Dunn County saves $750,000 on health insurance using ReforMedicine

By LeAnn R. Ralph 

MENOMONIE — Over the last two years, Dunn County has saved $750,000 on health insurance costs by making ReforMedicine available to county employees.

Jennalee Nutter, director of Human Resources, reported on changes and improvements to the county’s health insurance benefits at a meeting of the Committee on Administration May 23.

Dunn County is self-funded for health insurance, which means the county pays the premiums for each employee, puts the money in an insurance account, and then the county pays the claims.

ReforMedicine is described as a “near-site” clinic that offers a variety of healthcare services on a direct-pay basis. 

From 2017 to 2019, Dunn County’s fixed costs for health insurance remained around $1.4 million per year, but the claims steadily increased, Nutter said.

In 2017, the claims amounted to $6.9 million. In 2018, the claims amounted to $7.5 million. And in 2019, the claims had increased to $8.25 million, according to information Nutter presented to the Committee on Administration.

To compensate for the increased costs, Dunn County also started increasing the deductibles.

In 2019, the deductibles increased to $2,000 for a single person and $4,000 for a family, which was also the out-of-pocket-maximum, Nutter said.

A higher deductible plan also was added at $5,000 for a single person and $10,000 for a family, she said.

In 2020, the deductibles and out-of-pocket maximum were increased again, to $3,000 for a single person and $6,000 for a family, Nutter said.

In 2021, a 20 percent co-pay was added to the county’s health insurance plan, and the deductible and out-of-pocket maximum was increased to $6,000 for a single person and $12,000 for a family, she said.

Premiums

According to information Nutter provided to the Committee on Administration, in 2023, for a single employee with a deductible of $2,500, the employee paid $78.85 per month for health insurance, and county paid $903.56 per month.

For an employee with a family and a deductible of $5,000, the employee paid $158.96 per month for health insurance, and the county paid $2,490.22 per month.

For a single employee with a deductible of $5,000, the employee paid $43.84 per month for health insurance, and the county paid $832.78 per month.

For an employee with a family and a deductible of $10,000, the employee paid $94.62 per month for health insurance, and the county paid $2,270.98 per month.

Stop-loss

Dunn County has “stop-loss” insurance coverage, which is legally required insurance, Nutter said.

The stop-loss insurance will pay covered expenses for the health insurance account in the event that a participant has more than $150,000 in claims in a calendar year, she said.

The stop-loss coverage pays additional claims over $150,000 after the deductible is met, Nutter said.

Lost employees

In 2021, people started leaving their positions with the county to find employment elsewhere, and many of them said they left their jobs because of the health insurance increases, Nutter said.

In order to maintain employees, Dunn County searched for ways to decrease the cost of health insurance and healthcare for both the county and for the employees.

To help reduce the cost of insurance and healthcare, the county contracted with ReforMedicine and also contracted with a Care Navigator, a Pharmacy Benefit Manager and implemented a Responsible Health Care Consumers plan, Nutter said.

ReforMedicine provides all primary care services, including preventative exams, sports physicals, stitches, lab tests and vaccinations, she said.

In addition, there is a medical weight loss program, and each visit to the clinic costs $10 with no additional costs for discussing additional conditions, Nutter said.

ReforMedicine carries a wide variety of prescriptions drugs at a low cost as well, and the clinic can provide pediatric primary care, she said.

$362,000 savings

In 2022, the first year of using ReforMedicine, lab tests cost the county $17,773. With Mayo Clinic, those lab tests would have cost $370,743, Nutter said.

Vaccines with Mayo Clinic would have cost $24,064, but with ReforMedicine, the vaccines were $14,548, she said.

Mental health counseling with Mayo Clinic would have cost $32,416, and the cost with ReforMedicine was zero, Nutter said.

Provider visits with Mayo Clinic would have cost $255,939, but with ReforMedicine, the provider visits cost zero dollars, she said.

Sleep studies would have cost $2,416 with Mayo Clinic, but with ReforMedicine, the sleep studies cost $400, Nutter said.

In the first year, Dunn County paid a membership fee of $323,376 to ReformMedicine, and received cash back from ReforMedicine of $12,222, she said.

All together, in the first year, the cost for healthcare with Mayo Clinic would have cost Dunn County $716,550, but with ReforMedicine, the cost was $354,625, Nutter said, noting that the total savings was $362,000.

In 2023, Dunn County paid ReforMedicine $411,665, and by contrast, would have paid Mayo Clinic $792,615, so Dunn County saved $380,950, she said.

The calculations for savings, Nutter pointed out, are based on the assumption that all of the employees would have gone to Mayo Clinic if they did not go to ReforMedicine.

Over the past two years, the savings has been $742,875, she said.

Not required

Dunn County employees are not required to use ReforMedicine and can still go to Mayo Clinic or one of the other providers in the network, Nutter said. 

According to a chart Nutter presented to the committee, in the Chippewa Valley, the costs for various procedures can vary widely.

The cost of a hysterectomy, for example, ranges from $11,500 to nearly $35,000.

The cost for a colonoscopy ranges from $2,000 to $20,000.

The cost for a hip replacement or a knee replacement ranges from $27,500 to $80,000.

If employees choose the lowest cost medical care, because there is quite a swing in costs in the Chippewa Valley, the employees can receive an incentive that ranges from $750 to $3,000, Nutter said.

And how do employees know which is the lowest cost option?

Dunn County contracts with a care navigator company that provides a care advocate for the employee. The care advocate researches the costs of the particular procedure in question, and then the employee makes a decision on which care provider to use for the procedure.

After the medical procedure is done, the employee fills out a survey provided by the care advocate, and that is how the employee receives the incentive payment, Nutter said.

The incentive payments go through payroll, so the employees do pay income taxes on the incentives, she noted. 

Decreasing deductibles

In 2024, Dunn County is able to provide a plan with a deductible of $2,500 for a single person and $5,000 for a family with a 20 percent co-pay for the employees and an out-of-pocket-maximum of $3,500 for a single person and $7,000 for a family, Nutter said.

In 2022, the out-of-pocket-maximum was $6,000 for a single person and $12,000 for a family, she said.

In 2023, the out-of-pocket-maximum was $4,000 for a single person and $8,000 for a family, she said.

In other words, between 2022 and 2024, Dunn County was able to decrease the out-of-pocket-maximum for a single person by $2,500 and reduce it by $5,000 for a family.

And that was all possible without increasing health insurance premiums, Nutter said.

Cost per employee

Another way to look at it is the cost per employee per month, Nutter said.

In 2020, the cost per month per employee was $2,615 for health insurance.

In 2021, the cost per month per employee was $2,216.

In 2022, the cost per month per employee was $1,956.

And in 2023, the cost per month per employee was $1,900.

In three years, Dunn County was able to reduce the cost per month per employee by $715.

Medical inflation is at 7 percent for 2024, Nutter said.

“We are driving costs down even though (medical care) is more expensive,” she said.

The employees are not required to use ReforMedicine or to find the lowest cost procedures, but the employees are being responsible and are using the services available to them, Nutter said.

The Human Resources and administrative teams have worked hard to find ways to decrease the cost for health insurance and for healthcare, said Vaughn Hedlund, county board supervisor from Boyceville and chair of the Committee on Administration.

There were so many cost increases, “we were struggling” to present the increased costs to the employees and to the Dunn County Board, he said.

Dunn County is now able to reward people for making better consumer choices, Hedlund said.

The reduced deductibles and out-of-pocket-maximum costs are helping Dunn County to attract and to maintain employees, he said.