What a great movie and inspiring story! Of course, if you’ve seen the movie, you know that much of the story is really about the contrast and tension between the team of Carroll Shelby/Ken Miles and the venerable industry giant, Ford Motor Company. Ford had the industry might, but it couldn’t leverage its resources sufficiently to beat Enzo Ferrari and his team.
All the history. All the resources. All the might. But it still couldn’t perform at the highest level. That is until they went outside the company to get designer Carroll Shelby and driver Ken Miles. Bringing in a different viewpoint, turned into a team with the passion and hands-on ability to win.
Why am I retelling this story? It came to my mind the other day when a venerable benefits consulting firm challenged our trend assumptions relative to a mutual client’s health plan. The global consulting firm serves as the plan’s actuary, and we as its drug benefits manager.
They recommended using 10% trend in the plan’s forecast to account for expected drug usage and price increases. We, on the other hand, were advising around 6%, and they wanted us to justify our lower estimate (which the firm determined was outside their underwriting standards).
No problem. Especially considering this is a client we’ve worked with for more than five years and the plan has experienced negative trend (cost reductions) over that period. Year after year, plan costs have decreased because of hands-on decision making and management by the client, its PBM, and our consulting team. And this is a plan with about 50,000 members.
This success is not a matter of luck. It’s the direct result of paying attention to trends and cost-drivers, formulating management plans, and executing them. In other words, getting in the car and figuring out how to win instead of watching from the ivory tower and wondering why the results aren’t better.
If you don’t want to just stand in the observation tower and watch costs go up by double digits, let us know. We would love to get our hands on your car and take it for a spin.