Corporate Health Care Benefits Management, Cost Control, IT ST4US

By pjain      Published April 1, 2021, 11:21 p.m. in blog Health   

Corporate Health Costs

Cost-Plus Self Insured plans dominate

Procurement and delivery of health benefits a supply chain just like steel, parts and office supplies. But Health care Scupply chains are managed inefficiently.

Employers purchase a multiyear, generalized supply of health benefits from insurance companies (health plans) because sufficient data is not available to understand exactly what types of services will be needed, at what time, and how much.

This OVERBUYING or overstocking is then consumed by employees, their dependents, and retirees over the term of the contract, where sometimes the stock is too much, sometimes too little, and sometimes the wrong type. The providers will get paid regardless (no cost controls by intermediaries as they are cost-plus).

Employers have been unable to hold their health benefits suppliers accountable to financial performance targets and Six Sigma quality levels, even though they have been very successful in their other supply chains within retail and manufacturing.

Rise of the Third-Party Employer Service Providers - Collective Health

They can greatly reduce cost of plans, and allow better management than employers themselves.

Corporate Health Costs Control for Self-Insured

As corporate health care costs inflate 15%+ per year, large employers like GM whose health costs exceed cost of steel in their cars leading to pushing production to Canada and Mexico. Money losing USPS spent $4b in 2003 and causing massive

As employers fathom the impact of looming double-digit increases in health benefits costs and weigh their options, they should strongly consider health benefits SCI software to enable strategic decision making across the health benefits supply chain and provide CFOs the visibility to the financial performance of health benefits.

After GFC of 2008, CFOs started to recognize the impact of health benefits costs on corporate profitability. In order to comply with Sarbanes-Oxley and sign off on corporate financial statements, CFOs need timely visibility to health benefits spending.

--- Health-benefits IT and Data Integration at Enterprise Level

CURRENT HEALTH IT. A number of companies provide health plans, hospitals, and employers with aggregate data that addresses pharmacy cost or medical cost by health plan. These solutions lack an enterprise technology platform that enables every user with the same set of facts, extends beyond the enterprise to suppliers, and scales to analyze large volumes of health claims data in real-time.

UUID, PRIVACY cripple Enterprise Access. You Cannot see or approve Costs.

DATA SILOs contain the health data that are not integrated. For example, benefits manager responsible for the pharmacy or medical benefit do not always have visibility to employees who are on disability leave, creating a fractured view of total health benefits costs. Any programmatic strategy to reduce pharmacy costs does not capture the impact on employee productivity and in turn, total lost revenue per employee.

Data integration challenges abound given the number and volume of heterogeneous data sources that need to be integrated to address specific business questions. Data needs to be extracted, transformed and loaded on a monthly or quarterly basis from claims systems for pharmacy (Merck-Medco, Advance PCS), medical (United Healthcare, Aetna, Cigna, Blue Cross Blue Shield), disability (MetLife), enrollment, absence, health surveys as well as from existing ERP and CRM systems.

Specialized Health Domain expertise is Lacking. Health benefits SCI software should include domain expertise pertaining to benefits, clinical drivers of cost and utilization, and enterprise technologies like business intelligence and ERP in the product and the people. It should come packaged with mature data models that can satisfy the predominant business requirements of customers and be extensible to facilitate easy customization.

Advanced Health IT Benefits Management

A new category of "Health benefits supply chain intelligence software" started being touted in 2005+ to enable employer purchasing power and drive accurate financial reporting of health benefits strategies.

  • Employee benefits
  • Healthcare IT
  • HIE

These provides a suite of packaged analytic applications that encapsulate the health benefits supply chain and complement existing investments in enterprise resource planning (ERP) systems like Peoplesoft and SAP.

  1. Executive dashboard for Finance and Human Resources: CFOs and human resource executives should have timely visibility to the financial performance of health benefits through a web-enabled Financial Performance Management (FPM) dashboard that monitors financial, enrollment and utilization metrics. FPM enables:

  2. A single view of health benefits spending across Finance and HR to be in compliance with Sarbanes-Oxley reporting;

  3. Efficient management of health benefits budgets and strategies; and
  4. A link between the clinical drivers of health benefits costs and their impact on employee productivity (total lost revenue per employee) and operational performance

  5. Packaged analytic applications. For employers to make timely business decisions on health benefits strategies and monitor the performance of their suppliers, analytic applications that provide focused functionality towards HR benefits managers need to be enabled. They should include packaged key performance indicators for health and productivity, best-practice metrics for the top conditions like diabetes, asthma, heart disease, high-risk pregnancy, and depression that drive over 80% of employer costs, and analytic workflows that proactively monitor the performance of health plans, hospitals, disease management programs, and pharmacy benefit managersv.

  6. Supply Chain Analytics (SCA) provides business users with standard and ad-hoc reports that integrate data across ERP systems, pharmacy, medical, enrollment, short-term and long-term disability (STD/LTD), workers’ compensation, and health surveys to make informed purchasing decisions.

  7. Supplier Performance Management (SPM) includes packaged analytic workflows that enable effective health benefits strategies such as benefit plan consolidation, targeted disease management programs, and implementation of efficient hospital networks.

  8. Permission-based health portal for beneficiaries (employees, dependents, and retirees): Beneficiaries play a pivotal role in the health benefits supply chain and demand quality of care that is balanced with the cost of health benefits. Beneficiary Relationship Management (BRM) allows employers to implement a permission-based health communication channel with beneficiaries to improve quality and outcome of care, and influence behavior towards health benefits offerings in order to lower costs.


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