Selecting a New Health Plan Using a Systematic Decision-Making Process

Guardian has provided our health insurance coverage since 2004. We have been happy with them, but we're hearing rumors that they are getting out of the health insurance business and we certainly don't want to be the last ones on a sinking ship. We worked with our broker, Mark Sager at Alliant, to put our health insurance out for bid this year.

A colleague, Karen Niles, had introduced some of us to the Kepner-Tregoe approach to decision making and we decided to use it in selecting a new health insurance carrier. The approach helps decision makers use weighted objectives to guide decision making, evaluate alternatives against objectives, and document recommendations by showing the structured thinking behind the decision.

In this case, the objective was pretty obvious -- Choose a new insurance company to partner with and provide health insurance coverage to the ASHA staff and retirees. Mark brought us bids from three insurance companies to consider -- United Health Care, Aetna, and Carefirst.

We solicited feedback from everywhere we could think of... we posted a notice to the staff and our retirees that we would be making a change and asked them to share any experiences they had with the carriers we were considering, we posted questions on Facebook and Twitter, asked for feedback from our current and former billing and flex plan administrators, and wellness partners. We also did a fairly extensive internet search. We captured all this on printed out emails, index cards and reports and hung it on a bulletin board. We wound up with an overwhelming amount of feedback. I met with a colleague in research, Mike Jeffries. Mike mentioned Edward Tufte's work and he suggested that we cut out all the extraneous information, so I spent a little time with a pair of scissors, some tape and a highlighter. This made a surprisingly big difference. (I wish I had a before picture so that you could see the difference.)

We used this feedback to brainstorm our objectives. Then we broke the objectives into musts and wants and determined what we would use as an indicator for each factor. We met with each of the carriers to determine if they could meet all of our musts. United Health Care and Aetna made it through this first round of screening.

We had a long list of wants and we spent a Friday afternoon weighting them. Because the list was so long, we categorized the wants and then grouped them on note cards organizing them from most to least important by category. This helped us to assign weights using a scale of 1 to 10 with 10 being the best satisfier. All this information was entered into a spreadsheet. United Health Care and Aetna came back in to meet with us a second time and we explored each factor and scored the carriers as to how well they satisfied each want. The process was somewhat tedious and continued via email after the meetings. It forced us to make sure we were comparing apples to apples and helped us to maintain a perspective that went beyond our liking one companies' presentation more than the other. Here's the spreadsheet.

Quotes 2010

You can see that United came out on top -- 1694 to 1681. This approach allowed us to distinguish the best satisfier from two very good options. We also checked references for United and Aetna and did a detailed cost comparison.

In addition to aiding us in making a decision, our approach conveyed our priorities to the carriers and that we are interested in creating a long term partnership. I look forward to working with the team at United Healthcare.