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Mills - Reduce your health ins cost

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Reduce Your Health Insurance Cost By Knowing the Numbers

Leigh A. Mills, AAI, CIC, GBA
Vice President -Senior Consultant

Published in: Business, Economy & Finance
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Mills - Reduce your health ins cost

  1. 1. Reduce Your Health Insurance Cost By Knowing the Numbers Leigh A. Mills, AAI, CIC, GBA Vice President - Senior Consultant
  2. 2. ObjectivesCoaching How To…..  Understand  Be Strategic  Challenge  Negotiate  Impress
  3. 3. Claims Data – PMPM
  4. 4. Pooling Level
  5. 5. Benefit Changes
  6. 6. Trend
  7. 7. Medical Trend  Inflation (30%) • Increased cost of services & goods  Utilization (60%) • Technology • Aging Population • Government Mandates • Cost Shifting  Leverage (10%)
  8. 8. MidPoint Claims Data PeriodOct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep07 07 07 08 08 08 08 08 08 08 08 08 Plan Year RenewalFeb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 09 09 09 09 09 09 09 09 09 09 09 10March 2008 – January 2009 = 11 monthsFebruary 2009 – July 2009 = 7 monthsTotal Months of Trend is 18 months
  9. 9. Projected Claims in Excess of $100,000 aka Pooling Charge
  10. 10. Large Claims Added  Claimant deceased  Claimant no longer covered  Treatment completed  Unusual claim  Claim being covered by Medicare
  11. 11. Medical Loss RatioPPACA set MLR at 85%  Direct Claims Paid to Providers  Activities to Improve Healthcare Quality • Case Management • Care Coordination • Chronic Disease Management • Wellness Programs • Supporting Health Information Technology • Hospital Discharge Programs • Measures to improve patient safety and reduce medical errors
  12. 12. Credibility
  13. 13. Credibility (close enough for horseshoes)To Estimate:Number of covered employees x 20Then take the square root of thatnumberFor example:254 employees x 20 = 5080 and the square root is 71Your claims data is approximately 71% credible
  14. 14. Other Adjustments Underwriters have the Power to Give And the Power to Take Away
  15. 15. Leigh A. Mills, AAI, CIC, GBAThank You! Vice President, Senior Consultant Compass Consulting Group (904) 434-0822 Leigh.mills@compasscgi.com

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