On an unseasonably warm day in June, we at Chelko cooled off the best way we know how — by splashing into some data.
This year marked our sixth annual Deep Dive Roundtable, where leading employers from Ohio and beyond convened in Columbus to talk benefits management. The in-person event featured robust conversations around plan management strategies and benefit spend for the roughly 50 participating employers, allowing attendees to explore how their plans stacked up against others in the market. We also heard from Sam Zebarjadi of Amazon Care regarding the tech-giant’s efforts to develop market-changing digital healthcare services.
As in prior years, we took a data-centric approach to shed light on drivers of healthcare benefit costs and employer strategies to manage them. The analysis enabled participants to benchmark their 2021 plan metrics against peers, ranging from medical network “discounts” to specialty drug trend. This year’s event also featured a more historical look at the data, as we reflected on Deep Dive trends over time and revisited questions posed from prior year analyses. The result was a healthy mix of persistent trends from the past and some surprising new results. Here’s some of what we learned:
- The COVID-19 bounce back was real… and it was NOT spectacular. Following a relatively flat year of medical trend as COVID-19 dampened medical utilization during 2020, claims experience among employers surged in 2021 — to the tune of 11% higher than the prior year. We’re actively monitoring our clients’ 2022 spend levels to determine how their plans are trending in the new, high-inflation environment.
- The frequency of $1.0M+ claims actually dropped from the prior year! Good news, right? Not quite. The magnitude of these “jumbo” claims skyrocketed, with an increase of over $500,000 in the average claim size during this period.
- Our bold 2021 prediction that stop loss premiums would reach 10% of total healthcare spend by 2025 may not have been bold enough. With yet another year of medical spend driven by high-cost claimants, this alarming statistic could come true even sooner than that. This, coupled with the ongoing trend of increasing stop loss deductible levels, leaves plan sponsors exposed to more severe “catastrophic” risks than ever before.
- More than half of participating employers are now seeing the majority of their prescription spend attributable to specialty drugs. But more so than ever before, leading plan sponsors have demonstrated that they can control these costs in meaningful ways.
- With historical data to back it up, we encourage plan sponsors to find a TPA that is a collaborative, transparent partner — rather than the one offering the lowest network discount. Analyzing both network utilization and reported discount data over the six years of Deep Dive data shows no meaningful association between either metric and total medical plan spend.
- Offering a high deductible health plan can be a great alternative to a more traditional PPO plan, but employers should not expect cost savings in doing so. The historical data supports employers pricing plan options neutrally rather than encouraging participation in either direction.
- Finally, we learned that employers who consistently participate in the Deep Dive outperform the broader field! Keep measuring, keep striving — it pays off in the long run.
We sincerely appreciate everyone who shared their data and joined us in Columbus for the day. If you were unable to participate, please plan on joining us next year as we expand and refine our data in a collective effort to become better plan managers.