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How To Use Data Analytics To Save On Healthcare Costs

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Advisors

How To Use Data Analytics To Save On Healthcare Costs

As healthcare costs continue to increase, businesses and employees are asking, “What cuts will we have to make to keep our healthcare?”

When it comes to healthcare, no one should be trying to determine where to make cuts — they should be trying to find a better, less expensive way to access quality care. But how?

The answer is understanding usage and costs, and the only way to do this is by accessing employee healthcare data to help renewal negotiations or determine if a self-funded plan is right for a business and its employees. 

This valuable data can only be accessed by asking employees to share their insurance financial reports. The process is generally as simple as having employees log onto a portal and grant access. This isn’t as big of an ask as it seems because by granting access to their data, employees get better benefits at a lower cost. Plus, the data never is seen by their employers and is HIPAA protected so it’s completely anonymous. Once you have the data, it’s time to put it to work. 

Using analytics, business owners can use data to create actionable healthcare plans by determining the true cost of their current healthcare plans, better understand healthcare trends, predict organizational costs, recognize opportunities, and mitigate risk.

For example, prescription drugs make up almost 17% of personal healthcare costs. However, when you analyze the data, you can break down prescription costs into line items and see how often specific drugs are prescribed and how much they cost. When you have the true costs, you can negotiate group rates and discounts on behalf of your clients.

If we apply this example to all healthcare costs, it’s easy to see how utilizing data allows for smart, proactive decisions about employee health coverage.

Making the move to self-funding saves companies 12 to 18% in the first year. However, if it’s not time for self-funding, the right information and analytics can help eliminate excess and offer businesses the power to negotiate better renewal rates, improve care, and decrease costs for your clients and US employers.