Five50 Advisory was formed to educate decision-makers about why their medical spending continues to hurt their profitability, shedding light on the industry practices that often confound them and siphon their budgets.
Five50 president Bryan Perry says that the current employee benefits insurance market is suffering from the opacity of costs and misaligned incentives which lead to employers spending more, especially with insurance companies raising rates from around 6% to 12% each year, despite real wages remaining stagnant for decades. Rising insurance rates hurt the employer's profitability and take a larger slice out of the employer's financial pie, leading to less money for compensation and employee retirement programs such as 401(k).
According to Perry, Five50's model teaches companies how to understand the healthcare delivery business, and it shows clients how to manage the supply chain to get the most cost-effective treatments. He adds, “The healthcare industry is armed with teams of consultants whose entire job is to maximize revenue off of employer-sponsored healthcare plans, we find that most business leaders are not equipped to take on the for-profit healthcare delivery industry.”
Five50 offers a paid monthly educational newsletter that informs companies about ways to control benefits costs and other helpful financial and insurance-related tips. This will help C-level executives become updated on developments in the healthcare industry, as well as provide valuable information in an area that might not be their area of expertise, which will help them make more informed decisions and be more prepared in dealing with the insurance market.
Five50 uses market insight to examine pharmacy spend, outpatient services, doctors visits, and many other aspects of healthcare, to identify the marketplace inefficiencies that exist in all of those areas, increasing transparency for its clients. While the healthcare industry has all the information, business leaders are severely less informed. Five50 works to bring this information asymmetry back into balance. “Our process involves education, consultation, and most importantly, execution,” says Perry. “Our revenue model is much closer to a consultancy than a brokerage.”
Five50’s name reflects its focus on providing advisory and consulting services to its clients. It also references the industry finding that around 5% of an organization's headcount is responsible for around 50% of claims cost. Perry says this is why it's important for employers to control that 5% of the population to be able to effectively manage their employee benefits spending.
“Around 12 years ago, we took on a number of clients that really needed help in saving money, because their budgets just could not afford the rising health care costs. So, we aggressively sought out new and different ways of financing healthcare, and, in doing so, we learned a lot of lessons. Our clients have had some tremendous successes to the point where some of them are paying virtually the same amount that they did in 2008. They’ve been able to eliminate trend increases, while providing much better benefits – employees have no deductible, no co-insurance, and no out-of-pocket costs,” Perry says.
Media contact:
Name: Tom Peterson
Email: [email protected]
