Administrative expenses of Independent/Provider-Sponsored (IPS) plans
were 8.7% of premium in 2011. Administrative expenses grew by 4.1% per
member and 3.1% after excluding the effects of a product mix change in
favor of Medicare Advantage. IPS plans reported median total
administrative expenses of $35.06 PMPM.
Product Development/Market Research and Information Systems costs grew
rapidly, while growth was modest in Claims, Customer Service and
Enrollment functions. Trends may be attributable to plans’ adaptation to
the new health care environment.
Results are from the 2012 Independent/Provider-Sponsored Plan edition of
the Sherlock Expense Evaluation Report (SEER), a benchmarking
study analyzing in-depth surveys of 18 IPS plans serving 6.7 million
members. This universe is focused on managed care, likely elite among
their peers and some are associated with ACOs.
A challenging economy and the new legal environment make streamlining
administrative costs a high priority for health plans. Weak employment
pressures prices, product design and membership. The Affordable Care Act
compounds these challenges: the declared purpose of the MLR rule is to
“create incentives … to become more efficient.”
Sherlock Company’s benchmarks support plans’ streamlining efforts.
Health plans serving 143 million Americans use 2011 editions of Sherlock
benchmarks. These include the vast majority of Blue Cross Blue Shield
plans and 70% of the health plan board members of America’s Health
Besides the IPS universe, other universes include Blue Cross Blue Shield
Plans, Medicare plans, Medicaid plans and TPAs. Collectively, the 61
organizations serve approximately 48 million insured Americans.
Additional information will be published early next week in Plan
Management Navigator, and will be posted at www.sherlockco.com.
The complete analysis is available in SEER.
We will also host a web conference on Wednesday, July 25 from 2:00 PM to
3:00 PM Eastern Daylight Time to discuss the summary results. Douglas
Sherlock will offer a brief presentation, followed by questions and
answers. To participate in the web conference, please register at: https://www2.gotomeeting.com/register/389481362
Once registered, dial-in information and a link to connect to the web
will be provided in a confirmation email.
Sherlock Company (www.sherlockco.com),
based in North Wales, Pennsylvania, provides informed solutions for
health plan financial management. Since its founding in 1987, Sherlock
Company has been known for its impartiality and technical competence in
service to its clients.
Sherlock CompanyDouglas B. Sherlock, CFA215email@example.com
Source: Sherlock Company