In Focus
News & Insight from Chelko Consulting
Employers and the Future of Healthcare Data
Everybody seems to agree that “big data” holds much promise (or potential) for better healthcare. To this end, the Affordable Care Act made it a priority to create more, and presumably, better health care data. However, with the rapid development of devices, tracking systems and data tools, who will benefit from this data: Patients? Plan sponsors (or payers)? Insurance companies? Healthcare providers? PBMs? Pharmaceutical and device manufacturers? Other enterprising service providers? read more…
Keeping Score: Combined PEPY Trend
Overall trend looks at medical and prescription drug costs (claims and administration expenses) combined on a per employee basis year-over-year. While the average is somewhat expected, the 27% difference from highest to lowest illustrates that trend is not as linear as we might often think. Knowing your trend rate is essential, but more importantly, knowing if you are trending to the mean of per employee per year cost benchmarks or futher away is critical to managing your plan.
How does your plan compare? Let us know if you would like to gain more insight into how to measure and manage your plan trend.
Spousal Coverage Audits Make Sense
With spousal exclusions or surcharges gaining popularity as a best practice to help organizations control the cost of benefits for everyone, the growing interest in spousal coverage audits (SCAs) makes sense. read more…
No Joke: Money Back from the Insurance Company
Individual stop loss insurance is an important way that many employers with self-funded health plans manage the financial risk associated with their large claimants. If you fall into this category, you’re probably no stranger to large stop loss rate increases following years of poor large claim experience. read more…
Keeping Score: Net Cost per Script
While it might not appear to be a telling indicator, net cost per script can quickly reveal a great deal about your current prescription drug plan performance.
The number can range substantially based on plan design, drug mix, and your current PBM deal. A high cost in this area could be an indication of excess prescription drug spend or issues with your current PBM arrangement.
How does your plan compare? Let us know if you would like to gain more insight into this spend and ways to manage costs.
Do Your Employees Understand their Health Insurance Choices?
Whether we admit it or not, this question has crossed the mind of many a benefits professional — especially as most of us head into open enrollment season. After all, if employees don’t understand their health plan options and appropriate factors to consider in the selection, they could end up making a costly mistake.
Ensuring employees are well educated will not only help them make the right choice, but ultimately lead to increased engagement and productivity. read more…
![Only PBMs Benefit from Rebate-driven System [UPDATE]](https://chelkogroup.com/wp-content/uploads/2018/07/0-1080x630.jpg)
Only PBMs Benefit from Rebate-driven System [UPDATE]
UPDATE: The following piece was originally posted to Linked In by Rick Chelko on June 28, 2018. Shortly thereafter, Rick met with a senior Health & Human Services (HHS) official working on drug pricing reform to discuss this and related issues. Ironically, the official expressed concern that the marketplace might view the removal of safe harbor protection for rebates to be “a windfall for Big Pharma.”
Nonetheless, we were pleased to see the Office of Inspector General (OIG) and HHS submit a proposed rule change on July 18 to the Office of Management and Budget (OMB). This proposed rule appears to remove the safe harbor protection for prescription drug rebates under the Federal Anti-Kickback Statute. If and when the rule will be finalized is unclear, as is the effective date. Here’s hoping that it will be soon.
Keeping Score: Members per Employee
In our most recent employer data collection efforts, we discovered many fascinating insights. One of those being the importance of understanding and managing your member ratio ― the number of members enrolled for every employee enrolled. The data showed a strong correlation between the member ratio and per employee per year (PEPY) health plan costs ― about $500 for every 0.1 change in the member ratio.
A high ratio may be the result of plan design, ineligible members enrolled, or just a factor of your plan’s demographics. Understanding your member ratio, the root cause, and how to manage this number is critical to controlling plan costs.
How does your plan compare? Let us know if you would like to gain more insight into this spend and ways to manage costs.
Keeping Score: LTD Income Replacement Benefit Percentage
The prevailing income replacement benefit percentage in Long Term Disability (LTD) plans is 60%. Roughly 62% of LTD plans proved a 60% benefit level. The next, but far less common, benefit levels are 50% and 67%. Likewise, the use of a 24-month “own-occupation” disability definition dominates the market with about three out of every four plans using this definition.
How does your LTD coverage compare? Let us know if you would like to better understand your disability benefit options and what you can do to manage these programs.
Deep Dive Roundtable Makes a Splash
We believe employers who know their numbers make better plan decisions. We also believe there is value in employers talking to each other about their respective challenges and solutions.
These are the fundamental principles behind our annual “Deep Dive” Roundtable in Columbus. It’s a simple concept really — as plan managers, it’s important to understand what’s driving costs. But tracking and analyzing health plan performance data can occasionally get lost in the recurring waves of vendor implementations and renewals, wellness events, open enrollment, HRIS system changes, or whatever else is the benefits priority of the quarter. read more…
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24651 Center Ridge Rd, Suite 110
Westlake, Ohio 44145
Phone: 440.892.2600
Fax: 440.892.8920
Email: info@chelkogroup.com
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Phone: 614.869.4140