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by slashtom
1568 days ago
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Curious on your medical and pharmacy trend combined, how does it compare to other insurance carriers like Aetna, United, Kaiser Permanente, etc. There is only so much you could do on the administration/retention side of the cost puzzle, I believe for KP it's around 3-4% of the total PMPM, a lot of the cost savings will come from 1) not participating in the government programs (medicaid, medicare, aca), which the commercial market largely subsidizes
2) controlling the provider costs, how much control/influence do you really have with a small membership base to negotiate from? Interesting concept, I think the legacy carriers are working to improve their tech stack and providing this on-demand type of care. I wish you a lot of luck! |
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Medical + Rx trend: Our trends are a little lower than the published trend figures because of the shifts we are creating through embedded telehealth and telemedicine solutions. For competitive reasons, we cannot disclose exactly how much lower but it is substantial.
Admin cost savings: A regional Blue Cross Blue Shield plan typically spends 12-15% of their revenue on general and administrative expenses (G&A). That number does not include Sales expenses – it is pure G&A. We are confident in hitting 4% or 5% thanks to all the technology we’ve built and automated, and we pass through the savings to our customers.
Controlling provider costs: It’s not all about controlling costs. You’re certainly correct that our rates across the board would be better if we had a large membership base to illustrate how our programs help physicians be successful and encourage broader collaboration on the care coordination efforts that drive better outcomes and higher quality. Sometimes we end up paying more for a procedure. That’s okay and working as intended! Good doctors should get paid more; bad care should be worth less. But even if we pay more for certain care, if outcomes are aligned and the patient is healthier, it will generate a financial return for us across a population. We offer up to 3-year rate lock-in agreements for employers so we can still capture the savings of, for example, reduced readmission even if it doesn’t occur immediately.
Legacy insurer efforts: Legacy insurers are attempting to address the situation, but their patchwork efforts cannot address the fundamental chassis that they are tied to. That legacy infrastructure and broader employment base is not easily transitioned to modern technology, value-based care, and virtual business models. Also, the innovation-based pilots they roll out may impact one market, like a specific city, or a specific market segment, like Medicare membership, and one service, like pain management for arthritis, but they are not necessarily rolling out solutions that impact their whole population. At the end of the day, the current system is not sustainable.