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Identifying health plan risks is a multi-faceted, complex and daunting undertaking for self-insured companies who wish to proactively mitigate rising healthcare costs. However, even those employers who haven’t invested in claims data analysis can make quick, significant gains by addressing population health management’s low-hanging fruit – prescriptions and encouraging appropriate care venues. At minimum, benefits managers should leverage tools to help identify cost centers and lower claims and copay costs. The following are table stakes and recommended action items:

Create more granular medication lists.

Are employees using non-formulary, compounded or specialty drugs when a cost-saving generic would have the same result? Step therapy and prior authorization can help, but will only get you so far. The data will reveal more “blind spots,” and catalog unique behaviors such as patients using multiple pharmacies.

Rein in multiple specialists/multiple PCP scenarios.

Some patients, the data will likely reveal, use multiple specialists and sometimes multiple primary care physicians – some in-network, some out. This can happen because a patient might split time between multiple work locations, is a chronic-care employee, or both. Coordinating care under a single PCP can reduce costs.

Generate next-generation ER utilization reports.

Often, urgent care will provide similar, but less expensive outcomes as emergency care. Encouraging patients to use urgent care—and avoid the ER copay—can boost a health plan’s bottom line. But you have to know more about ER utilization than you do now – you need to know when the ER is currently being used inappropriately and be able to predict when it might happen next.

Improve chronic care.

Wellness programs, preventive medicine and case managers all can help patient populations take better care of themselves, maintain their health and avoid ER visits, hospital admissions and readmissions. But it takes more than quick, occasional check-in phone calls.

The above action items provide just a few “table stakes” ways to improve health outcomes today, but ample health plan cost centers remain to be uncovered by drilling deeper into the data. Detailed and ongoing data analysis is the key to dash-boarding and finding where hidden healthcare costs reside. Looking at claims data and comparing costs to national benchmarks – adjusted for regional cost variation – can uncover hotspots where an employer can proactively address costs. The benefits manager who wishes to go above and beyond will need to ask the right questions at the individual level:


Is there a health plan member who uses the ED for non-emergency reasons?


How many plan members have a primary care physician and get appropriate preventive tests to stay healthy? 


What chronic health conditions are driving the most costs?

The ability to predict and address costly healthcare patterns linked to an individual’s behavior is the holy grail of data analysis for health plan performance. Employers need the ability to determine whether a particular employee is highly likely to result in excessive costs that could otherwise be moderated by alerting the local health provider to take immediate actions.


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