Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!
Expand chart
Data: Kaiser Family Foundation; Chart: Axios Visuals

Conventional wisdom holds that big, self-insured companies do a better job controlling health care costs than firms that rely entirely on insurance companies to provide their workers’ coverage. But that’s not true.

Why it matters: Although a handful of big self-insured companies get a lot of attention for their cost-control efforts, the data tell a different story: Self-insured and fully insured companies are equally bad at controlling health care costs.

By the numbers: The average family premium for fully insured firms last year was a whopping $20,627.

  • For larger self-insured firms, it was $20,739.
  • There hasn't been a meaningful difference for the past 20 years.

Self-insured firms would seem to have an advantage because they cut out the middleman.

  • Big self-insured firms can contract directly with providers and limit their networks to only cover lower-cost providers.
  • They can implement the latest payment reforms and wellness programs, and even open up their own clinics.
  • And a few very large companies, including Disney, Safeway and Comcast, have received a lot of attention for their efforts.

Yes, but: Most large insured firms have implemented similar strategies. And they buy insurance from the same companies that administer self-insured plans.

  • Big companies also are often spread across the country and the world, which greatly diminishes their bargaining power. No firm or collection of firms has even close to the leverage Medicare and Medicaid have.

The fundamentals have not changed since I started studying corporate cost-control efforts at MIT decades ago.

  • Most firms live by the same unspoken rule: Do what you can to control health costs without angering the workers you need too much.
  • That’s especially true in strong economies with tighter labor markets.

Other dynamics may be at work, too.

  • Benefits officers do everything they can, but CEOs often serve on the boards of the best and most expensive hospitals and socialize with the leading doctors where they live.
  • Taking on the cost problem would mean reducing the incomes and revenues of people who have their ears.

The bottom line: Even large, self-insured companies with all the advantages still have a poor track record on cost control.

Go deeper

Updated 54 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Politics: Fauci says he accepted Biden's offer to be chief medical adviser "on the spot" — The recovery needs rocket fuel.
  2. Economy: U.S. economy adds 245,000 jobs in November as recovery slows — America's hidden depression: K-shaped recovery threatens Biden administration.
  3. Education: Devos extends federal student loan relief to Jan. 31
  4. States: New Mexico to allow hospitals to ration coronavirus medical care
  5. Vaccine: What vaccine trials still need to do.
  6. World: UN warns "2021 is literally going to be catastrophic"
  7. 🎧 Podcast: Former FDA chief Rob Califf on the vaccine approval process.
2 hours ago - Health

A safe, sane survival guide

Photo: Luka Dakskobler/SOPA Images/LightRocket via Getty Images

We all know, it’s getting worse.

Reality check: Here are a few things every one of us can do to stay safe and sane in coming months:

Biden's debut nightmare

President-elect Biden speaks in Wilmington on Nov. 24. Photo: Chandan Khanna/AFP via Getty Images

A dim, gloomy scene seems increasingly set for Joe Biden's debut as president.

The state of play: He'll address — virtually — a virus-weary nation, with record-high daily coronavirus deaths, a flu season near its peak, restaurants and small businesses shuttered by wintertime sickness and spread.