Sexy it’s not, unless where the $$ is bleeding off without much chance
of controlling it gets your attention, but this McKinsey
piece addresses
controlling health-care benefit costs (albeit in the context of F500
companies).
When I was a junior in college majoring in economics, I did one of
my two requisite "junior papers" on the challenge of runaway healthcare
costs, and the potential remedy embodied in a new form of healthcare
service provider called an HMO, then pioneered only by Kaiser Permanente
of California. At that time, healthcare absorbed an unimaginable
8% of GDP. Today it’s nearing 15% with no visible ceiling in
sight. [The economic reasons are manifold, but two will
do for now: (1) Realistically, demand is driven by individuals
{as opposed to, say, the state} and given that premise, demand is insatiable,
in that there is no such thing as an individual having "too much healthcare"
or being "too healthy." (2) The economic perturbations
caused by the third-party-payer healthcare insurance system are, perhaps,
the single worst cause of healthcare economics’ bizarre dysfunction.]
Be that as it may, McKinsey has no magic bullet (who does?), but suggests
that one start from a very straightforward premise: What do employees
really value in terms of healthcare benefits, and what tradeoffs can
be made? In the end, of course, law firms may find all of what
McKinsey has to say to an F500 firm irrelevant. I’m reminded
of a friend who, shortly after starting in a senior business-side position
at an AmLaw 50 firm, said she’d floated an initiative to save money
in a particular support area, and the response was, "Who cares about
saving money?"
Hey, if you are in that position, you should have skipped this post. But
having read this far, we should talk; I want to do an (anonymous) piece
or two about your firm’s success.
