Internal survey quantitative data proved accurate but incomplete. Micro-level data from Gallagher-led focus groups revealed that talent retention pivoted on an above-market medical plan.

Author: Thomas Rylko


Client summary

  • Large metro hospital
  • 12,000+ employees, majority mid-career women; largest group is nursing staff
  • Need to control costs
  • Talent attraction and retention issues

Challenge: Cost reduction and talent retention

A large metro hospital planned to introduce a high-deductible health plan (HDHP) offering significantly lower premiums in an effort to migrate employees from a costly copay medical plan. Leaders invited Gallagher to conduct a total rewards review to help retain experienced employees and maximize benefits spend.

Solution: Gallagher-facilitated survey and focus groups uncovered important micro-issues

Gallagher conducted an employee survey as part of a total rewards review. Results showed that mature hospital employees — high medical benefits users — ranked medical insurance as the third-most important benefit. Scores further demonstrated high satisfaction with the tier 1 copay medical benefits and specialty care delivered at their hospital.

Follow-up focus groups found employees would likely leave in response to significant changes in the copay medical benefits. Further, while employees valued their medical plan's quality and affordability, many could not take advantage of tier 1 on-site services.

Due to high housing costs near the hospital, most employees lived some distance away. Many who wanted to use the medical services found it difficult to access care after hours or on weekends. Focus groups also revealed dissatisfaction with long wait times for an initial visit.

Results: Leaders re-invested in the high-end medical plan as a market differentiator and retention strategy

The hospital's board rejected the HDHP migration plan and embraced the high-end copay medical plan, choosing not to decrease the benefit spend. Leaders saw the high-end plan as a strategy to retain current employees while serving as an important market differentiator to attract new talent.

Further in response to the data, leaders instituted an exception process. This move helped employees living at a distance from tier 1 services to take advantage of discounted top-ranked benefits until the hospital could expand its tier 1 services away from the main campus.

Gallagher's Compensation Consulting and Total Rewards team can help your organization strike the right balance of data to identify what employees really want and need to stay with the organization. Contact us for a conversation.


Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.