With 2024 behind us and year-end calculations being shared, many payers found the numbers are not in their favor. In particular, seven major players in the health insurance industry saw their profits decline an average of 3.3% during Q3 of last year.
Several factors have contributed to these higher medical loss ratios, including increased pharmaceutical spending (specifically for specialty drugs), the continually rising cost of medical care, and higher utilization rates – which have steadily increased in the post-pandemic era. Coupled with the ever-shifting economic landscape and more frequent cyberattacks, this has made it more trying for health insurers to maintain their bottom line.
Price Transparency as a Provider Network Solution
Price transparency has proven particularly critical in these situations. This is especially the case for government-sponsored plans such as Medicare Advantage and Medicaid, explained Nick Felici, TOG’s Director of Network Development & Analytics. He added, “[This is because] states set revenue rates that often don’t fully cover medical expenditures for higher acuity patients. Price transparency can help identify gaps and optimize reimbursement strategies.”
In addition, approaches focused on price transparency can help payers realistically predict costs and align their premiums accordingly. These strategies can even assist in reducing administrative fees by simplifying claims processing. When paired with a thorough analysis of competing payers and a comprehensive marketing approach, price transparency can help boost long-term profitability.
The Union of Network Intelligence and Price Transparency
In these scenarios, price transparency and network intelligence go hand-in-hand. Payers can use price transparency to glean valuable insights into general market costs. Insurers can then utilize this data to inform their next steps and more efficiently navigate health care contract negotiation. Improved reimbursement strategies often lead to network steerage.
Felici notes, “[Network steerage] helps shift care to lower-cost service sites, better aligning with care delivery.”
This allows payers to more successfully navigate the complexities of reimbursement with greater bargaining power and more operational efficiency.
In summary, network intelligence and price transparency can jointly raise profits for insurers by:
- Assisting with fraud detection by offering a deeper understanding of network patterns and relationships
- Developing new products and services to address member needs
- Enhancing bargaining power during health care contract negotiations
- Attracting new members and building trust with existing members by improving their reputation
Contact TOG today for industry-leading health insurance industry network intelligence services to boost your provider network profits.