Pay Attention to the Diagnosis and Prognosis Data
When looking at the your claims data, you need to make sure you go deeper than just the numbers and the dates.
In every data set you review, you need to go identify the story behind the numbers and put the effort into identifying the people (if the data lends itself to member identification—just don’t abuse your power).
Don’t trust the the insurance company to look deep — tell the story behind your numbers before they make assumptions.
Sometimes when you see a $17,000 dollar claim, you see a $17,000 claim.
Insurance companies typically look at the same claim and assume the worse case scenario–like a $17,000 claim could easily end up costing $50,000 or $100,000.
When you look at $17,000, sometimes you can see the same claim will likely cost $0 in the future. Like, in the case of a COBRA participant in their 18th month of coverage.
Make sure you dig as deep as possible into your “shock” or “large” claims data. If you can identify that one or more of your prime offenders aren’t still eligible for your plan, you can save huge when looking for a new insurance company.
Run your claims against your own data modeler.
The big boys aren’t as sophisticated as you think. A quick tool from our Plan Advisor (smaller employers), Decision Master (groups over 150 employees) or an outside source like Truven Analytic’s can give you insight and expectations of what a just renewal should look like before you ship your plan out to bid.
And really, it is amazing how often the insurance vendor will gravitate towards the data-driven number you provide, if you choose to share your own research.
JC Cole, Jr.
About the author: JC joined the AG team back in 1992 and has a robust experience working with large employers, financial professionals and business entrepreneurs. He leans on the experience of his own OCD personality to highlight ways to bring order and harmony to our organization and to the businesses of our clients by focusing on simple and highly effective ways to operate smart, on time and ahead of schedule. He just wouldn't have it any other way!
About AG Insurance: AG Insurance (www.agiainc.com) helps employers and their employees with solutions focused on positive organizational impact and improved employee experiences.