For many CEOs and CFOs, health benefits packages are their second or third biggest annual expense, and the prices increase every year. This does not have to happen. While most companies with fully-funded plans endure price hikes of approximately 10% each year, self-funded groups can use their plan data to hold or even lower their annual health care expenses.
By examining their data, companies may develop strategies to slash pharmaceutical costs, guide employees on the best facilities for high-quality care, reduce claims expenses, and find new savings opportunities. With the correct processes in place, these businesses can make strategic plan decisions that lower costs over time and free capital for other business expenses.
The Best Source of Plan Data
The best source of your plan data comes from your employee claims. Claims data reveals:
- Where employees seek care
- What type of care they receive
- The price of that care
- What medications they take
- The price of these medications
This data alone isn’t helpful, however. For most companies, their data is jumbled and difficult to read. Because it’s pulled in from different sources and spread across different files, many business leaders are incapable of analyzing this data on their own. To fully leverage the data within their employee claims, they need outside help.
Finding a Data Partner
If you don’t have someone on your team who is capable of sifting through your plan data, partner with a data analytics company. If you’re unsure where to find one, talk to an experience benefits advisor for recommendations. An analytics specialist can pull the data from your disparate sources and organize it into a single format that is easy to read and comprehend.
With your data in a user-friendly format, you can start drawing conclusions and develop strategies that create savings in your health care plan, like eliminating excessive pharmaceutical expenses and reducing chronic illnesses among employees.
Where to Find Savings Opportunities in Your Data
Once your data is in a digestible format, you and your team can drill down for new opportunities. We recommend teams start by looking for:
- Excessive pharmaceutical costs. Are employees taking expensive name brand medications when cheaper, effective generics are available? Does your pharmacy benefits manager regularly return rebates? These are excellent starting points for lowering your pharmaceutical costs.
- Unhealthy habits and conditions among employees. Do your employees regularly visit the hospital for sprains and strains? Do they suffer from chronic illnesses like diabetes and arthritis? Some conditions and injuries are preventable with the right interventions.
- The facilities employees use. Price for services rarely connects with actual quality of services. Are employees visiting the region’s best hospitals, or do they rely on facilities with low-quality care that can lead to additional, expensive complications? By seeking better service, employees may actually lower their overall health care costs.
With your data in hand, you have the opportunity to make strategic plan decisions to lower costs. For example, if you notice a surge of claims around chronic weight-related illnesses, increase your weight-loss challenges and incentives. If employees aren’t visiting the doctor for annual checkups, encourage well checks on a regular basis or try offering telemedicine for easier access to care. With a proactive approach to employee health, you can slash costs by tackling issues before they become costly medical procedures.
Your plan data is a powerful tool for controlling your health costs. By developing the right strategies for sorting through your data, you can come away with a roadmap for delivering high-quality care without the excessive costs.