As an employer, you’re responsible for reviewing health plan options and ensuring you make the right decisions when it comes to your employee benefit offerings. One of the biggest challenges employers face is choosing the best benefits for their employees while also keeping cost in mind.

But what if you could control and reduce your costs without sacrificing the quality of your benefit offerings? Having a clear understanding of how your members are utilizing your plan is an essential first step towards controlling costs. By looking at your medical and pharmacy claims data you can determine the top cost drivers of your plan.

Here are three questions you can ask to help identify the main cost drivers of your plan:

  1. Are members using the emergency room for actual emergencies?

According to the Centers for Disease Control, U.S. emergency rooms record more than 130 million visits a year. Many of these visits could have been handled by a primary care doctor or urgent care clinic for a fraction of the cost. If there is ER misuse in your employee population, put in communication strategies or programs to help give members better alternatives to care.

  1. Are members going in and getting their correct preventative screening?

This is the easiest way to find conditions that can turn into high-cost claimants if not taken care of. By educating your employees and incentivizing them to see their doctor on a consistent basis, health issues will be caught early, and you’ll likely avoid significant claims costs down the road.

  1. Are members choosing generic drugs over the brand-name alternatives?

On average a generic drug is 80-85% less expensive than the brand-named drug. If members choose generic drugs over brand drugs, you can lower your overall total prescription drug spend.

There are many advantages to having your plan’s data available. By starting with these three member services, you can start to identify the overall cost drivers of your plan and formulate strategies to control these costs. Making plan design changes, implementing disease management programs and wellness initiatives, and utilizing outside vendors such as telemedicine will help you control cost.

Questions? Contact an MMA advisor to learn how we can help you use data analytics to achieve measurable results.

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