Reduce Costs

Wellness Strategies and Disease Management

Wellness is a strategy that leverages behavioral modification programs to enhance employee well-being (physical, intellectual, emotional, social, spiritual and financial) to reduce the prevalence and severity of illness so employees can enjoy a better quality of life and help reduce their health plan sponsor's claims costs. Wellness programs can be effective with the right leadership, articulated strategy and support programs for changing behavior and environment. Without careful planning and strategic implementation, almost half of wellness initiatives fail to deliver on their desired outcomes.

Sibson works with plan sponsors to establish effective initiatives to help employees and their dependents maintain good health so that the organization can thrive. Sibson can help plan sponsors:

  • Facilitate a shared vision and strategy
  • Develop a multi-year plan and maturity model
  • Solicit input from key stakeholders through facilitated discussions, surveys or focus groups
  • Establish metrics to determine achievement of your vision
  • Create a healthy culture in which people can be successful with their personal wellbeing goals
  • Determine priorities for programs to include in your initiative
  • Leverage behavioral economics throughout the design, administration and communication of the program to garner engagement
  • Assess current efforts relative to your maturity model, best practices, employee perceptions and benchmark organizations
  • Design programs and price programs (including a Healthy Enterprise Model)
  • Define requirements, draft requests for proposals (RFPs) and manage the selection process of partners
  • Develop appropriate incentive structures (explicit and implicit) that recognize motivation and align the interests of various stakeholders and employees
  • Align your time off, absence and disability programs
  • Evaluate the impact and value of your efforts relative to the investment made
  • Utilize the “Wellness Results Dashboard” to monitor and track how wellness programs impact plan costs, clinical markers and utilization results.

Time Off, Absence and Disability

Sibson understands that employee productivity directly correlates to the success of the organization. We help our clients with the strategy, design and management of time off and disability programs, including paid time off.

Paid time off includes programs that many employees value, including:

  • Vacation
  • Holidays
  • Personal days
  • Jury/military duty
  • Incidental/sick leave
  • Salary continuation

Disability-related programs, which are integral to an organization’s effectiveness and overall health when properly designed and administered, include:

  • Sick leave
  • Salary continuation
  • Short- and long-term disability
  • Return to work
  • Worker’s compensation
  • Wellness and disease management
  • Behavioral health

Employee support programs include many of the items mentioned above with the addition of employee assistance programs (EAP) and work/life benefits. All of these programs need to be managed within various constructs as illustrated below.

Through our Healthy Enterprise and Rewards of WorkSM research, we understand the important role that disability, paid time off and other leave programs play in establishing a healthy and effective organization where employees and the organization thrive. Sibson’s Healthy Enterprise Initiative creates a healthy environment for employees and their dependents, reducing workforce costs and enabling employees to more completely engage in their work and life. Sibson’s research indicates that successful healthy enterprise organizations experienced the greatest impact on workers’ compensation and extended absence, which included short-term disability.

Effective disability programs focus on rehabilitation and return to work of affected employees. This includes preventative measures such as safety, accountability and risk management, and efforts to promote health through personal and professional renewal.

Every organization has different issues that may affect absence and result in reduced productivity. Sibson conducts research on the many investments organizations make in their employees to better understand how these investments drive attraction, retention, commitment, motivation and engagement. Using our Employee Productivity Framework, we help our clients assess the factors that have the greatest impact on employee absence, health and productivity.

Employee Productivity Framework

The structure and communication of paid time off and disability programs play an important role in the shaping and supporting of an organization’s total rewards strategy. An organization does not need to be unique in all five areas of rewards, but it does need a distinctive value proposition (benefits, compensation, affiliation, work content and career opportunities) to set itself apart.

How Time Off Programs Supports Total Rewards Strategy (Example)

Sibson’s Rewards of Work research found that vacation time is the second most cost effective reward as illustrated in the following table:

Additional Reward Required to Induce 25%, 50% and 75% of Employees to Take the New Job


A good way to determine the success of your paid time off and disability program, and how it compares against other organizations, is through an assessment and/or audit of your current program. Using its Healthy Enterprise and Rewards of Work models, Sibson can help your organization experience positive outcomes in your paid time off, absence and disability programs.

Provider Network Analysis, Options and Contracting

Sibson Consulting works with employers to create health care networks that are cost-effective and comprehensive. We have experience with a variety of networks, including:

  • Preferred provider (PPO) networks, both broad and limited in scope
  • Health maintenance organization (HMO) programs in which primary care physicians (PCPs) are paid a capitation rate, hospitals a per case rate and specialty physicians a fixed schedule of fees
  • Point-of-service (POS) programs in which PCPs function as gatekeepers for all in- and out-of-network care
  • Specialty networks of behavioral health practitioners and facilities
  • Dental PPOs, in which dentists are paid according to a pre-determined fee schedule, or DEMOs, in which each patient selects a primary care dentist who then coordinates all dental care needed by the patient
  • PPO networks of vision providers that offer significantly discounted rates for examinations and a selection of frames, lenses and contacts at reduced prices

Our network analysis services include:

  • Investigating your current network to see if it is comprehensive for your employees' current needs (including hospitals, physicians, skilled nursing facilities, home health, hospice, rehabilitation facilities, physical/occupational/speech therapists, chiropractors and durable medical equipment)
  • Using data to guide employees to Centers of Excellence to improve treatment outcomes and promote patient safety (including all procedures prone to high rates of quality variability.)
  • Investigating why employees are using non-PPO providers
  • Reviewing PPO savings reports
  • Implementing a tiered network concept to steer employees to more cost-effective providers and hospitals
  • Soliciting competitive bids for PPO network options to assure the most competitive rates and best access available
  • Using our proprietary network disruption methodology, which uses five data points to ensure accuracy, and comparing not just the number of providers who will be displaced but the number of services and employees affected by this displacement
  • Helping clients select “Best in Class” provider networks based on discounts and breadth and depth of specialty providers as well as best fit by regions where a high concentration of employees reside

Claim and Dependent Eligibility Audits

Sibson conducts scores of retrospective on-site claims reviews of private sector health plans administered internally or by third-party administrators.

Our consultants have extensive backgrounds in claims processing and review. This experience makes them uniquely qualified to evaluate established administrative procedures, suggest areas for improvement and ensure proper controls are in place for efficient plan administration.


We tailor each audit project to the organization's specific concerns and objectives. We offer an array of services and tools relating to claims adjudication of all plan expenses (i.e., medical, dental, disability, vision and life insurance). They include:
  • Administrative Procedures Review of day-to-day operational processes and claim-control measures in place for efficient plan administration
  • Analysis of Claims Data to determine utilization trends and comparisons
  • Claims System Logic Testing of system capabilities, examiner edits and automated benefit calculations
  • Dependent Eligibility Verifications to identify, report and disenroll ineligible dependents from one or more benefit plans
  • Duplicate Claims Analysis to electronically identify potential overpayments that may have bypassed system edits
  • Electronic Eligibility Review to compare multiple data sets
  • Performance Validation to ensure correct operation of claims-adjudication procedures
  • Periodic Claims Reviews to meet fiduciary responsibilities, validate plan costs, validate that member plan cost-sharing features are properly applied, enforce or implement performance guarantees, address benefit concerns and increase participant satisfaction
  • Post-Implementation Assessments of plan setup, adjudication procedures and automated system capabilities
  • Pre-Implementation Review to assess established procedures and system capabilities of a new administrator or to examine a major benefit revision
  • Specific Stop-Loss Coverage Analysis to confirm appropriate procedures are in place for prompt filing and accurate reimbursement
  • Stratified and/or Targeted Sample selections to manually review the accuracy of sampled payments to plan provisions and industry best practices

Sibson can review your entire claims process:


Dependent Eligibility Audits

Rising health care costs put a strain on every budget. Each year, employers must raise medical plan copays, deductibles, coinsurance limits and employee coverage contributions to help dampen the impact of higher costs. Beyond asking employees to pay more for health coverage and care, what can companies do? A Dependent Eligibility Audit can make a real, and immediate, difference.

Dependent Eligibility Audits help organizations realize substantial savings. Our experience shows that 8% - 12% of the dependents on your rolls should not be there — they simply do not meet your plans' eligibility criteria. Remove ineligible dependents and you can realize significant first-year savings. Use our savings calculator to estimate how much your company can save.

Our administration technology platform and client support model offer a flexible, complete Eligibility Audit administration and communications solution. Below is an overview of our Audit process.


We will discuss and determine the Audit approach that's right for your organization, and determine the details of your Eligibility Audit.

Dependent Eligibility Audit Savings Calculator


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Prescription Drug Benefit Custom Solutions

Rapidly rising prescription drug costs are driving overall increases in the cost of health coverage. Sibson Consulting can help you manage the cost of prescription drug coverage through a variety of services.

These include:

  • Auditing the performance of your pharmacy benefit manager (PBM) to ensure that all contract provisions are being administered correctly and that you are receiving the maximum financial benefit from the guaranteed pricing term
  • Evaluating and negotiating annual renewals from PBMs and insurers
  • Reviewing utilization and cost data to discover ways that you can more effectively provide prescription drug coverage by making plan design changes
  • Providing input and advice regarding changes to the prescription program proposed by your PBM, including the addition of drug management programs such as prior authorization, quantity limits and step therapy; changes to the formulary; or restrictions/expansions in the network
  • Reviewing your contract to evaluate whether the terms are competitive
  • Managing specialty pharmacy costs through utilization and cost reviews, data analysis, formulary management through tiered cost-sharing, clinical management, monitoring high-risk participants and step therapies
  • Reviewing your pharmacy benefit design (copays, coinsurance, etc.) to make sure your plan has the right levels of cost sharing and cost effective drug use incentives
  • Evaluating generic prescription utilization, generic dispensing rates and generic discounts in your current contract and improving generic dispensing rates through aggressive plan redesign and pricing improvements
  • Implementing a tiered plan design using copays or coinsurance
  • Reviewing Average Wholesale Pricing (AWP) costs by checking your plan's contractual language on AWP reimbursement and renegotiating to address revised drug pricing
  • Evaluating carve-out if a prescription drug benefit is carved-in
  • Determining effective long-term pharmacy benefit strategies
  • Analyzing clinical programs to determine the impact and potential advantage for your plan and your employees
  • Conducting PBM claim audits to validate that financial terms are being achieved

Vendor Bidding and Renewal Negotiations

Sibson Consulting works to get the most from vendors for all the clients we represent. We make it our business to know a vendor's history, financial solvency and performance to date, and we bring that knowledge to the table on behalf of your organization.

It is critical that all renewal rates negotiated with vendors are reviewed and assessed to make sure they are competitive and appropriate given the experience and plan design of your organization. Sibson uses a fair but firm approach, based on our technical expertise as underwriters and actuaries, to ensure that you receive the right renewals from your vendors.

Our renewal and competitive bidding services include:

  • Creating custom requests for proposals (RFPs) and analyzing responses in all lines of coverage from insurance companies and the full array of managed care organizations: health maintenance organizations (HMOs), preferred provider organizations (PPOs) and point-of-service (POS) plans
  • Aggressively negotiating vendor contracts so that you receive optimal, market-competitive contracts
  • Reviewing yearly increases in each line of coverage:
    • Medical
    • Dental
    • Prescription drugs
    • Vision
    • Life/AD&D (many of our clients are under-insured)
    • Stop loss
    • Short-term disability/long-term disability
    • Behavioral services (e.g., employee assistance programs, managed mental health review program utilization)
    • Disease management, 24-hour nurse line, data mining
    • Long-term care
    • Voluntary benefits

Funding Arrangements

Some organizations with significant levels of cash reserves can reduce costs by self-funding their health plans or assuming more risk. But before doing this, you must carefully consider the ramifications and protect the plan against ordinary or catastrophic risks.

Sibson Consulting can help you determine if self-insuring or other cost-saving funding arrangements are right for your organization. We can also help plans that are already self-insured evaluate whether self-insuring is still the best choice.

Stop-Loss Insurance

Self-insured organizations can protect themselves against large claims or fluctuations in claims by purchasing stop-loss insurance, which secures insurer reimbursement for expenses above specific or aggregate limits. Sibson can help employers with:

  • Determining the level of stop-loss insurance the organization should buy
  • Evaluating whether the plan needs specific or aggregate insurance or both
  • Deciding whether to include prescription benefits in the policy
  • Developing an RFP and preparing documentation
  • Negotiating policy provisions with the insurer
  • Addressing coverage gaps
  • Monitoring stop-loss market conditions to take advantage of increased competition
  • Negotiating renewals
  • Settling claims disputes

View Sibson's infographic to see key medical and prescription stop-loss coverage facts.

To learn more about stop-loss insurance, read Sibson's recent Perspectives article, "Time To Take Another Look at Stop-Loss Insurance."

Leveraging New Health Technology

Sibson utilizes technology and analytical tools to measure, monitor and predict the costs of health and welfare benefit programs. Sibson has developed a number of pricing tools to help clients assess impact. We customize our technical resources for your specific needs, ensuring that we provide the high level of quality consulting that our clients expect. Sibson is on the cutting edge of health care industry trends and relevant legislation, and we update and revise our tools and technology as needed to provide maximum value to our clients. 

Alternative Provider Reimbursement Arrangements

Sibson can help contain health costs through diligent management of provider reimbursement. As experienced consultants to plan sponsors in the areas of health insurance, managed care arrangements and third party administration, we begin by identifying networks with strong overall provider discounts, efficient administrative systems and robust ancillary program services. From there, we can help reduce or contain costs by managing and negotiating vendor contract terms more aggressively. In Sibson’s experience, it is possible to challenge a provider’s proposed premium renewal after performing independent renewal projections using different methods and assumptions. Frequently, these alternative projections uncover carrier mistakes or non-competitive terms that the carrier will reconsider.

Sibson can help with the following:

  • We closely review vendor contracts and subject them to competitive bids periodically to reduce program costs and/or upgrade services. Sibson often finds a wide discrepancy in the fees charged to employers from the same vendor offering a similar scope of services.
  • We reconsider any fees that may be based on a percentage of savings. Such fee structures can be problematic because billed charges can be inflated and are difficult to validate. These arrangements typically increase fees each year at rates significantly higher than general inflation (e.g., as measured by the Consumer Price Index or CPI), arguably a better benchmark for anticipating administrative cost increases. If a percentage-of-savings structure is the only available option, “savings” need to be clearly defined in the vendor contract and a validation process should be established.
  • We evaluate capitation and bundled payment provider reimbursement arrangements

On-site and Near-site Health and Wellness Clinics

Faced with the need for continued improvement in productivity and hampered by the tight budgets of the economic downturn, employers are taking a fresh look at implementing on-site and near-site medical clinics for employees and their dependents. The cost for implementing and operating these clinics has dropped, and clinics can now be set up on a smaller scale than in the past and require lower capital investments.

This renewed interest is also driven by a number of internal and external factors:

  • Employees face pressure from busy work-life demands making them less willing or able to leave the worksite to seek healthcare
  • Community-based providers are often busy and hurried and cannot provide the attention to ongoing health issues that are not currently acute
  • Network-based providers often are not able to customize their services to the specific needs of employers
  • Chronic diseases are increasingly prevalent among an aging workforce and conditions such as high blood pressure, diabetes, arthritis, depression and high cholesterol require ongoing monitoring and attention to stay under control
  • Employee populations demonstrate an increasing prevalence of serious health risk factors including obesity, stress, lack of exercise and smoking that could benefit from more positive and continuous attention

Adding on-site health clinics can serve several objectives for plan sponsors who want to take greater control of preventative care services, screenings and other primary care services. Sibson can help in many facets of your pursuit of an on-site or near-site clinic, including:

  • Clarifying the objectives and assessing the feasibility and the cost/benefits of implementing the clinic
  • Determining the most appropriate strategy and model
  • Defining the scope, services to be included and staffing requirements
  • Selecting a clinic manager
  • Communicating the benefits of the clinic to employees
  • Monitoring the performance and impact of the clinics

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