Doctors know medical care. But providing care is just a portion of what it means to run a practice. They also accept and manage health insurance claims from patients and carriers and they provide (and pay a lot for) their employees’ medical care.
Then why do so many doctor practices have expensive or low-quality health insurance for themselves and their staff?
Small Business Versus Large Business Insurance Options
Many medical practices are modestly sized enterprises. And like most small business in the United States, affordable, decent health insurance simply is out of reach. That’s because small businesses owners and entrepreneurs don’t get the same tax advantages that large corporations often get for purchasing health insurance. They also don’t benefit from sizable risk pools.
Here are the two fundamental differences, without getting too far into the health insurance weeds. Most small businesses (like medical practices) purchase small group plans, which are managed by health insurance companies and tend to be expensive, one-size-fits-all types of plans with unpredictable premium increases year over year. And then there is the unfortunate rule of numbers. Small businesses have fewer employees and, thus, a smaller risk pool, so a single sick employee can cause premium prices for the next year to climb quickly.
Large businesses often go with self-funded plans, which tend to be more customizable and predictable than group plans. Generally speaking, self-insured employers pay for claims out of pocket when they arise as opposed to paying a predetermined premium to a health insurance carrier for a small group plan. Also called self-insured plans, they often only make sense at large enterprises as a means to control their healthcare spending because they have a much greater risk pool. They get cost benefits if employees are healthy and costs don’t tend to fluctuate as much if a small number of employees require extra medical care.
How to Access Affordable Health Insurance
Here’s what we know today: Health insurance costs continue to climb. Health insurance premiums averaged $7,470 for single coverage and $21,342 for families in 2020, according to the Kaiser Family Foundation. This trend is expected to continue, with small group rates estimated to increase by more than 10% in 2022 versus the prior year.
And all the while medical practices continue to struggle with challenges brought on by the COVID-19 pandemic – from increased expenditures for things like staffing shortages to safety equipment and digital telemedicine infrastructure to challenging reimbursement rates for COVID-19-related testing and telemedicine visits.
We also know that benefits are a key factor for attracting and retaining talent – especially in a tight job market like the one we’re in today. And when your medical practice thrives because of the great customer service and clinical staff you have retained.
What can physician practices do?
First, don’t despair. There are options out there that are right for you.
Second, consider some nontraditional health plan options – meaning, go beyond the typical big name health insurance companies. Decent, for example, is a PEO that offers affordable health insurance, payroll and other HR benefits specifically for small businesses.
We do this by banding together small business of like industries (like medical practices) to purchase healthcare. This allows our clients to benefit from those self-insured rates previously only available to some of the largest U.S. companies. Because we manage our own health plans and, unlike other PEOs, we also can customize them for our healthcare clients.
The result: our plans cost up to 35 percent less than currently available options.
Offering employees health benefits is one of the best investments small business owners can make. Research your options and find a plan that aligns with your goals and your budget.