A 2014 Small Business Healthcare Survey conducted by the National Small Business Association found that the average small business spends $1,121 per month per employee for health insurance premiums. That equates to almost $37 per day for each member of your staff, an amount that can cripple a small business with a lot of employees that is barely making ends meet anyway. Worse yet, this amount is almost double what it was in 2009 (prior to the Affordable Care Act, or “Obamacare”), and it still doesn’t take into consideration the additional $590 per month that a lot of employers pay in additional healthcare-related expenses they offer their staff beyond just insurance.
So how are you supposed to keep your employees healthy if the costs of such mean that you can’t afford to stay in business? Well, one entrepreneur’s roadblock is another’s road to success, and Dr. David Berg decided that the second option looked better than the first, so he decided to take matters into his own hands and co-founded a concept that has ultimately reformed healthcare reform.
In Search Of A Better Healthcare System
In 2007-2008, Dr. Berg faced a dilemma that most other small business owners faced at the time, and that was how to provide quality healthcare without breaking their own bank or placing so much of the expense on employees that they had to seek jobs elsewhere because they couldn’t afford the costs. This inspired him to learn as much as he could about the healthcare system, and what he found was that a great deal of healthcare expenses are wasted or just not necessary. In fact, he estimates that only about one-third of the costs paid go to true healthcare expenses and the remaining two-thirds are used on administrative tasks, waste, inefficiency, poor planning and increasing corporate profits, and other things that don’t actually create value.
Taking his newfound information, Dr. Berg co-created a program that would totally change how healthcare works today. It’s called Redirect Health and although the concept was initially meant to help save his own company money (which it has been doing at the rate of 15-20% per year), it is now offering other small business owners the same advantage as well.
The Different Healthcare Option
What makes Redirect Health so different from other healthcare options is that it puts the employer and employee at the center of healthcare, not the insurance companies and hospitals. This means taking care of their everyday health needs like primary care, pain and injury care, and rehabilitation like chiropractic before insurance or other, often more costly care is even considered. And they’re doing it without charging for copays, deductibles, and ordinary insurance premiums.
The analogy Dr. Berg uses to explain how Redirect Health works is similar to what you already do with car insurance. You don’t go to the insurance company and get your car insurance before picking out the car you want to buy, right? Well, he explains that you shouldn’t do that with healthcare either. That’s why they “help employees create self-funded health plans” so they can take care of their employees’ inexpensive everyday healthcare needs, and only then consider more costly services that may require insurance.
Dr. Berg does reinforce that insurance is sometimes necessary, but only “in the right place and the right role.” In other words, it’s great to have it when you have a major medical emergency that is often very costly, but most day to day healthcare expenses don’t fall under this umbrella, which means that you’re likely overpaying for resources you aren’t going to necessarily need by lumping them all in together. And place of service really does matter. For instance, a $50 foot x-ray can cost you $1200 if you go to an emergency room to get it.
The Lower Cost of Healthcare
Perhaps the best part is that Redirect Health is able to provide their clients with this level of coverage at a cost that is often less than $100 per employee per month—potentially saving business owners more than $12,000 per employee per year. And it helps with attracting and retaining employees, like it has for Melissa DiGianfilippo of Serendipit Consulting, a PR and marketing agency based in Phoenix that uses Redirect Health, who said:
“Offering Redirect Health to our employees at Serendipit Consulting has changed the game for us – both in attracting new talent and retaining existing talent. Now we are able to market that we offer “free healthcare” which is attracting a level of employees we were never able to attract previously. Since we started offering Redirect Health in June 2015, we have hired 7 new employees, 3 of whom are senior-level and really game changers for our business.”
Although most of Redirect Health’s business is located in their home state of Arizona, they are also helping small business owners in other states such as California, Washington, Alaska, Oregon, Nevada, and New Mexico and have plans to roll out nationwide after the first of the year.
Their plans are Affordable Care Act compliant and they allow the small business owners to decide what works for them and their employees by providing “90% of the care that 90% of the people will need 90% of the time,” something they call Everyday Care. Dr. Berg states that the focus should be on getting value. It’s also about creating a mind shift in thinking about why healthcare is there, not about what you have to provide according to governmental regulations.
Dr. Berg says that their goal at Redirect Health is to “make healthcare work for entrepreneurs and organizations so they can grow their companies and gain an outrageous competitive advantage.” That’s what he is doing for his own business, all while taking care of his own employees’ healthcare needs at the same time.
Before Selecting Your Healthcare Options
I asked Dr. Berg what type of advice he has to offer other small business owners when it comes to selecting healthcare and he graciously offered these five tips:
- Think differently about your company’s healthcare. Focus less on Obamacare compliance and instead seek real value. This is a big dollar line item for most companies so think twice about solely delegating the decisions to a broker or HR manager. They can be a resource, but make the decisions yourself.
- Understand the difference between what you HAVE to do to comply with Obamacare vs. what you WANT to do because it is best for your business and your employees. (If you’re not sure what the differences are, check out this video: $0 Cost Obamacare.)
- Demand a company health plan that truly puts the company’s and your employees’ needs at the center and protects them from the healthcare system’s big cost drivers.
- Take the time to educate your employees about the very large savings they will get simply by asking their doctors to never send them to a hospital for services unless absolutely necessary. Nearly all services in a hospital, whether an MRI or a blood test, will cost 10-20 times more in the hospital than outside the hospital.
- Employees can also use the free app GoodRx to know the costs of prescriptions when their doctors are ordering them. For example, a simple Amoxicillin prescription can range from $21 to over $1000 if your employees don’t know better.
To learn more about Redirect Health, you can visit their website or contact them at (888) 995-4945.