You don't need to become an expert in insurance analytics to have a useful conversation about utilization data. You just need a broker who's willing to have it with you, who knows your plan well enough to put the numbers in context, and who treats this kind of mid-year review as part of the job.
There's a report sitting in your broker's inbox right now that most executives never ask for. It contains several months of data on how your employees are actually using their benefits, which services they're accessing, which ones they're avoiding, where the claims are coming from, and how the trends are developing. It exists for larger groups (usually 100+ enrolled) or on Self-Funded/Level-Funded plans. And, in most cases, it goes unreviewed from one renewal to the next.
This blog explains what's in that report and why it matters, because the founders who understand it make better decisions about their benefits programs than the ones who don't. Not because they're more sophisticated, but because they're working with information rather than assumptions.
At its most straightforward, utilization data shows you how your employees are engaging with the plan you're paying for. Who's using it, for what, and at what frequency. Which benefits are being accessed regularly, and which ones are sitting unused. Where the claims are concentrated and whether those patterns are consistent with what you'd expect from a healthy, engaged workforce.
The interesting insights, though, are often in what the data doesn't show. When preventive care utilization is low, that's almost always a signal worth investigating. It could mean employees don't know what's covered at no cost to them. It could mean the out-of-pocket costs elsewhere in the plan are creating a general anxiety about using insurance at all. It could mean something more straightforward, like employees don't know how to find an in-network provider or aren't sure how to use the plan correctly. Whatever the reason, low preventive care utilization tends to produce higher claims costs over time, because the conditions that routine visits catch early don't get caught until they're more expensive to treat.
Similarly, a high volume of emergency room visits for conditions that urgent care handles at a fraction of the cost is a plan design and communication issue. Employees who understand their coverage use the right level of care for the right situations. Employees who are uncertain or confused default to the most expensive option because it feels like the safest one. That pattern has a direct impact on your claims experience, and your claims experience has a direct impact on your renewal number.
The claims experience your plan generates this year is one of the most significant inputs into what your carrier quotes you next year. A plan with healthy utilization patterns, where employees are accessing preventive care, using appropriate levels of care, and engaging with their benefits in the ways the plan was designed for, tells a better story to a carrier than a plan where utilization is low, ER usage is high, and the data suggests employees either don't understand or can't afford to use what they have.
Leaders who review this data mid-year have time to respond to what they find. If preventive care utilization is lower than it should be, there's time to communicate more clearly with employees about what's covered and how to access it. If a particular benefit is going largely unused because employees don't understand how it works, there's time to address that before it affects the renewal conversation. The same data discovered at renewal, when the carrier has already built its numbers around it, is information you can observe but no longer act on.
That gap between having time to respond and being too late to respond is worth understanding, because it's larger than most leaders realize. The renewal conversation that feels like it starts in October actually started in the claims data from the spring.
The starting point is simply asking your broker for a utilization report and requesting a meeting to walk through what it shows. That conversation, if your broker is doing the job correctly, should cover where your utilization stands relative to what's typical for a group your size, whether there are patterns worth addressing, and what the data suggests about your renewal outlook.
The questions worth bringing to that conversation are fairly straightforward. Are employees using preventive care at reasonable rates? Is emergency room utilization higher than you'd expect? Are there benefits with very low engagement, and if so, does your broker have a view on why? Are there any trends in the data that look like they might affect your claims costs over the next six months?
You don't need to become an expert in insurance analytics to have a useful conversation about these things. You just need a broker who's willing to have it with you, who knows your plan well enough to put the numbers in context, and who treats this kind of mid-year review as part of the job rather than something that only happens when you ask for it.
The goal isn't to manage your benefits program like an actuary. The goal is to understand it well enough to make better decisions about it. And that starts with looking at what the data is already trying to tell you.
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Brian Allen | President, evco | Managing benefits for 36,000+ lives since 2005
The benefits calendar, done well, is really just a commitment to having smaller conversations throughout the year rather than one enormous conversation when the pressure is highest, and the options are fewest. Let's discuss.
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