As healthcare costs continue to rise, employers are exploring innovative strategies to manage expenses while maintaining quality coverage. One increasingly popular option is joining an insurance consortium or coalition—a group of organizations that collaborate to provide insurance coverage. For employers considering self-insuring medical costs, consortiums offer several compelling advantages:

Alternative Funding Opportunities

Coalitions enable organizations to explore cost-effective funding models, such as self-insurance or utilizing a captive. By pooling resources, members share costs and risks across a larger base, reducing financial volatility while creating potential savings.

Group Purchasing Power

Collaborating within a consortium enhances buying power. Members can secure volume discounts and negotiate better contract terms with key vendors, including medical third-party administrators (TPAs), pharmacy benefit managers (PBMs), stop-loss carriers, and more. Additionally, consortiums often extend group benefits to services like point solutions, data warehousing, and wellness programs, maximizing value for all participants.

Claims Savings

Self-funding claims through a TPA allows employers to avoid high insurer premiums and directly manage healthcare costs. This approach can lead to significant savings, particularly when combined with a coalition’s shared resources.

Data

Consortium structures typically provide regular access to claims data, offering employers greater transparency and control. With actionable insights into trends and spending, organizations can make informed decisions and proactively address cost drivers throughout the year.

Engage with Like-Minded Organizations

While a variety of collaboratives exist, many are designed to bring together organizations of a similar nature, whether based on the type of organization, geography, size, or the nature of the business. These organizations not only pool risk but also collaborate, enabling members to exchange ideas, benchmark performance, establish common plan designs, and access shared administrative services. These collective efforts create a stronger foundation for sustainable healthcare strategies. One successful example is our client edRISK, which includes edHEALTH. We’ve worked with edHEALTH since the beginning and today it’s an 11-year-old member-owned group of educational institutions that are saving money on their employee health insurance costs and uncovering new opportunities to improve health and value for their faculty and staff.

Is a Collaborative Right for Your Organization?

While joining a consortium may seem like a significant step, the potential benefits often outweigh the effort required. From cost savings and risk mitigation to enhanced data transparency and collaboration, collaboratives are a powerful tool for employers seeking sustainable healthcare solutions. To learn more about how consortiums can benefit your organization, please reach out to us.