Self-funding: Cost-Saving Alternative to Traditional Insurance

Removing the blindfold to valuable data  

Q&A with Daniel Corliss, director of Employee Benefits and Large Group Operations at Quantum Insurance Services, Los Angeles, Calif.

CB: Would you explain the concept of self-funding?
Self-funding is an alternative to the traditional approach for Large Group clients who are under pressure to save money. Cost-shifting and 10-20% premium increases are forcing companies to ask WHY. Carriers just respond with, “you had a bad year, take the increase” but don’t reveal the detail that self-funding would provide.

Self-funding takes the blindfold off and provides transparency to health plan data so you can control your spend down to every dollar. At Quantum, we’re able to manage this effectively and save our clients money.

We can really dig into member-specific data. Using disease management reports, we can see who’s just been diagnosed with say, end-stage renal disease (ESRD) or cancer, and get them to a high quality, low cost place of service. That’s where we can really start incentivizing members by waving their out-of-pocket, and even provide travel assistance to seek this better care, achieving lower costs for the plan.

When self-funded, you’re possibly renting a network from a carrier, but you are managing and administering your own health plan outside of any carrier control. Benefits and plan structure are the same or better, with more robust benefits and less deductible and co-pay.

As a new concept in most of California, there’s much room for disruption and innovation. It’s very exciting.

Quantum’s priority in 2020 is expanding this impact and value to employers all over the country. We have a performance-based fee-structure with very low base fees, so if we don’t provide savings, we don’t get paid much.

CB: What’s your perspective on the future of the healthcare industry?

Corliss: We’re continuing to evolve towards true plan transparency, both from a healthcare data and financial perspective. I love that technology is getting better at showing how we can bend the cost curve and save clients’ money.

CB: What about the role of brokers?

Corliss: It’s evolving toward a consultative and continuous handholding approach, rather than brokering by spreadsheeting carrier rates. The traditional role is now being eclipsed by ongoing plan administration and cost mitigation. For brokers to gain control and give value, we use data to provide solutions that are going to save the plan money but also improve care and convenience. This is my passion. 

CB: How responsive have brokers been?

Corliss: Some don’t like it because they only know fully insured business, and honestly, that takes less work and provides more revenue. BUT it’s not doing the right thing for better management of the health plan or savings potential.

Some brokers don’t go this route because they don’t have the tools yet to manage a self-funded plan. Some don’t know all the pieces to that puzzle, which are many. It would be irresponsible for some to try self-funding even if it would provide savings. If not done properly you could actually do more harm.

So that’s where we see unique business opportunity. At Quantum, we have the expertise to build and customize that infrastructure, so we’ve just opened our doors for a co-brokering program to help brokers self-fund their clients. It’s still their client, but we consult and coach the broker and client, then share the commissions in that scenario.

My vision is for brokers to be able to come to us if they have an interest in learning about taking their clients self-funded, and I sincerely welcome it.

CB: What’s your life philosophy?

Corliss: Lean into your weaknesses and fears, and live life always slightly at your edge. I feel the most fulfilled when I’m challenging myself to go further and do better.

CB: What’s on your reading/listening list?

Corliss: I’m listening to two audio books: Can’t Hurt Me: Master Your Mind and Defy the Odds by David Goggins, and Dare to Lead by Brene’ Brown.