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December 2023  Volume 21, Number 12        

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How Claims Data Analyses Can Make Healthcare More Affordable

Employer-sponsored health insurance represents the single largest source of healthcare coverage in the U.S., accounting for roughly $1.3 trillion in annual spending. Over the past decade alone, average family premiums for employer plans have soared to over $22,000 per year, with workers contributing thousands more in deductibles and other cost-sharing.

This trajectory is unsustainable for many businesses and their employees. Faced with unrelenting premium hikes, employers have been forced to cut benefits, shift more costs to workers, or drop coverage entirely — none of which helps attract and retain talent.

Yet amid these challenges, a solution lies in leveraging data analytics to inform benefits strategies. By taking a proactive, data-driven approach, employers can gain much-needed control over costs while still delivering robust care for their workforce.

Transformative Power of Claims Data

At the heart of the data-powered solution is health insurance claims information. By aggregating and analyzing real-time claims data, self-funded employers can gain insight into cost drivers, utilization patterns, network needs, and other metrics that shape health plan design and management.

Armed with this intelligence, employers can implement targeted interventions to bend the cost curve and improve quality. For example, claims data may reveal high-cost drugs or procedures ripe for steering programs aimed at shifting utilization to more cost-effective alternatives with comparable outcomes.

According to recent research, self-funded employers using advanced data analytics and management achieved 11-22% lower cost growth over four years compared to employers retaining traditional unmodified plans.

This evidence makes a compelling case for data-driven benefits strategies as a key pillar of sustainable employee healthcare provision.

Perils of Passivity

In contrast, many employers still take a passive role in managing health benefits, effectively outsourcing to large insurance carriers that administer the plans. In many cases, however, these carriers lack the incentives and customization ability to truly help employers achieve cost objectives and benefit priorities.

This detachment from benefits decision-making has consequences, including:

  • Rising spending as chronic conditions worsen when care is delayed or rationed due to unaffordable out-of-pocket costs. Minor conditions often escalate into major, costlier episodes.
  • High medical debt that financially stresses employees and hurts productivity. Nearly 70% of U.S. adults report being impacted by medical debt, with amounts frequently snowballing to bankruptcy.
  • Lagging health outcomes and lost productivity as employees struggle to navigate the system and make fully informed choices independently.
  • Lost savings opportunities from failing to guide employees toward lower cost but equally effective services. Many traditional carriers lack the analytical capabilities and focus on the employer's interests to facilitate optimization.

Employer Opportunity

Fortunately, employers have the incentive and ability to take control of employee healthcare in ways carriers cannot. As the payers, employers must demand value for the substantial premium investment made on behalf of their workforce.

This entails providing resources to help employees make wise choices regarding providers, treatments, and medications. Tools like navigation assistance, decision support, and patient advocates can steer workers toward high-value care.

It also means using financial incentives to encourage cost-effective options. Benefit designs that reduce barriers through lower copays and other rewards can maximize the use of lower-cost, high-quality providers, labs, drugs, and facilities.

Multifaceted communication is vital for promoting engagement with health plan resources and incentives via email, text, posters, videos, and more. This ensures employees understand what is available and how to use it.

Embracing Data Analysis for Shared Success

While unraveling healthcare challenges can seem daunting, claims data analysis lights the way. Strategic data provides employers a foothold amid the storm.

The first step is committing to playing an active role in benefits management rather than just accepting cookie-cutter one-size-fits-none plans. Continuous claims data monitoring and plan refinement prepare employers to adeptly navigate the evolving healthcare landscape.

With the right advisors, data, and willingness to adapt, employers can devise more productive benefits strategies tailored to their populations and priorities. Employees will respond with engagement and loyalty.

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In this issue:

This Just In ... Estate Planning: The New Must-Have Benefit

What’s Driving Benefit Costs Up 7% for 2024?

How Loss of Childcare Funding Will Impact the Workplace

How Claims Data Analyses Can Make Healthcare More Affordable

Support Your Staff As They Transition Back to Student Loan Payments



The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher's permission. All rights reserved. ©2023 Smarts Publishing https://smartspublishing.com/ Tel. 877-762-7877.