Manage Health Care Risk With Self-Funding
While most of the health plans ACS designs and manages are referred to as “self-funded”, they are really “partially” self-funded. This means that the employer assumes the amount of risk it can afford and then buys stop-loss insurance to cover those claims that exceed anticipated levels. Actuarial calculations are provided to determine the anticipated claims and appropriate levels of funding. Obtaining stop-loss insurance is really a risk management strategy because it helps the plan transfer the unpredictable risk to another entity – in this case the stop-loss insurance carrier.
In these partially self-funded arrangements, the plan sponsor is reimbursed for claims in excess of a predetermined amount. The plan sponsor or employer pays a premium for this coverage and is therefore able to budget for the expense.
Controlling Costs and Preventing Claims
Even though health plans will always incur claims that are unexpected, there is substantial evidence to show that many of the events that are reimbursable by a health care benefit plan are both controllable and preventable. ACS Benefit Services provides effective utilization management programs to help control costs. Data analysis can help health plans prevent future large claims by encouraging changes in behavior.
Utilization management can help control overall claim costs by reducing the number of unnecessary episodes of care and helping plan participants get the care they need in the most efficient, yet medically appropriate, setting. Helping plan participants use hospital emergency rooms for true emergencies is just one example. Any time we can change behavior by exposing plan participants to equally effective, but alternative treatment choices, costs can be controlled. Programs such as disease management, education and patient empowerment can result in plan design changes that will impact behavior.
Data analysis can also help prevent future costly claims. Programs such as health risk assessments can help a health plan obtain data that often indicates the risk of future illness. As an example, a height/weight ratio is considered to be a very good indicator of a person’s general state of health. As the level of obesity increases, a person’s health will typically decrease. Weight loss programs can be implemented to increase a population’s well-being and prevent future costly claims that may result from chronic diseases such as diabetes or hypertension. When chronic diseases that currently exist are treated properly and supplemented with education and appropriate monitoring, the claim costs associated with those diseases can be reduced.