What do our claims actually tell us? Should we be getting claims data?

Claims data provides a valuable look at how your health plan is performing beyond the premiums you're paying.

It can help explain where healthcare dollars are going, how employees and their covered dependents are using the plan, and which expenses are contributing most to overall costs.

But claims information is most useful when it's interpreted in context, rather than viewed as a collection of numbers.

What can claims data reveal?

Depending on the reporting available, claims analysis may help identify:

• Major cost drivers: Whether spending is concentrated in hospital care, outpatient services, physician visits, prescription drugs, or other categories.
• Prescription drug trends: How specialty medications, utilization patterns, and pharmacy costs are affecting overall spending.
• Healthcare utilization: Whether emergency room visits, hospital admissions, or other services are increasing or decreasing.
• Preventive care: Whether covered members are using recommended screenings and preventive services.
• High-cost claims: Whether a relatively small number of significant claims is influencing overall plan expenses.
• Changes over time: Whether spending patterns are recurring, emerging, or potentially related to unusual events.

These findings help identify areas that deserve closer attention. They don't automatically establish the cause of a trend or determine which strategy will work best.

Not every employer receives the same information.

The availability and detail of claims reporting depend on your health plan's funding arrangement, carrier or administrator, group size, and contractual provisions.

Self-funded plans generally offer greater access to claims reporting because the employer assumes the financial responsibility for covered claims, subject to any stop-loss protection.

Level-funded plans may provide claims experience and utilization reporting, although the level of detail varies considerably among carriers and administrators.

Fully insured plans typically offer more limited reporting, but some carriers provide aggregate claims summaries, utilization information, or other reports that can still support meaningful analysis.

Even when detailed claims data isn't available, employers can evaluate premiums, enrollment, plan design, contribution structures, and available market information to make informed decisions.

Claims trends aren't always what they appear to be.

A significant increase in claims doesn't necessarily indicate that your health plan is performing poorly.

For example, one unusually expensive medical event can materially affect a smaller employer's claims experience. An increase in preventive services might raise certain short-term expenses while reflecting better engagement with healthcare.

Similarly, lower claims spending isn't automatically a positive outcome if employees are postponing necessary care because they cannot afford it.

Understanding these distinctions helps prevent decisions based on incomplete information or misleading trends.

How do we turn claims information into better decisions?

At MPOWR, we use available claims reporting to investigate the factors influencing plan costs and evaluate potential strategies.

That might include reviewing pharmacy arrangements, assessing provider networks, examining plan design, or identifying opportunities for appropriate care management.

We also consider the reliability of the information, the size of the covered population, and whether a particular trend is likely to continue.

Claims analysis should focus on appropriate, aggregated information and plan-level decisions, not on making employment or benefits decisions based on an individual's medical history.

Ultimately, claims data is a tool for asking better questions and making more informed decisions.

It helps us distinguish between expenses that may be manageable, risks that need to be understood, and changes that could improve the long-term performance of your benefits program.