In Focus

News & Insight from Chelko Consulting
Keeping Score: Know Your Net Cost

Keeping Score: Know Your Net Cost

Most employers benchmark their gross health plan cost on a per employee per year basis. The net amount employers pay (gross health plan costs minus employee payroll contributions) is also an important measure to track in support of sound plan management. As you can see, the amount can vary from one employer to another by thousands of dollars per employee.

Where do you fall in the range above? Knowing how that number matches up against your budget, benchmark, and last year should be a priority. It goes without saying that having answers to questions like this at your fingertips enables you to better manage your plan.

Let us know if you would like to learn more about answering this question, tracking your numbers, and better managing your plan.
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Mr. President: Please Write a New Prescription for the FDA

Mr. President: Please Write a New Prescription for the FDA

Dear Mr. President:

First of all, congratulations on your stunning victory. You’ve re-written the playbook on how to get elected president. Your campaign strategy and tactics will be studied by scholars and politicians alike for years to come.

What you are now reading is an “open letter.” It’s addressed to you, but also intended to have a wider readership. We know you’re dealing with a number of pressing matters right now, but we want to make sure that you are aware of an important issue impacting the health of our people, and our nation’s finances. read more…

Keeping Score: Ouch! Average Cost per Specialty Drug Script

Keeping Score: Ouch! Average Cost per Specialty Drug Script

Specialty drugs can carry hefty price tags. Our data shows companies see an average specialty drug cost per script of over $5,000 — with that number more than doubling for some. This high per drug cost demonstrates how just a few specialty prescriptions can have a dramatic impact on your plan.

Fortunately, there are several strategies employers can deploy to mitigate rapidly increasing specialty drug costs.
 
How do your plan results compare? Let us know if you would like to learn more about how to improve your score in this area.
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The Painful Truth: Opioids and Your Health Plan

The Painful Truth: Opioids and Your Health Plan

“You know, just about everybody out here is on painkiller drugs. They’ll steal it right out of your mail box.” That’s what one of our consultants was told by his aunt, who resides in semi-rural Portage County, Ohio. The same statement could be made to most benefits managers across the country, whether their aunts reside in a pastoral rural setting, the Ritalin-infested suburbs or the inner city. It may be easy to consider drug abuse – especially of prescription opioids – as “society’s problem.” But it is a problem for nearly all plan sponsors, particularly if it’s not high on their agenda. read more…

Keeping Score: Read This in Case of Emergency

Keeping Score: Read This in Case of Emergency

Emergency room visits can quickly add significant dollars to a plan spend and result in unnecessary or inappropriate care to members. Knowing how you’re performing in this area is essential to good plan management.

Studies have shown that up to 70% of emergency room visits are not for the treatment of true emergencies. At an added cost of $1,000 or so per visit, employers may be overspending up to $150 per plan member per year on unnecessary ER services.

How do your plan results compare? Let us know if you would like to learn more about how to improve your score in this area.
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Clipping the Coupons

Clipping the Coupons

Coupons providing discounts off the purchase price of goods and services have long since found a permanent and important place in shoppers’ purchase planning since Coca Cola offered the first American discount coupons in 1888. From canned vegetables to golf course tee times, the lure to shoppers of using a discount coupon is that they will pay a lower price for the purchase of the named good or service. Many of these are what economists call price elastic, meaning that sales will increase when the purchase price is lowered, and decrease when the price is raised. read more…

Keeping Score: How does your specialty drug spend stack up?

Keeping Score: How does your specialty drug spend stack up?

Specialty drugs have quickly become a significant portion of drug benefit spend. This is driven by less than 1% of claimants and calls for very specific and active management.
 
Although not nearly as visible, comparable amounts are being spent within medical benefit programs. Fortunately, there are several strategies that employers can deploy to mitigate rapidly increasing specialty drug costs.
 
How do your plan results compare? Let us know if you would like to learn more about how to improve your score in this area.
 
*From Chelko Consulting Group’s proprietary database of employer results. read more…

Follow the Money: Connecting Employee Income and Health Plan Costs

Follow the Money: Connecting Employee Income and Health Plan Costs

Many benefits managers are data-hungry. They know that intuition may lead to insight but also that probability and not mere possibility requires evidence. So, they pour over charts and tables from their TPAs, PBMs and advisors, looking for relationships between variables like health plan cost, usage, medical conditions, places of service and the differential effectiveness of providers. Often, the data analysis focuses on plan member cohorts: are our costs coming from one plant or division more than others? Is there a greater prevalence of chronic disease in certain geographical areas? Benefits managers are always trying to understand why things are the way they are, so that they can take action where it will have the greatest impact on cost and usage. In this search for meaningful correlations, there is good reason for benefits managers to use the old phrase, “follow the money,” in a way that most probably have not. read more…

Outsourcing the Baby with the Bathwater?

Outsourcing the Baby with the Bathwater?

“An outsourcing increase is a positive thing for benefits departments. Benefits staff are working smarter and more efficiently by choosing the mix of outsourcing, co-sourcing and insourcing that’s right for them. More benefits departments are adding staff members, creating balance and strategic focus among departments.”

 

Julie Stich
Research Director, CEBS
speaking at the International Foundation of Employee Benefits Plans

Benefits managers are inveterate trend watchers. How does this year’s trend in specialty drug costs project for next year? And we watch each other – is there any trend in the kinds of changes other benefits managers are making? For many of us, the worst kind of surprise is to be told of a new benefits trend from our boss rather than the other way around.

One of the trends in benefits that is capturing more benefits managers’ attention is outsourcing. For most benefit managers, outsourcing a significant portion of their department’s activities is not new. How long has it been since we outsourced the claims administration of our medical plans? read more…

It is Well with My Soul

It is Well with My Soul

“There is almost always a long tail of possibility, however thin. What’s wrong with looking for it? Nothing, it seems to me, unless it means we have failed to prepare for the outcome that’s vastly more probable. The trouble is that we’ve built our medical system and culture around the long tail. We’ve created a multi-trillion dollar edifice for dispensing the equivalent of lottery tickets – and have only the rudiments of a system to prepare patients for the near certainty that those tickets will not win. Hope is not a plan, but hope is our plan.”

 

Atul Gawande, MD
Being Mortal

We’re all gonna’ die. No matter if we eat kale three times a day, work out with a personal trainer and somehow achieve a sense of tranquility with our world, we’re all gonna’ die. It’s only when and how that are unknowable now. For a few of us, it will be quickly – a car accident or a massive heart attack. For many of us, it will be as the result of a lingering disease, like cancer, or the gradual breaking down of organs and tissues and systems. In other words, it will be a death seen coming, taking time, with some symptoms treatable, but costing us quality of a life not much extended. The conclusion will be inevitable. read more…

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