Control Health Care Costs with Claims Data

Let the Data Tell the Story of Your Benefits Program

For employers constantly trying to manage employee health costs, the numbers don’t lie. Each year, surveys and research data from consultants, business groups, foundations and the government are compiled and published. And each year the story remains, for the most part, the same: increases.

Among large employers (with 1,000 or more employees), double-digit cost increases of the 1990s gave way to high single-digit growth throughout the 2000s, followed by gradual decreases in growth annually since the ACA became law in 2010.

Good news, bad news

According to this year’s surveys, employers should see that trend continue, for the most part. Mercer’s National Survey of Employer-Sponsored Health Plans revealed that employers expect a 4.2 percent health cost increase in 2016 – the lowest figure the study has ever reported. Meanwhile, PriceWaterhouseCoopers projects the 2016 growth in the cost of medical services to be a 15-year low 6.5 percent. In short, cost increases will most likely again be lower in 2016 than in most previous years.

But the industry surveys also contain additional details that point to some concerning trends – namely specialty prescription drug costs. Segal’s 2016 Health Plan Cost Trend Survey forecasts a 19 percent increase in specialty drug costs this year, while Wells Fargo predicts that specialty drugs will account for half of all prescription costs as soon as 2018. By any measure, these increases are unsustainable.

Large employers are responding

With these projected cost increases in mind, a review of employer cost control methods points to other trends taking root in the industry. Kaiser tracks the funding of employer-sponsored health plans in its annual Employer Health Benefits Survey, and this year reported that 90 percent of large employers are now self-funded. Meanwhile, the National Business Group on Health projects that, by 2018, 70 percent will offer voluntary benefits to employees, largely to support the growing prevalence of high-deductible health plans (HDHPs).

The recent analysis of benefits enrollment activity for large employers on the BENEFITFOCUS® Platform revealed that 58 percent of these groups offered at least one HDHP to employees for 2016, either alongside more traditional plans or exclusively as a “full replacement.” In situations where an HDHP was offered alongside a traditional plan, we found that employees chose the HDHP 41 percent of the time. Deeper analysis of this behavior showed that millennials (those born 1980 and 1998) were the most likely to elect an HDHP, with 44 percent of the age group opting for these plans when given the choice.

All of these data points provide a great overview of the current landscape. But in trying to decide what cost control measures will work best for your organization, more is needed.

Dig into your claims data

By integrating your medical claims, Rx claims, member demographics and more into a consolidated data warehouse, new details emerge. This aggregated data, with proven reporting and data analytics applications applied, can reveal the trends, cost drivers, extent of chronic conditions, member populations in need of care management and the plan design changes that will be most effective. The ability to drill into this data to monitor and analyze activity at the procedure code, diagnosis, prescription drug and provider levels uncovers insight that enables you to make truly informed decisions about plan design, cost control programs and vendors, carriers, and claims administrators.

BENEFITFOCUS® Advanced Analytics customers use our platform’s integrated health data elements and proprietary analytics applications to monitor, manage and model health plans. For example, Premier Consulting Associates, an employee benefits consulting firm based in Western New York, has successfully used these tools to help its clients identify trends, develop plan designs and audit vendor performance, especially in the prescription drug arena.

Premier reports great success in helping its employer groups save more than $500,000 through PBM rebate reconciliation. Analysis of the groups’ utilization of prescription drugs confirmed this opportunity to secure significant return on investment. By filtering integrated data to drill into key prescription details, Premier has added significant value to employer groups as a trusted advisor and consultant.

Making informed decisions about employer health plans and employee health care is at the heart of an effective analytics strategy. To facilitate effective decision-making by employees, employer HR administrators and benefits managers, as well as strategic benefit advisors and consultants, analytics tools must be easy to use and available to users at every level.

Learn more about how you can turn data into dollar-saving decisions in this free on-demand webinar!

Going to SHRM? Visit us at Booth #2525 and see the future of insight-driven benefits management.