MCOs: cost centers or profit partners for employers?

Abstract

Although health insurance has traditionally been a cost center for employers, and they are ever striving to reduce such costs, MCOs have the opportunity to become a means for employers to save costs rather then suffer more. By focusing on the total health-related costs affecting businesses' bottom lines, MCOs can become "account managers, " where the "account" reflects all the costs that they can positively affect through their own initiatives, and thereby become true solutions rather than costs. This method will enable them to differentiate themselves from competitors and generate "solution pricing"-based new revenue focusing on outcomes versus coverage. This article covers the rationale for and basics of such a strategy.