How to Use Claims Data to Lower Healthcare Costs and Make an Impact on Employees

We can tell the story of our lives through data, statistics, and numerical information. Data can help us make intelligent choices about our lives, health, career, and finances.

Before purchasing a home, you probably considered several factors, including the asking price, the number of bathrooms and bedrooms, the proximity to your workplace and other amenities, and the price of mortgage insurance, among others. To get around in life, you are, perhaps unknowingly, making use of data.

Equally crucial, leading companies use data to improve working conditions and employee support, giving them a competitive edge in the race for talent. In these endeavors, employee benefit programs are frequently the focus.

As a business owner or advisor, consider the time of your most recent health insurance renewal. Were you able to access your data? If so, can you describe how you put it to good use? Likely, the health benefits carrier or consultant is not providing the data you need to manage those benefits actively.

Why is data so crucial, how can you acquire it, and how should you use it? You’ll find answers to all these questions and more in this article.

Why is Data Important for Managing Healthcare Benefits?

Data is power. 

When making decisions, it’s essential to have solid data to back up claims rather than relying on hearsay or assumptions. That could result in wasted time and resources, leading you to the wrong conclusion.

Companies that offer competitive benefits packages are better able to attract and retain top talent. However, businesses do not have infinite means to maintain generous benefits packages and keep up with ever-increasing regulations—the rising cost of benefits challenges their ability to compete in their respective markets.

So how can companies better position themselves to attract and retain the most talented employees? The solution lies in data.

Insights from data can reveal intricate interrelationships, such as how a shift in one part of a benefit can have far-reaching effects on another. It maximizes the value of health benefits for both employers and employees.

Getting the Data You Need

Better access to claims data and the ability to draw insights from it is one of the advantages of switching to a self-funded model. To better understand the drivers of costs, meet the needs of employees, and plan for future claim expenditures, you can have access to information about past claim activity and the services you’ve used. But are you getting this vital information from your insurer, or are they hiding it from you?

Because of the monopolistic practices of a few companies, more minor, fully insured businesses and their advisors often believe they have little or no access to healthcare data. We’re here to tell you that it couldn’t be further from the truth.

The fact is that prominent groups, health insurers, PBMs, and advisors hide information for their benefit. Companies risk overpaying for healthcare benefits if they don’t have that information to analyze, which could force employers to pass the cost to employees.

What steps can you take to guarantee that you will have access to the information you require to make sound judgments? This is where solutions like Rover Analytics come into play.

Rover gathers data on fully insured groups’ claims from over 100 medical, dental, vision, and prescription carriers. With tools like that, benefits consultants will have all the information at their disposal to conduct research, evaluate risks, and create a sound financial plan.

The Truth About Prescription Drugs (Rx)

The cost of providing health insurance to employees and their dependents continues to rise, with prescription drugs accounting for the most significant and fastest-growing share of that cost. Prescription drugs typically use 20-25% of the total cost but are trending at over 20% annually.

The good news is that only 1%-3% of members are responsible for 40%-60% of the total cost. The vast majority of those members are taking medications for which there are alternate sourcing options and Manufacturer Assistance Programs (MAP). Companies can cut its Rx costs in half with little effort if they have the proper setup, partners, and access to data.

Rx data can facilitate an individual’s access to the Manufacturer Assistance Program or the opportunity to source medication through the International Purchasing Program, which may be made available to the employee or their family members. While they will save an employer 70–80% on a given medication, they will also eliminate the cost for the employee or their family.

Additionally, most doctors approve generic versions of brand-name prescriptions because of the substantial savings their patients will realize. Generic versions of popular medicines are subject to extensive testing by the FDA to guarantee they are safe and effective. Companies can save thousands of dollars on pharmaceuticals if you encourage staff to switch to generic equivalents.

By compiling and analyzing relevant data, you may also discover that the company is paying significantly more than average for one of the employees’ medications. The plan advisor could look into price discrepancies at the level of the National Drug Code to see if they can get the price down to where it would be in line with the national average.

Using Data to Create a Strategy That Impacts Lives

If you don’t look at the data, you’ll be stuck in the same place while your business bears the costs of your complacency. Doing things in such a way will guarantee eventual obsolescence within a few years.

As a result of the consistent healthcare rate increases over the past two decades, many businesses are reevaluating their priorities. If you’re a business owner and your financial advisor causes you to lose money yearly, would you keep them on board? It stands to reason that you wouldn’t.

In many ways the health insurance industry continues to handle renewals in the same way it always has, causing employers to incur financial loses year over year. Unfortunately many companies are forced to pass these increases on to their employees or sacrifice other initiatives to cover the costs.

If companies don’t have access to competent advisors they will be compelled to provide their employees with fewer and more expensive benefits. As a result, many employees go bankrupt or forego necessary services, and most caring advisors are exhausted from trying to help.

Companies should demand more from their advisors and check that they are laying out a plan to help employees control costs through data analysis. Conversely, advisors should have higher expectations of their carriers, particularly regarding data accessibility.

When you carefully look at the data, you can see which factors impact employee health care costs the most. The data can help determine what wellness programs and initiatives are worth investing in.

For instance, look at claims data, and you may notice that the staff uses more expensive brand-name prescriptions. You can help them save money by providing information about the options, such as generic versions of those drugs. Reveal how their choices impact the prices of insurance claims (and the ultimate trickle-down effect it can have on the business).