Is Your Health Plan Leveraged?
03/08/2011
By Andrew Fondow
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Fresh out of business school, a young man answered a want-ad for an accountant. He was being interviewed by a very nervous man who ran a small business that he had started himself.
"I need someone with an accounting degree," the business owner said. "But mainly, I'm looking for someone to do my worrying for me."
"Excuse me?" the accountant said.
"I worry about a lot of things," said the business owner. "But I don't want to have to worry about money. Your job will be to take all the money worries off my back."
"I see," the accountant said. "And how much does the job pay?"
"I'll start you at $100,000."
"$100,000!" the accountant exclaimed! "How can such a small business afford a sum like that?"
"That," the business owner said, "is your first worry."
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As I visit with owners of small businesses, I hear two challenges they worry about most:
1. Rising health care costs
2. Raising capital through borrowing from a lending institution
As I considered those two challenges, I dug into my past work experience—first in banking and now in health care. This got me thinking – what if we used the same formulas for our health plan that lending institutions use for our financials?
Ask yourself: Do the liabilities on your health plan outweigh the assets?
If your answer is “I don’t know,” a good place to start is a simple onsite screening or a wellness program like Talk to Your Doc. These are two ways you can not only help employees understand their health risk factors, but also identify potential liabilities within the company.
If you’ve already discovered that liabilities outweigh assets in your health plan, perhaps now is the time to focus on turning those liabilities into assets. This can be done in a number of ways: from disease management to increased employee education (i.e., tips for being a better consumer of high-cost medical procedures and prescription medications).
If your health plan liabilities do not outweigh assets—congratulations! But, do you know how to keep it that way? It isn’t solely about the company’s debt-to-asset ratio; it is also about the personal stake employees have in their own well being. As business leaders, we are charged with creating and maintaining a culture that encourages healthy behavior—we can build companies that turn worries into rewards.
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