Without access to claims data in traditional third-party payer programs, employers lack information needed to make key plan improvement and cost-cutting decisions.
 

July 27, 2010--Bethesda, MD -- A new report from the Healthcare Performance Management Institute (www.HPMInstintute.org) provides a detailed overview of how employers that choose to self-insure their healthcare plans for employees are maximizing their savings while improving outcomes. 
 

In the report “Measure, Manage, Engage and Save: An Overview of How Healthcare Performance Management Works,” leading experts in the field of employer-managed insurance plans explain how a growing number of employers are moving away from the prevailing model of purchasing insurance through third-party payer systems. The reason: plan purchasers are typically in the dark about key cost components. This approach offers little insight on how the health of their workforce affects skyrocketing healthcare cost. And they have little visibility or control over what can and should be done to address the healthcare needs of their employees.
 
At the center of this problem is not a fundamental lack of claims data but a lack of will to provide data to stakeholders who can benefit most from the information derived. For myriad reasons, insurance providers (carriers) — who receive comprehensive contracts to cover a workforce pool in a healthcare plan — severely limit how much — if any — information is shared with employers who pay their premiums, often citing privacy laws and other risk management concerns. Thus, while paying third-party insurers to assume total responsibility for managing health claims — and risk — may seem convenient, it comes at a price: Employers sacrifice access to vital, aggregated information about employee health. 
 

In response, a growing number of corporate buyers of healthcare coverage for their employees are choosing to self-insure, while embracing a new business discipline known as Healthcare Performance Management (HPM). One of the hallmarks of HPM is a data "dashboard" that presents a comprehensive array of information about key trends in the health of the workforce and potential risks. Information like this helps employers answer critical questions, such as:

• What are my company’s health plan medical expense trends?
• What areas show the highest potential for costly, future medical risks?

To better understand how HPM works, the editors of BizTechReports.Com interviewed experts at the Healthcare Performance Management Institute. The institute focuses on the use of business technology and management principles that deliver better and more cost-effective healthcare benefits.

Toward that end, this paper explores the four pillars of HPM, which call on executives to effectively:

• Measure the key cost elements of healthcare spending
• Manage key aspects of healthcare spending and important health outcomes
• Engage employees and family members in material health improvement initiatives
• Save money through cost-avoidance, better workforce health and improved productivity

Click here to view the white paper.