Estimating & Adjusting for The Impact of COVID-19 On Claims Spend
While no one can be quite sure of the overall impact of COVID-19 on health insurance rates, we can look at its effects on previous months’ claims spend to project a more accurate baseline for next year. This way, we can help clients plan appropriately for budgeting and coverage without the misrepresented data resulting from the pandemic’s effects on healthcare.
Accounting for Lower Claims Rates
Some healthcare costs certainly did climb during the coronavirus, but utilization and claims spend were lower than average. Due to new regulations introduced throughout April and May of 2020, healthcare organizations and providers were not as accessible, and social distancing made health services even harder to seek out.
So, we can look at these months to see the pandemic’s biggest impact so far and notice a large drop in claims spend that may offset the overall PEPM. Since claims spend usually accounts for most of the costs within a healthcare plan, the lower data could cause issues for clients who aren’t accounting for the dip in rates, meaning higher increases than expected at renewals.
Our Algorithm to Adjust for COVID’s Claims Impact
We have developed an algorithm, or routine, to estimate the impact of COVID-19 on 2020 claims to predict future costs and help clients better prepare for next year’s budget.
With expertise in data analytics solutions, Crumdale consultants use an innovative cleansing formula to remove the outlying information skewed by the virus’s impact. By first looking at an account’s yearly overview, we can identify a significant change during the pandemic’s first few months—with dramatic shifts in claims costs reflected heavily during April and May. So, we use our proven process to scrub the data from the months with flawed information. Then, we recalculate the PEPM with an accurate baseline to predict a client’s future rates while accounting for COVID’s impact.
This approach can help us give clients a more realistic reflection of their healthcare costs to budget for the coming year without being blindsided by high increases due to the differences in claims spend during the pandemic. While it’s not clear how to determine the impact of the virus on all the entire year as of yet, we can help clients control healthcare and claims costs with proven methods for cost containment in addition to our guidance and resources.
Plan Ahead & Control Claims Costs With Crumdale
At Crumdale Partners, we’re dedicated to helping clients and businesses get the best insurance rates and coverage with a customized approach to cost-savings. We’ll help plan for and identify areas to control costs with protection for instances such as natural disasters, high-cost claims, and pandemics. With years of expertise and innovative solutions, we control costs for clients with ongoing claims negotiation, active claims monitoring, independent pharmacy benefits management, alternative drug sourcing, and more.
If you’re dealing with a difficult account and need help predicting claims spend in the coming year or offsetting insurance risks during the pandemic, we can help. Contact us today to get started, and let us offer a portfolio assessment for one of your clients to demonstrate how we can help control costs and improve coverage.