The SHBCA Framework
A business economics framework for evaluating whether a group health plan's cost structure still fits the company funding it.
Most employers evaluate health plan costs one renewal at a time. The more relevant question is whether Health Plan CAGR remains aligned with revenue growth, margin trends, and EBITDA performance.
That question matters regardless of renewal timing.
Health Plan CAGR
Compared againts.
Revenue
Margin
EBITDA
The Renewal Is Only the Output
After 37 years in the group health benefits market, I have observed one thing consistently: The renewal rarely tells the full story. The renewal is the output. The more important question is what economic structures are producing it.
The Core Question
Has years of compounding health plan cost growth created economic misalignment with the economics of the business?
Most companies know their revenue growth rate. Most know their margin trends. Most know their EBITDA performance. Few know their Health Plan CAGR. That makes this more than an insurance issue. It is a business economics issue.
The Framework
The Renewal Is the Output
The renewal is the visible result. Reviewing it matters. But reviewing only the renewal may miss the structures producing it.
Health Plan Costs Compound Health plan costs compound over time
The problem begins when health plan costs grow faster than revenue, margin, EBITDA, or pricing power.
Structure Drives Cost
The deductible is not the structure. The copay is not the structure. The out-of-pocket maximum is not the structure. Those are benefit features. The reimbursement structure underneath the health plan influences the cost of the plan.
Analysis Determines Alignment
The framework raises the question. The analysis answers it.
HR May Administer the Plan. The Business Funds the Plan.
Human Resources may manage the benefits process. But the economics of the health plan belong to the business funding it. That is why SHBCA is designed for CEOs, CFOs, owners, presidents, and senior executives responsible for operating expense, margin pressure, EBITDA, cash flow, and long-term sustainability.
The issue is not simply whether the benefits are good. The issue is whether the company is funding a health plan structure that still makes economic sense
HPESA Measures the Gap
The Health Plan Economic Sustainability Analysis, or HPESA, evaluates whether Health Plan Cost Growth remains aligned with the economics of the business funding it. HPESA compares health plan cost trend against revenue, margin, EBITDA, renewal history, and funding structure. The objective is to determine whether economic alignment exists and, if not, measure the size of the gap.
SOBA Evaluates the Alternatives
If HPESA identifies economic misalignment, the Second Opinion Benefits Analysis, or SOBA, evaluates whether a more efficient group health plan structure may exist. The objective is not simply a lower premium. The objective is a better long-term economic outcome
What the Website Cannot Tell You
This page can explain the framework. It cannot determine whether the framework applies to your company. That answer depends on your actual health plan cost history, renewal pattern, funding arrangement, business economics, and realistic alternative structures. The framework does not assume your current plan is wrong. It determines whether the structure deserves deeper economic review.
The Ultimate Question
In a world full of group health plans, which structure best aligns with the current and future economics of your business? I do not know right now. But when we complete the analysis, you will tell me.
Request a Plan Structure Review
Want to know whether your current health plan structure still fits the economics of your business? A short conversation will determine whether the current structure deserves deeper economic review.