How Member Value Changes

In PE-controlled captive programs, growth becomes the primary value driver. This shifts focus from sustainable performance to rapid expansion, often leading to the subsidization of underperforming groups with new business premiums. Employers become valuable not for their improved health outcomes, but for their contribution to market share statistics. Member success becomes subordinate to program growth metrics.

The transition typically appears seamless initially. However, value erosion occurs gradually as premium-based revenue models increase alongside escalating costs. Standardized processes replace customized solutions, and your voice in program decisions becomes ceremonial rather than influential.

The Real Cost to Members

As PE-led programs prioritize scale, member control erodes systematically. Surplus retention policies redirect funds toward program growth instead of member returns. Stop loss strategies optimize for portfolio protection rather than member protection. You might get a seat at the table, but your ability to influence meaningful change is negligible.

Understanding Your Choice

Your choice of captive program makes you either a member or a number. Independent programs, structured with fee-based compensation models, maintain their focus on member performance rather than market share. Control remains with those who have the most at stake – the members themselves.

Before selecting a program manager, look beyond current performance metrics. Understand the decision-making structure, investigate the ownership model, examine the compensation framework, and evaluate the level of member autonomy. These factors will determine whether your future prioritizes your success or someone else’s growth story.