August 5, 2024

Uncover the economic benefits of medical management in your employee health plan

Creating an effective employee benefits plan is no easy feat. The market landscape is complex, and costs are continually on the rise. Employers are committed to providing the best for their employees. It’s essential for employers to comprehend their expenditures on a Per Employee, Per Month (PEPM) scale.

According to AHIP data, 82.5% of every health care dollar is spent on prescription drugs, health care providers and services. So, when it comes to health plan spend, there are several factors to consider.

Uncontrollable Factors:

-          Aging population

-          Advancements in medical technology

-          Regulatory changes

-          Inflation

Controllable Factors:

-          Utilization rates and medical necessity

-          Prescription drug costs

-          Increased prevalence of chronic diseases

-          Member education to improve consumerism

-          Plan design & provider networks

A self-funded or self-insured health plan provides the opportunity to impact the controllable factors within your health care spend. Your plan administrator should demonstrate how they are managing these 82.5% of your benefit plan costs – the area where you can manage risk. Managing the balance between care and cost leads to more sustainable and affordable health care benefits for employers and your employees.

Navigating the health system can be hard even when you understand how it works. Partnering with a TPA that works for the people behind the health plan is more vital than ever. Every engagement is an opportunity to improve health and control costs for members and health plans. Here are some examples of potential strategies a TPA can offer to address controllable spend, while also supporting better health outcomes.

Claims Management:

• Striking a balance between swift claims processing and detailed review is essential. Beyond auto-adjudication there are processes in place to manually review claims that require additional review, including those in excess of a certain dollar threshold. This approach not only ensures claim processing accuracy but also considers the significant effects on both employers and employees.

Case Management:

• Potential clinical programs should focus on individual care plans to guide members as they navigate critical health care needs. This could include guidance for chronic or complex condition management and support for transitions of care, such as after a hospital admission. By focusing on the most prevalent disease states and cost drivers in your plan population, case managers can proactively engage with members, communicate with providers, manage and improve conditions, and reduce unnecessary high-cost claims.

Wellness Programs:

• Based on plan trends, your TPA can help recommend and implement programs that promote healthy lifestyles, such as smoking cessation, weight management, and fitness programs. The also includes encouraging preventive care services to reduce the incidence of costly chronic diseases.

Evaluating Medical Necessity:

• Prior authorization or reviewing medical necessity of proposed treatments and managing complex cases ensures your members get the right care at the right time in the right setting.
• Utilization analytics: Analyzing utilization patterns to identify areas of overuse and implementing corrective measures.

Pharmacy Benefit Management:

• According to a report by Business Group on Health (BGH), 92% of employers are concerned about high-cost drugs in the pipeline, with 91% reporting concern about pharmacy cost trends overall. Your TPA can help you identify an ideal pharmacy benefit manager (PBM) as well and understand and implement strategies to address key Rx cost drivers. Chronic conditions are the primary drivers of pharmacy spend, underscoring the importance of early intervention and care plan compliance. By adopting more rigorous screenings, early intervention programs, and comprehensive lifestyle change support in connection with a case management program, high-cost claims can be managed.

Employee Education and Engagement:

• A TPA should also support you with educating employees about their benefits, how to use them effectively and the cost implications of their choices. This may include cost comparison tools and other resources to help employees understand the cost and quality of different medical services.

When you’re assessing your budget and PEPM, be sure to track the effectiveness of cost-containment strategies and wellness programs by monitoring changes in costs over time. To better manage the 82.5% of your health plan spend, it’s paramount to work with a partner who will help you use data analytics to identify cost drivers and develop strategies to mitigate them. In the complex world of health insurance, strategic guidance is not just beneficial — it’s essential.

Better understand what goes into your PEPM costs and learn what’s possible with a partnership that transcends traditional health benefit solutions, focusing on the people and businesses they support.