The 90s and into the 2000s were pivotal years for photography. As the costs of film and access to photography development services grew, disposable cameras began entering the market and were soon followed by the earliest versions of digital cameras. At first, these devices were big and clunky and expensive, but tech evangelists and key players in the photography industry saw them as the beginning of a new era for photography.

Kodak, however, disagreed. Kodak decided that digital photography was a passing fad and opted to not pivot the business into digital.

Today, we know how that story ends. Kodak is still around, but it is far from the behemoth it once was. Kodak had all of the resources it needed to seize and dominate the blossoming digital photography market, but the leadership chose not to act. And that inaction proved to be a costly mistake, opening the door to competitors to chip away at Kodak’s customer base and market dominance.

The Cost of Inaction

Kodak’s story is not a new one, unfortunately. Powerful businesses often miss new ideas because they fear change and believe that inaction is a safe strategy. 

Sear’s, with its national chain of department stores and thriving mail order catalog business, could have evolved to become what Amazon is today. Disney famously derided 3D animation and passed on supporting what would become Pixar only to buy the company later for $7.4 billion. And the examples go on and on.

If you apply this lens to your own organization, you will discover that inaction can hobble your business at many unexpected points. For example, our work with employee benefits means that we see, again and again, how painful inaction can be.

Sure, changing your benefits plan is a complex challenge, but what are the costs of not changing? Here are some top-level consequences:

• You pay more than you should. If you overpay for your benefits, the total loss of revenue year over year can be substantial. It’s expensive to sit still.
• You lose potential growth. All of the revenue you wasted on your bloated, ineffective benefits plan means fewer dollars to reinvest in your organization, slowing progress across the board.
• Employee morale suffers. Choosing to not address your benefits plan means that the quality of your benefits will likely decline each year, which means more frustration and heartache for your people, and that adds up quickly.

Adopt a Proactive Perspective

To avoid becoming a Kodak in your own way, you need to be willing to pursue new ideas and try new things. That’s scary, yes, but inaction should scare you even more.

Self-Funded Options are Available to Private Schools

We have found that private schools in our region, especially the Christian ones, have grown accustomed to doing more with fewer available resources. These institutions are so mission-driven that every person in the building is committed to delivering on their promises to their students, so they get creative with scheduling and staffing and with budgets.

Unfortunately, this scrappiness can sometimes lead to assumptions about what they can and cannot afford. Faced with ever-rising benefits costs, we have met with dozens of leadership teams who believe they simply have no option but to endure annual rate increases because of their size.

“We just aren’t big enough to do anything else,” they say.

This isn’t true. No matter how small the organization, you have more options available to you than you may realize.

Before we dive into what those options are, you should know that employee benefits plans are often divided into groups: Fully insured traditional plans and self-funded plans.

Fully Insured Traditional Plans

This is your classic employee benefits plan. The plan gives you coverage for a set rate, and you (as well as your employees) pay 100% of the premiums regardless of how much or how little the plan is used. At the end of each year, these plans typically increase in cost by 10 to 20% while employee deductibles and quality of coverage decline.

Self-Funded Plans

Under a self-funded model, you “pay as you go.” By directly managing your benefits plan, you pay for only what you use, giving you an opportunity to control the overall cost of your plan. Self-funded plans typically include a range of tools that enable employees to access better care but for lower prices.

Unlocking Rewards with Smaller Groups

Historically, larger groups have had the most success with self-funding because they are in a better position to absorb large claims. When smaller groups consider the possibility of self-funding care for an employee’s major illness or expensive prescription, the risk seems too high, so they go back to their broker and renew their traditional coverage.

We have clients with as few as 2 lives on self-funded plans, and that’s possible because of these tools:

1. Stop-loss insurance – By capping your potential costs, stop-less insurance protects you from a bad year of claims so that you have stability and security at all times.
2. Pharmaceutical programs – Prescription drug costs are one of the most common sources of high benefits costs, and we have tools that enable us to reduce (and sometimes eliminate) out-of-pocket costs to the employee while dramatically reducing the costs to the plan. For example, we have been able to provide $80,000 prescriptions for $30,000.
3. Collective buying power – We use coalition and alliance models to bring several smaller schools together, giving everyone more negotiating power and better access to coverage,
4. Direct medical contracts and reference-based pricing – In the benefits world, higher costs often do not equate to better care. We help your employees get the best possible care at fair prices, generating huge savings for your plan while giving them a better experience.
5. Alternative delivery models – Benefits plans are full of waste. With telemedicine and prescriptions by mail, we can give employees more care at a lower cost.
6. Progressive change – Your organization can gradually implement self-funded options overtime to make change more manageable for your leadership team. In other words, keep your plan but start saving at the same time.
7. The right partner – The right advisor for your business will take your concerns seriously and collaborate with you to customize an approach that meets your needs.

Your Next Steps

You likely renewed your benefits plan recently, and that’s okay. Not only do we have options we can begin pursuing today to lower the costs of your current benefits plan, having more time between now and your policy renewal gives you more flexibility in your planning and your preparation. Next year, your benefits costs will go up. That is a certainty. But, if we start working together soon, we can unlock a new strategic advantage for your people without putting them at risk.

Move from Reactive to Proactive with Your Benefits Plan

2020 was not an easy year for educators, big or small, public or private. In the chaos of COVID-19 and the rollercoaster of regulations, directives, and mandates that followed, many private schools spent the year in survival mode. Forget the strategic plan. How do we immediately transition our classrooms to distance-learning? How do we keep our faculty and students safe if in-person education resumes? How do we navigate planning and structure when we aren’t even sure what tomorrow holds?

Turning the calendars over to 2021 does not eliminate these challenges, and you’re probably still contending with your share of obstacles, but the dust is starting to settle. Elections are behind us. Vaccines are being administered. We can start to shift our thinking away from emergency problem-solving and toward the strategic initiatives that are important to you, your employees, and your students.

Strategic Benefits Planning for Christian Schools

Strategic planning is not a new idea for you. However, given the intensity of the crisis you have endured for the last several months, you may find it difficult to step away from the day-to-day to think broadly about your organization and what could come next.

We’re having these discussions with our own teams and also with our clients. Here’s the process we recommend:

• Revisit your old plan. Though many variables and specifics may have changed, reviewing your most recent strategic plan can help you to reframe your broader goals and focus your perspective.
• Run a SWOP Analysis. A SWOT analysis stands for strengths, weaknesses, opportunities, and threats. We have a more proactive mindset, so we think of threats as priorities instead. Regardless of your exact approach, this classic planning tool can help you to understand your current situation and reveal places you might go.
• Talk to expert advisors. You can’t be expected to know everything, and your SWOP exercise may uncover questions that you aren’t in a position to answer. That’s okay. Talk to your trusted partners in your network so that you can make more informed decisions by leaning on their expertise.
• Make a timeline. Map your plan to a timeline, setting key execution milestones that are both reasonable and practical. Without a plan for how you actually bring your strategic plan to life, many of your important ideas can get stuck on the shelf.
• Revisit and recalibrate. 2020 showed us that everything can change, and it can change quickly. Your strategic plan should be malleable and adaptable, but that means taking the time to periodically reassess and reevaluate your progress and the realities facing your organization.

Make Every Dollar Count

With the volume of revenue funneled into employee benefits plans for the average organization, benefits should be a component of your strategic plan. It’s not the only priority, of course, but in an age where you may need to rapidly shift resources or, perhaps, build entirely new systems for delivering education, having more agency over your budget is a huge advantage. 

In any case, your strategic plan needs your attention, and soon.

You don’t have to figure out any of this alone. We’re happy to share what we’ve learned from our work and from our clients at any time. 

And How to Solve Them

The traditional health care model that so many Christian schools are locked into is broken. These schools are stuck in a cycle of inefficiency: Their insurance carrier raises its prices to an unsustainable level, so the school goes back to the market and finds a more affordable alternative—even if it means they still have to pay a little more than they currently do. A year later, prices once again reach an unbearable rate, so they head back to the market once more. By breaking out of this cycle, schools can pursue reliable plan options that provide consistent rates and high-quality care for employees. 

When schools switch from plan to plan every few years, everyone suffers. Administrators spend weeks sorting through plan options, completing paperwork, and hoping for a smooth transition. For the employees, changes to the plan often mean a disruption in care as they seek out new doctors in the network. The worst part, however, is something that impacts everyone. In most cases, switching plans within the traditional health care model fails to provide a long-term cost-savings solution for the business or the employees. 

Breaking out of the traditional health care mold solves that problem. 

A Better Solution

Self-funded plans and group plans are proven alternatives to the typical health care model. By pulling together to negotiate lower rates, schools may finally experience something they haven’t felt within their health care program for years: stability. With this newfound stability, schools reap numerous benefits, including: 

1. Cost savings. With the power of self-funding or group plans, you’re never at the mercy of the insurance companies. Instead, you can leverage your buying power to access significantly lower plan prices. The savings potential here is enormous. In a traditional plan, all of the money you budget for the year goes to the insurance company. If your employees stay healthy and don’t use the plan very often, the insurance company enjoys handsome profits from your team’s health. In a self-funded plan, meanwhile, your excess budget could potentially come back to your school at the end of the year as a refund. 

2. Consistency. Maintaining the same plan each year leads to easier forecasting, planning, and budgeting for your school, and employees can remain with the same provider without worrying about a disruption in care. As an added bonus, you don’t spend weeks on open enrollment every year, sorting through potential vendors, comparing rising prices, communicating changes to employees, and distributing new health care cards. 

3. Better care and health outcomes. With a great plan, employees can visit the same doctors every year without worrying about who will write their prescriptions or help them when they’re sick. Since these employees visit the same doctors each year, their care is never interrupted—which means they could experience better health outcomes. For many employees, sticking with the same plan each year makes them feel comfortable while giving them an extra sense of confidence that they will receive the treatment they deserve.  

Improvements for Everyone

The traditional health care model that so many schools are locked into is broken. 

Every two or three years, we watch schools return to the market in search of a health plan that provides the smallest rate increase without disrupting coverage for employees. 

There’s a better way. 

By leveraging self-funded and group plan strategies, schools can access significantly lower rates that remain steady from year to year. In breaking away from the traditional health care cycle, schools can pursue new, reliable plan options that provide better rates and high-quality care for employees. With an optimal plan, school leaders avoid returning to the market every two or three years in search of the least painful plan. By switching, these leaders can find a plan that works.