Short answer: Self-funded plans can use levers a fully insured plan can’t easily access: reference-based pricing, PBM carve-outs with transparent pharmacy contracts, narrow or high-performance networks, care navigation and advocacy, centers of excellence, and direct provider contracting.
Because a self-funded employer keeps the savings, it has a direct incentive to lower the claims trend. Common levers include:
Pharmacy: carving the PBM out of the medical carrier and using a transparent, pass-through contract; managing specialty and GLP-1 drugs with clinical criteria. Facility pricing: reference-based pricing (paying a multiple of Medicare) or steering to centers of excellence for high-cost procedures. Networks: narrow or high-performance networks that reward efficient providers. Member support: care navigation and advocacy that guide employees to the right, cost-effective care.
Each lever trades some member convenience or choice for savings, so the art is combining them in a way the workforce will accept.