The Claims Continuum

A new idea for calculating the real cost of claims.

If you were asked to calculate the total impact of an employee`s health care claim on your bottom line, where would you begin?

It is likely you would start by looking at the cost of funding the payment made to cover the claim. The premium paid or self-funding contribution your company made to ensure the claim is covered is easily calculated. You would also acknowledge the insurance company`s payment as an offset to the premiums paid, or, if self-funded, you would include the debit from your reserve account in your calculations.

These relatively straight forward, quantifiable factors provide a snap shot of the cost of a claim and are often as far as CFO's take their analysis. In many cases, barring administrative blunders, over billing, a denial of coverage, or some other provider service gaffe, calculating the cost of a claim simply means comparing the share of the coverage your company paid and the cost of delivering the benefit.

But, what if we widen our view a little and look at the cost of a claim after it is paid, while it is being incurred, and before the event causing the claim ever happens?

Subjective analysis, the kind of thinking that can drive you crazy because it eludes bullet-proof quantification, is required. For example, think about the impact of a claim long after the payment has been made to cover treatment. Is the employee any healthier? Were they well served by the health care provider or supplier? Do they feel gratitude for the contribution your company made to their health and/or recovery?

Look too at the experience the employee has while being treated or served. If they feel cared for, valued and are actually getting what they need, what is your return? And, what is the value to your organization when other employees are aware of how well or poorly their fellow employee is being cared for?

Even before it is made, what if you take into consideration the circumstances that led up to the claim? The nature of the claim can be an indication of deep-seated, long-term issues that not only drive claims but also can have a substantial impact on long-term productivity. Pre-claim assessment can help you understand more clearly how wellness, disease management, and lifestyle choices made by your employees show up as critical factors impacting your ability to maintain a healthy bottom line.

If you would like to explore this idea further, contact us today.

Also, you may consider downloading a copy of The ROI Dashboard Builder.

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