Health & Welfare Renewal Case Study
How Strategic Benefits Consulting Delivered $13.8M in Savings Over Five Years
A comprehensive analysis of a multi-brand restaurant group's journey from traditional fully-insured coverage to a high-performing self-funded model that maximized value while improving employee access to care.
The Challenge
A growing restaurant group faced escalating healthcare costs under their traditional fully-insured plan. Their Per Employee Per Month (PEPM) costs had reached $1,062 — significantly above market benchmarks.
The organization needed a partner who could:
  • Reduce costs without sacrificing quality of care
  • Provide transparency into healthcare spending
  • Implement innovative solutions beyond traditional insurance
  • Navigate the complexity of self-funded plan management
The Strategic Approach
Our consulting team implemented a comprehensive value-based strategy focused on three core pillars:
Value-Based Health Care
Transitioned to self-funded model with strategic network partnerships and clinical management programs
Financial Transparency in Pharmacy
Implemented transparent pharmacy benefit management with rebate optimization and specialty drug navigation
Point Solutions
Deployed targeted interventions including specialized programs for high-cost conditions and preventive care incentives
Goals + Outcomes
Maximize the value equation in healthcare procurement by balancing best-in-class clinical outcomes with cost efficiency.
Total Savings Achieved
$13.8M
Over five years through strategic plan design, vendor management, and innovative point solutions
Dramatic Cost Reduction
The transformation from fully-insured to strategically managed self-funded coverage delivered immediate and sustained cost improvements.
PEPM Comparison
$1,062
Original Carrier
2021 fully-insured PEPM before transition
$582
Current Performance
Year-to-date PEPM with new strategy
$695
All-Time Average
Blended PEPM across entire partnership
45% Cost Reduction
From $1,062 to $582 PEPM — delivering sustainable savings while maintaining comprehensive coverage and improving network access.
Market Benchmark Context: Industry average PEPM is $1,528, meaning this organization now operates at 62% below market rates.
Five-Year Savings Trajectory
Assumes a market average 8% annual trend if the organization had remained with their original carrier. Financials do not include pharmacy rebates or specialized fund costs.
Total savings with pharmacy rebates: $13.1M
Innovative Solutions That Delivered Results
Beyond traditional plan design, our team implemented cutting-edge point solutions that addressed specific cost drivers while improving member experience.
These targeted interventions created a comprehensive ecosystem of care that reduced costs while improving outcomes.
The Specialized Fund Impact
Managing Catastrophic Claims
Four members with chronic, high-cost conditions were transitioned into a specialized funding arrangement, protecting the plan from catastrophic exposure while ensuring members received necessary care.
  • Member 1: ESRD — Estimated Annual Cost: $1,820,000
  • Member 2: Atrial Fibrillation + Kidney Disease — Estimated Annual Cost: $1,000,000
  • Member 3: Cirrhosis + Spinal Stenosis + Venous Disease — Estimated Annual Cost: $288,500
  • Member 4: Severe Crohn's Disease — Estimated Annual Cost: $210,000
Total Annual Cost
$3.3M
Plan Claims Cost
$800K
Fund Cost
$220K
Net Savings
$580K
Result: The specialized fund absorbed $2.3M in potential claims exposure for just $220K in annual fees — a 10:1 return on investment.
Pharmacy Program Excellence
Transparent Rebate Model
By implementing a fully transparent pharmacy benefit manager with pass-through rebates, the organization captured value that traditional carriers retain.
Five-Year Pharmacy Rebate History
Estimated 2026 rebate: $225,859 based on current utilization patterns
Specialty Drug Management
Strategic management of high-cost specialty medications, including GLP-1 drugs for diabetes and weight management.

GLP-1 Drug Management
Current paid: $75k across 24 members
Average cost per dose per month: $825
Includes medications for diabetes management and weight loss
Provider Discount Performance
Specialized program through the third-party administrator is tracking at 83% provider discounts — significantly better than traditional network arrangements.
This means the plan pays only 17% of billed charges on average, compared to 40-60% under typical PPO arrangements.
Risk Management & Claims Performance
Effective stop-loss management and claims monitoring protected the organization from catastrophic exposure while maintaining budget predictability.
Large Claims Trend
10
2022-2023
Claims over $50k
17
2023-2024
Claims over $50k
9
2024-2025
Claims over $50k
1
2025 YTD
Claims over $50k
The dramatic reduction in large claims demonstrates improved care management and preventive strategies working in concert.
Stop-Loss Optimization
Through competitive market analysis and strategic carrier selection, we secured improved stop-loss terms:
  • Current specific deductible: $200k per member
  • Laser protection: $500k contingent coverage for transplant cases
  • No new laser clause: 50% rate cap protection
  • Maximum liability reduction: Decreased by $267k through carrier optimization

2026 Stop-Loss Renewal
Pending January data finalization, the organization is positioned for a cost-neutral renewal with improved maximum liability protection — a remarkable outcome given industry trend rates of 15-20%.
Future-Ready Innovation
The partnership continues to evolve with emerging solutions that promise additional value and improved member experience.
Recommended Enhancements for 2026-2027
1
Continue Specialized Fund
Maintain catastrophic claims protection that has delivered 10:1 ROI
2
Cancer Specialty Program
Implement targeted navigation for oncology cases with no upfront cost — estimated savings of $150k-$300k annually
3
Direct Primary Care
Localized concierge medicine model with projected 1.3:1 first-year return on investment
4
Cash Pay Program
Negotiate direct cash pricing for procedures, typically 40-60% below insurance rates
5
Incentive Plan Design
High-low benefit structure rewarding preventive care engagement with projected 1:13 ROI
Direct Primary Care: The Next Frontier
Projected Impact
Based on 86 participating employees at $97 per employee monthly cost:
  • Annual investment: $100,104
  • Conservative savings estimate: $130,000
  • Optimistic savings estimate: $150,156
  • Expected adoption rate: 20% in year one
Evidence-Based Outcomes
13%
Reduction in overall claims costs
41%
Reduction in ER visits per 1,000 members
20%
Reduction in inpatient hospital admissions
6%
Reduction in outpatient surgery spend
The Partnership Advantage
What Made This Transformation Possible
01
Strategic Vision
Moving beyond traditional insurance to a comprehensive value-based approach
02
Data-Driven Decisions
Leveraging AI and advanced analytics to identify opportunities and measure outcomes
03
Vendor Agnosticism
Selecting best-in-class partners based on performance, not relationships
04
Continuous Innovation
Implementing emerging solutions that deliver measurable value
05
Transparent Partnership
Complete visibility into costs, rebates, and performance metrics
Key Takeaways
$13.8M
Total savings delivered over five years through strategic benefits consulting
45%
Reduction in PEPM costs while improving network access and member experience
62%
Below market benchmark — sustainable competitive advantage in benefits costs
"This case study demonstrates that with the right strategic partner, organizations can dramatically reduce healthcare costs while simultaneously improving care quality and member satisfaction. The key is moving beyond traditional insurance relationships to embrace innovation, transparency, and data-driven decision making."
Ready to transform your benefits strategy? This organization's journey from $1,062 to $582 PEPM proves that sustainable savings and improved outcomes are achievable with expert guidance and innovative solutions.
Ready to Transform Your Benefits Strategy?
Let UBF help you achieve similar results for your organization.
Our Partnership Approach Offers:
Strategic Benefits Consulting
Expert guidance to navigate complex benefits landscapes.
Cost Reduction, Not Quality Reduction
Achieve significant savings without compromising employee care.
Innovative, Tailored Solutions
Customized plans designed to meet your specific organizational needs.
Transparent & Data-Driven Insights
Complete visibility into costs, performance, and strategic opportunities.
Take the Next Step
Contact us today to schedule a consultation and discover how we can help you reduce costs while improving employee satisfaction.
Contact Us
Phone: 510.207.2768
Email: alan.wang@ubf.consulting