A simple lunch turned into a schematic drawing on a paper napkin. It took 60 minutes to create a vision, eight months to design a plan, and 30 days to insure 3,500 lives.
Five years ago, the Lubbock Chamber of Commerce surveyed their business members in order to address concerns about the cost of health care. Board members drew out their vision of a plan. Today, that vision is a reality.
The Chamber developed a plan with FirstCare, now their third party administrator, providing the insurance product for the cooperative. The main priority in developing the plan was to include both Covenant Health System and UMC Health System. Both hospitals are in the FirstCare network, which made the plan attractive to small businesses in Lubbock and its eight surrounding counties.
Norma Ritz Johnson, Lubbock Chamber of Commerce vice president of legislative affairs, said the plan has been a success. In order for the plan to be effective and provide savings to the co-op members, the Chamber needed 2,000 individuals to be enrolled by July 1, 2006. By the deadline, 3,500 had enrolled.
When the plan was announced, Steve Verett, chairman at the time, was the first to inquire about farms being allowed to enroll in the plan. The response was farms were welcome to join because they were considered a business. Approximately 1,000 businesses joined, including 100 farms.
“It wasn’t a big surprise to us,” Johnson said. “At the Lubbock Chamber, we realize fully that a family farm is a business, and it’s big business in Lubbock. “
While managing his family farm in Crosbyton, Texas, Verett served as chairman at the Chamber and provided leadership to the Plains Cotton Growers. Prior to the Chamber’s health plan, the farm was not able to provide an insurance plan to any of the employees.
“For Verett Farms, the Chamber’s health plan was an opportunity that we could not get anywhere else,” Verett said. “There wasn’t any other way we could provide the level of health insurance benefits that it provides.”
Verett was one of many who realized benefits of the plan. He explained that, without benefits to offer, it was difficult to hire future employees.
“Trying to hire good people when we have not been able to provide benefits, whether it is retirement or whether it is health insurance benefits, it is hard to compete,” Verett said.
With the plan, Verett believes that small businesses have a competitive edge. They have a plan they can offer to future employees which makes it easier to attract good candidates.
Johnson explained the different plans the chamber offers to members. Originally, the chamber developed only four plans, but, in the past four years, three new plans have been put added and the original four were reconstructed to better fit the needs of the members. The plans cover everything from catastrophic events in nature to any type of hospitalization.
While the health plan has helped businesses offer affordable health care to employees, it also saves money for businesses. Johnson said a local public relations firm with a staff of 20 reported savings of $12,000 per employee in only the first year.
“The overall success that I think we are proud of is about 20 percent of the lives that are covered in the plan previously had no medical insurance at all,” Johnson said with a warm smile.
Johnson said the members who have the plan know that accident prevention is just as important as enrollment in the plan.
“The businesses that are members of the co-op understand the importance of preventive practice and wellness,” Johnson said.
The Chamber formed the co-op with goals in mind of helping small business while being able to benefit high-risk groups. They also wanted to make sure the co-op kept premiums attractive enough to keep the healthy groups that were a lower risk, while helping the high risk groups.
Johnson said having diversity in the pool helps spread the risks and allows for an affordable premium.
“It’s almost like having to continually stir a sauce on the fire without letting it scald and without over-stirring it at the same time,” Johnson said. “It is a very delicate balance. It is definitely a challenge that we’re here to face and try to overcome.”
Johnson concluded by stating the plan came together smoothly and has been very successful, however, she said they still run into small bumps and have to make changes along the way.
“A continual challenge, one that we have kind of grown to enjoy and tried to overcome, is managing risks profile of the co-op,” Johnson said. “There is a lot of continual analysis that we do of what the plan is looking like.”
If months, 30 days, and 60 minutes can result in 3,500 insured lives, imagine the life changing possibilities that could come from a week long analysis and reconstruction of the plan.