Self-insured companies bear actual costs, creating aligned health incentives.
Research shows that one third to one quarter of hospital admissions in the US are avoidable. In traditional healthcare, hospitals view admissions as revenue and insurance companies have already priced those risks into premiums, so there’s little incentive to prevent them. Self-insured companies are different because they pay the actual care their employees receive and bear the actual cost of healthcare. This creates alignment between the payer and the patient, giving self-insured companies a vested interest in promoting healthier lifestyles and a shared commitment to health that didn’t exist before.