Everyone understands the importance of numbers. But understanding how they apply to your health plan and the actions they suggest is the true story.
The financial reports generated by our Financial and Analytic Services (FAS) team gives clients a month-to-month look at how their health plan is running, so they’re never blindsided.
Jim Brown, who oversees the FAS department as Director of Reporting and Analytics Services, shares his insight on how reporting helps employers.
“We can show a client the premium they pay, the claims they pay (including catastrophic claims), and the associated loss ratio. That’s important information for budgeting. Depending on whether they are self-funded or fully insured, these reports help predict what the renewal will be or what the anticipated budget should be for next year. Those claims and how they run in the first few months of the year are going to be front and center when the renewal is calculated,” Brown says.
So if your claims are higher, you can anticipate a higher renewal. Likewise, if your claims are lower, then you can anticipate a lower renewal. It reduces the guesswork and stress that comes with unknown or unforeseen future costs.
A Lens Into the Future
“Data analytics” is something of a buzzword. It is often associated with the world outside of health care. Now it’s possible to use data analytics to predict areas of risk within a member population and future claims costs. Insurance brokers spend large amounts of time and resources to collect massive amounts of data, but all too often don’t know how to turn those numbers into an effective cost-saving strategy.
Collecting data is easy. It’s what you do with the data that truly counts. Utilizing and creating a strategy around those numbers is what separates a data analytics team from a data collections team. The reports and numbers generated by analytic experts help bring clarity to benefit designs and decisions.
Employers can begin tailoring their benefit strategies so they not only meet the needs of their workforce today, but create long-term solutions that mitigate future risk.
McGohan Brabender’s model exemplifies data analytics done right. We partner with Benefitfocus to create an analytics report package designed to reveal the story behind the numbers. Our highly-trained, experienced financial analysts dive deep into the numbers finding areas of concern and potential gaps in care and then offer solutions for a happier, healthier workforce.
This crucial information provides an eye-opening look at the future liabilities of your company and points out potential future diseases that may drive up your claims costs. By creating a benefits strategy that is tailored toward reducing these claims, you can provide the right resources and benefits for your workforce.
Cultivating a Health Management Strategy
Focusing on the 87-cents of the dollar, those claims costs beyond the 13-cent cost of the health plan, data analytics provides transparency into these costs so employers can target their health management strategy in ways that will have the greatest impact. The analytics piece is critical in showing employers the fine details within the plan such as how many people are non-compliant with their diabetes medication or how many asthmatics are on the plan, and how large claims are really driving total costs. A much better way to dive into the true cost of an employer’s plan and help create strategies and interventions to contain costs.
By identifying and understanding current and potential risks early, employers can target a wellness plan that meets employees’ health needs, and begin building an engagement strategy that helps communicate those benefits to their workforce. The data is then used as the “proof in the pudding” to enhance employee engagement, manage cost savings and measure ROI.
Studies have shown that members who have a primary care physician (PCP) have lower healthcare costs overall than those members without a PCP. These relationships have been proven to lower unnecessary emergency room visits, which one study has shown drives the national health care costs up to between $5 billion and $7 billion each year. Additionally, primary care physicians help guard against long-term claims by encouraging preventive measures and providing disease management.
“Within a population we can identify the number of people with no claims,” Brown said.
“If someone has no claims through the year, believe it or not that’s bad. That means they’re not going to the doctor to obtain preventive care. Now, if we see an employee with one claim for $100 from a PCP physical, that’s fantastic. That means they’re getting their physical and they have no other illnesses.
“But if they’re not going to the doctor at all, that’s a big red flag. A person may unknowingly have high blood pressure or high cholesterol. The following year they could end up going to go to the hospital with a heart attack and incur a $100,000+ claim. Data analytics allows employers to see how many members are using healthcare, and what members have gaps in care. The employers can use their wellness strategy to encourage members to have a yearly PCP visit and the associated preventive care.” Brown says.
Reporting and Data Analytics leads to greater understanding of the true expenses within your health plan, the potential risk among your members, and the overall value of your wellness strategy. McGohan Brabender recognized early on the potential of data analytics on health plans, and has built an entire team dedicated to helping our clients manage claims and improve health, now and into the future.