CPHIMS

Kryijztoff Novotnaj

Until recently, small and middle-market employers may have felt excluded from a growing trend among larger, self-insured organizations: using analytics to harness the power of health benefits data for smarter plan design and decision-making. 

The door opened, though, with the passage of the Consolidated Appropriations Act (CAA) of 2021. Previously, benefits data tended to be closely held by carriers, but the CAA is entitled to access to all benefits data, including for pharmaceutical use and costs. The CAA is intended to provide more transparency over plan performance and cost drivers while financially obligating plan sponsors to ensure their plans are properly managed – and solvent. 

It’s a step forward, but what comes next once smaller employers have that access? The solution is to put the right resources in place to identify and head off root causes of risks to the health plan.

Analytics, informatics, or both?

Employers can start by understanding analytics and clinical informatics and their roles in driving better plan management. Academics explain the difference between them like this: analytics will tell you what is or has happened, and informatics will tell you why and what will be without intervention. 

In the best of all worlds, analytics and informatics work in tandem. Here’s an example: A claim for a patient with Cystic Fibrosis with pulmonary manifestations recently discharged from the hospital. With analytics, the cost, claim, and diagnosis are evaluated. With informatics, a medical lens is applied. Does the severity of the diagnosis precipitate the need for a high-cost medication such as Kalydeco or Trikafta? And if so, have all pre-authorizations been satisfied? And is the facility or provider even the appropriate liaison for the treatment?

The takeaways for health plan sponsors

Data analytics can show that certain costly conditions among plan members might set a plan on financial fire. However, it takes applying clinical informatics to the data to learn how those conditions are manifesting and at what risk to the plan.  

Clinical and administrative decision-making is improved by more thoroughly investigating the root causes of risks to the health plan, including plan design optimization, stop loss management, risk mitigation, and cost-containment strategies. 

The changed narrative

With full access to their data, mid-market employers are empowered to change the carrier’s narrative about their risk posture and its role in rate increases—shaping their vision for their health plan. 

But it takes getting complete data, for starters, and then utilizing clinical informatics to gather insights that inform new strategies – a road map that employers, not carriers, own.

"Clinical and administrative decision-making is improved by more thoroughly investigating the root causes of risks to the health plan, including plan design optimization, stop loss management, risk mitigation, and cost-containment strategies."

Ultimately, clinical informatics aims to get pre-emptive in managing risks before they become so bad that they can’t be controlled. Because, in exchange for transparency under the CAA, employers are obliged to ensure the plan is performing as expected in supporting optimal medical care – lest they become as legally liable for lapses as insurers.

Big employers with 1,000 or more lives can access analytics and informatics capabilities through big insurance brokers. However, most middle market brokers have a fragmented lineup of specialists to respond to client requests for clinical support or informatics. Some may have underwriters and actuaries. But very few have clinicians, pharmacists, and data analysts, too.

Middle-market employers can benefit by partnering with brokers equipped with this expertise. That’s how they will get the upper hand on their health plan risks and costs. No one wants their health plan to catch fire. But understanding why and where the embers might be smoldering has an immense and inarguable value.