denial must navigate a labor-intensive appeals process involving utilization management, nursing staff, physicians, and possibly the patient. This effort can be substantial in terms of costs, time, and complexity, often without a guarantee of full payment from the payer.

The time is now. CLAIM YOUR 30 MINUTES WITH JOHN CLAY and get an option for your renewal instead of another year of increase…


The Outcome

Within the realm of claim denials, the category of prior authorization and precertification denials forms a subset of a broader metric encompassing initial denials. In the first quarter of 2023, commercial payers initially rejected 15.1% of both inpatient and outpatient claims for various reasons, while the comparable figure for Medicare during the same period stood at 3.9%.

Although most claims initially denied by commercial payers eventually get resolved and paid, the administrative efforts required to turn an initial denial into a positive outcome impose substantial costs on providers, as confirmed by Crowe. This process necessitates active involvement from the provider to secure payment for the services rendered.

Another category of claim denials contributing to payment delays from commercial payers pertains to requests for information (RFI). RFI denials occur when a payer chooses not to process a claim due to the absence of essential documentation, such as an attachment, signature, or a copy of the medical record.

In terms of numbers, commercial payers exhibit a denial rate that is 12 times higher than that of Medicare. In the first quarter of 2023, the RFI denial rate for inpatient and outpatient claims submitted to commercial payers by providers was 4.8%, in contrast to Medicare’s 0.4%. Crowe notes that an RFI denial can prolong payment by at least 45 days, impacting cash flow and accounts receivable performance adversely.

OPTIONS INSTEAD OF AN INCREASE… Claim your 30 minutes with John Clay and learn what solutions your company is eligible for in Q4/2023


Business Lexington – July, 2023 – John Clay, BetterSourceBenefits

Breaking Through The Benefits Status Quo

Download the full article here >>

In the 1990s, while working as a benefi ts advisor for Blue Cross Blue Shield of Kentucky, John Clay realized he could do more to help his customers. Over the course of the decade, Blue Cross Blue Shield of Kentucky eventually transformed to become Anthem Blue Cross Blue Shield, transitioning from a mutual company owned by policyholders to a publicly traded company owned by stockholders. 

This change didn’t sit well with Clay. Feeling unsatisfied with simply working out renewal programs with a limited number of insurance companies, Clay joined a “mastermind group” of advisors from across the country who were dedicated to making a difference in the lives of employers and employees.

“I already had a background in inventory control and material management. So, we started managing the healthcare supply chain,” Clay said. “We put our custom-designed plans that were in the best interest of employers and their employees in a fiduciary or legal and ethical way.” 

In 2000, Clay, who graduated from the University of Kentucky Gatton College of Business with a degree in supply chain management, founded Better Source Benefits, a boutique healthcare benefits agency based in Somerset. Better Source Benefits operates throughout Kentucky, Ohio, Tennessee, and New York. His clients range from companies with as few as 100 employees to those with as many as 5,000 employees. 

Clay primarily serves the construction, energy, and manufacturing industries, as well as nonprofit organizations such as city and county governments. 

Clay prefers to be known as a strategy expert rather than a consultant, believing that companies need targeted strategies to break free from the status quo of rising premiums and diluted healthcare options found in many employee benefit plans. 

“Better healthcare outcomes with less risk and lower prices are what companies need,” Clay said. 

Three insurance companies dominate Kentucky’s healthcare benefit marketplace: Anthem, United Healthcare, and Humana. Recently, Humana announced its withdrawal from the Employer Group Commercial Medical Products business in the state. Clay urges CEOs and CFOs to take a more active role in selecting employee benefit plans rather than leaving it solely to the human resources director. He highlights this scenario in his book, “Breaking Through The Status Quo.” 

According to Clay, the average business owner is often uninvolved in benefit sales conversations. And while the CFOs focus on the profit and loss statement, they rarely discuss the strategic aspects of benefits plans with the HR director. As a result, the cost of available plans continues to rise, but the CFO may not recognize opportunities for improvement. 

Clay refers to this situation as the Status Quo scenario. 

In “Breaking Through The Status Quo,” author John Clay outlines alternatives to the rising premiums and diluted healthcare options found in many employee benefit plans. 

Clay said that inflation is also among the greatest challenges facing the employee benefits market in 2023. Healthcare inflation has consistently outpaced general inflation over the past 50 years, making it difficult for the employers to meet the growing demands of employees seeking more robust benefits packages, he said. 

Additionally, the employee benefits marketplace faces challenges related to the lingering economic effects of COVID-19, increased usage of prescription drugs, mental health and substance abuse issues, and advancements in medical treatments and technology. 

All of these factors lead to higher cost and diminished benefits for employees, Clay said. 

“The term Affordable Care Act is a misnomer because it is anything but,” he said. “Look at the minimum wage for some people. It may be $15 an hour or about $31,000 a year. If their insurance deductible is $3,000, that’s about 10% of their gross wages and their out-of-pocket could be $5,500 to $8,000. Then they are functionally uninsured with many of the “off the shelf” ACA plans unless they have subsidies.”

Clay cites a recent survey that found more than half of the respondents said they could not afford a $400 emergency room charge or any other kind of financial emergency. Few could afford a catastrophic event. 

“You have a huge percentage of the population with medical debt.” Clay said. “Better Source Benefits is focused on reducing or eliminating medical debt through employee plan design and solid supply chain management.” BL



OPTIONS INSTEAD OF AN INCREASE… Claim your 30 minutes with John Clay and learn what solutions your company is eligible for in Q4/2023


First Year With A Self-Funded Healthcare Plan: What To Expect, How To Prepare

Recognizing that you are into a Strategic vs Transactional solution means positive change is around the corner.

While self-funding a medical plan is (almost) always a wise financial decision, it does present challenges and new opportunities to direct the course your plan will take.

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How Insurance Companies Hide Profits

Fully insured health insurance companies and HMOs are exceptional at playing Hide and Seek, with profit margins hidden in the premiums. Besides the guaranteed profit margins of the Affordable Care Act (15-20% of premiums) , its new extra charges and taxes, you have to look really hard to find out where the contingency margins are hiding in the premium calculations – especially when you consider that there is very limited transparency in the actual healthcare renewal calculations. 

Ask yourself – did your employees’ good health and low healthcare utilization send a surplus to your corporate bottom line or to the insurance companies’?

So, where are the good profit margin hiding places in the fully insured premiums? 

Let’s take a peek at the ones hiding inside the employer-paid healthcare premiums – For starters, try looking at these little gems:

  • pooling charges, 
  • These are premiums for Stop Loss Insurance that your insurance company buys from its own reserves
  • Industry Loads on the risk factors
  • These are up charges for your type of industry, created by actuaries that work for  the insurance company
  • medical claims trend factors,
  • These are made up numbers that justify the need ofr more revenue, just like any other business plan 
  • demographic load factors, 
  • These are up charges for your employee mix, created by actuaries that work for  the insurance company
  • pharmacy claims trend factors
  • Drugs Companies adjust their pricing twice per year.  They add and they subtract from these depending on how their drug list is performing to their business plan
  • or the capitation trend factors. 
  • This are charges for fixed cost items like mental health, organ transplants and other bundled medical care that rarely are used but always seem to have an increase

Wait! There is more…

Of course, there are more profit margin hiding places in the retention factors, IBNR reserve,(IBNR, we call it “Incurred But Not Really”) some still use terms like 

  • Rate stabilization reserve,
  • More of your money they keep to offset claims 
  • pending claim reserve 
  • More of your money to hedge against something that might happen
  • and the earned interest rate assumptions built into reserves.
  • That earned interest is never not enough to move the needle for your benefit

Don’t limit yourself playing Hide and Seek with your local fully insured health insurance company or HMO, because the game is rigged against you as long as there’s no financial transparency, profits can be hidden, your company’s good claims subsidize bad risks and you have no way of being rewarded for good claims.

Hiding an elephant in the room has never been easier. But I can make sure it’s not hidden in your healthcare plan.

Don’t postpone your free one-on-one session. Summer is the right season to start.

Click here to arrange a one-on-one meeting with John Clay >>


Mid-Year Employee Motivation

As we reach the halfway point in the year, you may be seeing signs of your team starting to flag. 

Whether it is caused by internal or external factors is irrelevant. The real question is how do you lift your workers out of the mid-year blues? 

There are a few methods available that can break the monotony and inject fresh impetus into your company’s efforts…

With Great Resignation and talent shortage on the market that happened less than a year ago, it’s especially important to make sure your company doesn’t have extra expenses on new talent acquisition, etc. 

SHRM, The Society for Human Resource Management reported that on average it costs a company 6 to 9 months of an employee’s salary to replace him or her. For an employee making $80,000 per year, that comes out to $30,000-$45,000 in recruiting and training costs. 

There are a couple of other numbers that you should consider. 

According to Zippia – The Career Expert agency that performs research – U.S. workers have an average tenure of about 4.1 years with a single employer.

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Activating Healthcare Equity

It is spring and the Oak tree Helicopters are back and into my pool here in Kentucky, and buddy it is a pain to clean those out of the skimmer. As I was busy doing it, a great analogy came to mind…

Not only do most employers swim in polluted healthcare pools, but they choose to! So when did it all go wrong? How did Fully Insured carriers hypnotize the entire market into believing that choosing the “least bad increase” is a win? And most importantly – how did they turn it into the only available option?

In these series of articles and videos I tend to debunk the myth of healthcare, and give employers and their teams a chance to get measurable, predictable, and repeatable results from their healthcare plan.

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Running Finance as a Profit Center

Over ninety percent of the country uses some form of health insurance. As a business owner, you could be mistaken into thinking that it is always a high-value proposition. More and more people are complaining every year about health insurance. Why is that, and what can you do about it?

Let’s talk about what needs to happen to improve healthcare and its associated costs.

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Do You Have the Right Healthcare Partner?

The responsibility of the business owner to its team is a massive undertaking. They have family members, hardships, and expectations, like their staff. As a business owner, you understand both weights. The former is that your organization can actually afford health insurance. The latter, how crucial it is to have accessible, solid coverage for your team.

Employers everywhere are paying more out of pocket for healthcare because of their lack of a proper healthcare partner. Healthcare partners lead by example and strive to empower all businesses. They are at the helm of providing person-centered care and clinical support through health insurance.

If you’re wondering how to choose a healthcare partner and how to save money on healthcare partners, we’ve got you covered.

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