Archived Insight | November 6, 2019

Reduce Healthcare Costs with Analytics

Our team can reduce your healthcare costs and keep your organization in good shape. We'll help you simplify and lower expenses with our holistic, comprehensive healthcare cost reduction insights.

How we’ll reduce your healthcare expenses

Our deep bench of health consultants uses a wide variety of strategies to help reduce your healthcare costs, including:

  • Wellness strategies and disease management: By encouraging your people to take better care of their own health and wellness through custom-crafted programs, you can help head off expenses before they incur.
  • Provider network analysis, options and contracting: We’ll work with you to create healthcare networks that are both cost effective and comprehensive for your specific population.
  • Claim audits and implementation reviews: Our team has been conducting on-site claims reviews since 1973, and we’ll put that experience to work for you in helping you streamline administrative costs and weed out expensive inefficiencies.
  • Prescription drug benefit custom solutions: With Rx drugs being one of the main drivers of rising healthcare costs, you can’t afford to not have a strategy for this all-important benefit. Our team will help you craft the right plan for you and your people.
  • Vendor bidding and renewal negotiations: We’ll leverage our expertise in healthcare analytics to help you make the best, most cost-effective choice when it comes to selecting vendors for your benefits program.

Questioning your healthcare costs?

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Healthcare cost reduction: a case study

Underlying and supporting all of the hard work we’ll perform for you is our cutting-edge data analytics, which allows us to find innovative solutions to your most pressing healthcare cost problems. Called SHAPE (Segal’s Health Analysis of Plan Experience), our proprietary data mining tool saved Connecticut’s state government millions in healthcare costs.

The issue

The State’s claims data showed that one regional pharmacy dispensed approximately $6 million annually in high-cost drugs from one manufacturer.

This one manufacturer accounted for almost 80% of the plan spend dispensed through this pharmacy. At another pharmacy, the one drug company’s products accounted for over 88% of the plan spend dispensed through this pharmacy.

These high utilization levels from one manufacturer raised the potential issue of “captive pharmacies,” which derive the vast majority of drug volume from one manufacturer or drug.

Our solution

As part of our ongoing services to the State, Segal used our proprietary SHAPE data mining analytical tool to drill down into the State’s plan experience and utilization patterns that suggested disproportionate spend.

We convinced the State’s Pharmacy Benefit Manager (PBM), CVS/Caremark, to conduct an audit of both pharmacies over a six-month period. Although the PBM audit did not reveal discrepant claims or fraudulent activity, it also did not address the issue of excessive spend by the captive pharmacies.

The State also asked Segal to investigate other pharmaceutical manufacturers. In our review of over 30 manufacturers, we found no abuses as significant as those from the one manufacturer in question.

The result

Because of the analysis in our SHAPE captive pharmacy report, the State implemented utilization management to limit the use of problematic drugs by the manufacturer.

CVS/Caremark is also removing the suspect regional pharmacy from its national network. These changes resulted in estimated savings to the State of almost $6 million annually.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.