Perspectives

Reducing Risk Exposure in Self-Funded Health Plans: The Episode Advantage

Self-insured companies, PEOs, and captives all share a common challenge: health benefits are one of their largest—and least predictable—cost drivers. Traditional models expose them to volatility in claims, leaving employers at the mercy of trend inflation and random high-cost events.

Oxbridge Health’s Episode Benefit Plans flip this equation by introducing episode-based pricing, consumer agency, and actuarial levers that systematically reduce risk exposure.

In a traditional PPO or copay model, every service generates a separate claim—imaging, labs, specialist visits, procedures—all billed independently and unpredictably. Employers bear the brunt of fragmented costs, and reinsurers price accordingly.

Oxbridge’s model converts uncertainty into predictability. Each episode of care is a single, bundled price, guaranteed up front. That means knee replacements, maternity, or cancer treatments stop being open-ended risks and become line items that can be forecast, budgeted, and managed.

2. Front-End Winsorization of Risk

Other models attempt to blunt cost volatility with blunt instruments—reference-based pricing, high deductibles, variable copays, narrow networks—but they only shift risk, rather than controlling it.

Oxbridge achieves front-end winsorization by aligning the consumer’s decision with the employer’s financial protection.

• Consumers shop with transparent episode prices.
• Employers lock in a maximum spend per episode.
• Outlier risk is capped, not shifted back to employees or payers.

3. Four Levers of Control

Oxbridge introduces four dynamic “valves” that allow self-insured employers, PEOs, and captives to actively manage year-over-year trend:

• PPO Benefits – maintain traditional coverage alongside episodes.
• Allowance – employer sets the guaranteed contribution per episode.
• Non-Covered Corridor – protects against inappropriate or unrelated care creep.
• Shared Savings – employees share in savings when they choose lower-cost, high-quality providers.

These levers give employers precision tools to control volatility—something absent in traditional models.

4. Strengthening Captives and PEOs

For captives and PEOs, predictability is not just a financial advantage—it’s a growth strategy. More predictable claims mean:

• Lower reinsurance costs and more favorable treaty terms.
• Reduced volatility across pooled groups, stabilizing member renewals.
• A differentiated market position, offering a modern alternative to blunt cost-shifting strategies.

5. Turning Consumers into Risk Managers

The underutilized asset in healthcare has always been the consumer. By embedding guaranteed episode prices into the shopping experience, Oxbridge makes consumers active participants in cost control. Every informed decision they make reduces exposure for the employer, aligns incentives, and builds trust in the benefit plan.