A Shift to Health Guardianship Led to 20% Healthcare Savings

Mike Morris, CEO of a US steel manufacturer and BowTie client, joined us on the Health Guardianship Podcast recently.As someone deeply invested in providing high-quality benefits for his employees, Mike found himself (much like so many employers) trying different methods to manage the ever-increasing burden of healthcare costs. 

The Reference-Based Pricing Journey

In 2015, Mike’s company took the first step of benchmarking its healthcare expenses against similar companies of its size. This was around the same time that they began exploring the adoption of a reference-based pricing model inside their health plan. 

On paper, the concept seemed promising. Reference-based pricing aims to set prices for medical procedures based on a fixed reference, such as Medicare rates, rather than the inflated prices often charged by hospitals. The approach did results in savings, Mike’s company saw roughly a 12% reduction against the competing industry benchmark they established. 

However, the overall experience for members was terrible.

Almost immediately, major healthcare providers began to push back. In one particularly heart-wrenching case, an employee diagnosed with prostate cancer was denied treatment until 50% of his estimated care costs were paid upfront. 

It became clear to Mike that reference-based pricing was not worth the savings it generated. The process had resulted in ongoing battles with hospitals, creating chaos and uncertainty. The emotional toll on his employees was real, and Mike knew he needed to find a better way.

The Transition to Health Guardianship

Frustrated, Mike and his team kept searching for a better way and were introduced to BowTie. 

“I remember the lunch meeting very distinctly,” Mike said, reflecting on his decision to partner with Health Guardianship. “When I walked away from that, I said, ‘This is what we need to do.’”

Health Guardianship set up an on-site clinic for the company, allowing employees to access healthcare easily and in a way that aligned with the company’s values. No longer were employees caught in the crosshairs of difficult negotiations or held hostage by demands for upfront payments. Instead, they now had direct, transparent access to care that prioritized their well-being.

In addition, the Health Guardians became the main point of contact for all care, dramatically improving access and quick response to medical needs. 

As part of the switch to Health Guardianship, Mike’s team decided to have their largest location have access to Health Guardianship first, while their smaller PA location maintained the same health plan. This control group allowed them to see some fascinating results. 

The Results: 20% Below the Benchmark

Since including Health Guardianship inside of their health plan, Mike’s company has seen incredible results. They are now trending 20% below their industry benchmark for healthcare costs. 

“This isn’t just hypothetical savings,” Mike emphasized. “That’s real money. And what I tell the employees is, the money we save goes back into their pockets through our profit-sharing program.”

For Mike, the benefits go beyond just financial savings. The company now offers high-quality virtual-first healthcare 24/7 and onsite clinic care Monday through Friday, which has helped them stay competitive in a challenging labor market. More importantly, the shift has restored trust and confidence among employees. 

A Call to Action for Other CEOs

Mike’s message to other CEOs is clear: healthcare is a critical issue that can’t be ignored. He calls on leaders to engage with innovative solutions like Health Guardianship and BowTie Medical, warning that if businesses don’t start actively addressing healthcare costs, the future of U.S. manufacturing could be in jeopardy.

“Healthcare is controlling the U.S. right now, and it can’t continue like this. We need to change the way we do healthcare in this country,” Mike urged.

Listen to the full episode here.