With companies facing uncertainty about how to prepare for health care reform, a Cranford-based insurance consultant is pointing to a recent contract it prepared as a possible model.
Starting Jan. 1, New Providence-based Advanced Health Media shifted its insurance from Cigna to New York-based MagnaCare, which offers health through all-in-one provider Summit Medical Group.
The arrangement was designed by broker Meeker Sharkey, of Cranford, whose executives see it as a health care model for the future.
Advanced Health Media, which provides information from pharmaceutical companies to doctors, was facing a 47 percent increase in health costs from its current provider, Cigna, according to Renée T. De Franco, senior vice president of human resources.
After attending an event hosted by Meeker Sharkey, the company decided to move to MagnaCare and Summit Medical Group, De Franco said. It now is anticipating a 10-percent increase.
Tom Sharkey Jr., Meeker Sharkey’s CEO and chairman, said Advanced Health Media would benefit from the combination of Summit’s comprehensive “hospital without beds” approach and the expertise of MagnaCare, which provides services traditionally provided by insurance companies without bearing all of the risk — which is instead shared with Summit, the employer and employees, who are on high-deductible plans.
“Because it’s a totally integrated practice, it’s going to help control costs, avoid unnecessary treatments and really provide a better result, a better outcome,” saving 15 percent to 20 percent of health care costs, Sharkey said.
Sharkey noted that, “to the extent that they inflate costs, they’re bearing the risk on that.”
Meeker Sharkey representatives said this is the first case where a provider has provided a “truly integrated health care financing solution.” Its vice president of employee benefits, Greg Sandler, said there will be more agreements like this as health care reform is implemented.
Meeker Sharkey has roots dating to the 1860s, although it was later merged with the insurance division of several large banks. It was restarted from scratch in 2007 and has grown to 15 employees.
De Franco said the change is expected to benefit Advanced Health Media.
“We are very hopeful that this will help us not just contain, but drive down our costs,” De Franco said.