Combating Health Care Costs Through Data Integration and Cost Driver Identification

Combating Health Care Costs Through Data Integration and Cost Driver Identification

It’s news to no one that health care costs continue to burden consumers and employers of all sizes. Premiums rise without commensurate returns in improved access, quality, and meaningful outcomes. Instead, tensions arise where employers are tempted to shift more cost to employees.
Findings from the Kaiser Family Foundation’s 2018 Employer Health Benefits Survey show that the average premium for family coverage has increased 20% since 2013 and 55% since 2008.


Underpinning these costs is a constellation of increasing prevalence of chronic disease in the workforce, suboptimal use of acute care services, consumers’ fondness for or ignorance about using high-priced providers, and the challenges of navigating benefits design. Many employers have sought to remedy this with blunt strategies like pushing high deductible health plans (HDHPs) or severely restrict benefits. However, in our analysis, many employees do not understand the impact of such tradeoffs. Moreover, these strategies alone do not change the trajectory of healthcare risks and costs.


Realizing cost savings–as an employer, consumer, benefits consultant, or TPA–requires savvy analysis across multiple datasets, an acute sense of the local picture, negotiation chops, and concerted member engagement strategy


In this blog series outlined below, healthcare cost containment experts from zakipoint Health will walk through strategies to identify risks and cost drivers, actions to contain costs, and ways to track health and wellness outcomes. These can be used synergistically with HDHPs and Health Savings Accounts to incentivize more durable cost containment.


Map where your population is going for care:
Understand where your population is going for care, which providers for particular procedures, and how much cost is tied to those places of care

Map population risk:
Understand which conditions are driving costs now and are likely to in the future. Identify how comorbidities drive costs and risks, including behavioral health and chronic metabolic conditions. Close gaps in wellness and preventative care and optimize medication adherence and cost containment.


Once you have a mapped out utilization patterns and population risks, you can use the data to develop actions, such as:


Reference-based pricing:
Simulate the impact of a reference-based pricing strategy, using CMS reference price by procedure and by provider.

Using cost and quality data for top procedures by providers, you can understand the impact of different strategies like high-performance networks, preferred network, direct contracts, and proactively steer members to those providers.

Stop loss negotiations and management:
Use predictive analytics and clinical analysis on high-cost claimants to negotiate premiums and proactively manage high-cost members who are nearing their specification limits.

High-cost claimants:
Get a holistic view of your highest cost members and establish cost mitigation plans.

Pharmacy spending:
Pinpoint pharmacy trends and identify opportunities for cost-savings with generics, mail-order, and specialty strategies.

Emergency department utilization:
Assess avoidable ED utilization and promote the use of more appropriate care settings.


Pharmacy spending:
Pinpoint pharmacy trends and identify opportunities for cost-savings with generics, mail-order, and specialty strategies.

Chronic disease management:
Identify the costliest chronic conditions, promote high-quality programs to members, and track outcomes.


Whether you’re an employer, benefits consultant, or TPA, these topics should be top of mind as you figure out how to manage healthcare spending.

Broker interviews on what they want from their TPAs

Broker interviews on what they want from their TPAs

If you are a Third Party Administrator (TPA), you are most likely responsible for insurance claims and performing other admin services mainly in employee benefits. Other services provided by a TPA could include processing, negotiation of claims, actuarial consulting, retirement plan design, record-keeping etc. A TPA could provide other services depending on the contract signed.

We recently interviewed two brokers, Jack Wilkinson, a senior VP from Marsh & McLennan Agency LLC. company and another senior VP from Risk Strategies Company who have given us valuable insights into what they are looking for when it comes to their TPAs.

  1. What are you specifically looking for in a TPA?
    1. MMA – Access to managed care networks (if they have access to Anthem’s network, it is a major plus), ability to get creative around administering unique plan designs, ability to carve out Rx, and data analytics capabilities. Since UMR is a wholly owned TPA of United, they have a nice advantage in that they have a robust mangaged care network in conjunction with the flexibility of a true TPA.
    2. RS – Aside from claim accuracy and customer service metrics, I look carefully at how flexible a TPA is. Have they locked themselves into proprietary tools such as Verscend? Can they plug and play solutions as they are uncovered?
  2. How can TPAs differentiate themselves in the market?
    1. MMA – By having value added resources such as case management and data analytics. Having a strong network can outweigh anything though. Managed care discounts “sell” at the end of the day. That said, we do think reference based pricing will change the approach of overanalyzing managed care discounts moving forward.
    2. RS – TPAs can differentiate themselves by embracing innovation. For instance, reference based pricing, while not for everyone, is an interesting tool that employers could take advantage of. Can the TPA build it into their plans? Another differentiation would be the actual services that are able to provide over their competitors. For example, what different tools/services can they provide? Access to ERISA compliance attorneys? A Communications team? I also have an appreciation for TPAs that are transparent in how they are earning their money.
  3. How can they offer more value to your clients?
    1. MMA – Provide more robust disease/case management resources, offer better technology for enrollment either direct to TPA site or offering file feeds to benefit administration platforms.
    2. RS – The value will always derive from being able to manage costs effectively (and legally).
  4. What is the number one thing your clients are asking from a TPA?
    1. MMA – They are asking for help in determining the best way to get creative and innovative. Status quo is not sustainable and whatever a TPA can do to help solve the problem is well received. This includes risk management, analytics, creative plan designs, technology offered etc.
    2. RS – Flexibility combined with competitive discounts.

While the interviews themselves were quite enlightening, there were a few points that we picked up on based on the pain points discussed by the seasoned brokers:

  • When asked about differentiation, both Jack and Pauline mentioned that reference based pricing is a big differentiator when it comes to TPAs.
  • Technology and innovation are also important features that TPAs have to be in par with to succeed in the market.

It’s interesting to see what top brokers in the country are looking for in their TPAs especially with the market being volatile.




Why is it important to keep your employees engaged in healthcare?

Why is it important to keep your employees engaged in healthcare?

It may seem like a secondary option to some employers, especially, when they are mostly concerned with bringing the healthcare costs down. However, it’s two sides of the same coin. In the long run, employee engagement will not only help reduce costs by 20% but will help with reducing risks by 20%, thus resulting in a healthy and happy employee. As you invest in programs and solutions, impact is calculated if employees are engaged and using those programs and solutions.