Third Party Administrators are a key driving force for just about every small, medium, and large business here in Texas. Organizing costs, analyzing data, and determining the best path forward is the primary role for Third Party Administrators.
As health insurance brokers, we are highly attuned to the ebb and flow of health insurance and how that affects your day-to-day business. Whether you are a TPA or have one managing your businesses’ health insurance plans, we have created a round-up of some of the biggest trends in healthcare management facing these administrators.
TPA’s can use technology to their advantage. While these changes may seem overwhelming, they can spearhead your business forward in a greater way. Continue reading to see what these trends are and how they can affect your business.
Here are 5 Trends in Health Insurance Every TPA Should Know About
Trend #1. Prescription Drug Costs are Expected to Drop
That’s right, prescription drug costs are expected to drop slightly over the next 12 months. Why? Well, the major driving force for technology changes in healthcare is price inflation, not how these services are used or how frequently they are used.
Plan sponsors in the past have done an excellent job of managing utilization on shared plans to reduce costs, but the focus is now changing to inflation. Eliminating wasteful providers from networks is a major trend in lowering prescription drug costs. As plan sponsors do this, they reduce the costs of prescription drug costs because the pressure is on. Addressing inflation in this way can put pressure on TPAs to provide more data on healthcare costs. Don’t be surprised if higher-ups in your business expect a more analyzed look at how prescription drug costs are weighing down company health insurance policies.
Network negotiated reimbursement rates that are paid to providers are another factor to look at. Those rates also are different from inflation. As these rates change this could also change the cost of prescription drugs. When the pressure is on, changes happen.
This article from Business Wire discusses this subject more in-depth. All TPA’s should be focused on staying up to date with these trends to ensure that their company is benefiting the most from their health insurance plans.
Trend #2. Self-Funded Plans are On The Rise
Third party administration is all about reducing costs for employers. For healthcare, employees are more focused on affordable options, which means so are company executives. Of course, the goal is to save both employees and companies on costs. One option that has developed over the past couple of years is self-funded plans.
Self-funded is becoming one of the most popular healthcare trends thanks to the rising cost of health insurance. Ranging from comprehensive medical to preventative only medical coverage, self-funded plans vary greatly. One of the reasons this is important is that attracting talent often revolves around health care benefits. A tighter labor market makes this even more important.
So, what are some important facets Third Party Administrators should consider when looking at self-funded healthcare plans?
First, keep in mind that the benefits of self-funded plans start with flexibility. Don’t be afraid to negotiate to create a customized plan that benefits all parties involved. Referenced-based pricing, plan designs, and more can also be handled by Primary Care Insurance Solutions.
Second, self-funded plans are so attractive because they save employers on healthcare costs. Employers can actually see refunds from their investment in employee health care with self-funded plans. Claim dollars are also not subjected to state health insurance premium taxes. This also reduces costs to employers.
Thirdly, perhaps the most important benefit of self-funded plans for third-party administrators is the fact that these plans give you a great deal of health claims data and demographic data. This information can then be used to better manage health care costs. Looking for generic medications, in-network providers, and even improve the level of healthcare your employee’s experience.
Third Party Administrators should recognize the advantages of using self-funded plans and how to maximize these options for their business. However, weighing the options is another important job for TPAs.
As a result of self-funded plan popularity, TPA growth is also expected. Employers need TPA’s to manage fully customized health plans.
Trend #3. TPA Consolidation is Accelerating
TPA consolidation is equally important. TPAs are responsible for handling healthcare plans and claims data. Consolidating the companies that provide Third Party Administration has changed the way these experts manage their duties.
If you’re a TPA professional you could notice this change affecting your own personal career. However, as the demand for this position increases the demand for qualified, trained, and committed TPAs. Third Party Administrators offer a solid and predictable source of revenue that is enhanced via technology and outsourcing.
Trend #4. Artificial Intelligence is Leading the Way Forward
Another major trend in healthcare management is artificial intelligence. The greatest advantage for companies to use artificial intelligence is cost reduction through data. Lowering costs and accelerating decision-making processes are key features of AI.
While within the healthcare sector the biggest changes AI has implemented are through medical care management. Early detection systems are being supported by algorithms and automated recognition patterns for patient data are all very important and helpful, and AI is here to make that happen.
AI-based claims management also make TPA administration so much easier. With very little effort on the part of TPAs, information can be analyzed and provided in a way that it intervenes with any disorganization around claims data. Automating administrative staff can be another big benefit. Extracting data with no extra steps makes this process so much easier.
Tracking claims management information and data is the most important part of using AI technology. If you haven’t already investigated how AI can change your TPA administration, then now is the right time. Structured, digital documents and data is the result of this advanced technology. There are more insights into artificial intelligence regarding health insurance out there, but this overview provides some important information administrators can rely on.
Trend #5. Telemedicine Is on the Rise
In addition to AI, telemedicine is another rising trend in healthcare management. Experts estimate that by 2021, the Telemedicine industry is going to rise to over $40 billion globally. Telemedicine has made serious shifts in how both patients and doctors are connecting. This also has had a serious effect on how TPAs manage their business.
But how will telemedicine affect TPAs?
Well, it goes back to the rise in Self-Funded plans. TPA’s are looking for better options for their self-funded clients. Managing the costs of health care is the most important factor. Telemedicine provides great cost reduction benefits and provides high quality health care services, it reduces the company’s healthcare costs, reduces maintenance medications, and increases employee utilization of plan options.
TPA’s should work with finance teams and billing teams to ensure that the reimbursement strategies are fully understood on all sides. Monitoring care as well as costs, are another advantage for telemedicine use via TPAs.
These are just a few of the trends in healthcare management currently emerging. But as new technology develops, third party administrators will need to navigate this information and data. For more information about these healthcare trends and other changes to the marketplace, consider contacting Primary Care Insurance Solutions in Houston, Texas.
Frequently Asked Questions
What role do Third Party Administrators (TPAs) play in businesses of all sizes?
TPAs are essential for businesses of all sizes, handling tasks like cost organization, data analysis, and determining optimal strategies. They ensure effective management of health insurance plans and related matters.
How do health insurance brokers contribute to the understanding of health insurance trends?
Health insurance brokers, like us, closely monitor health insurance trends and their impact on businesses. We provide insights into emerging trends, assisting businesses in adapting to changes and optimizing their plans.
What is the projected direction of prescription drug costs in the coming months?
Prescription drug costs are anticipated to slightly decrease over the next year due to the growing focus on managing price inflation rather than usage frequency. This shift urges Third Party Administrators (TPAs) to provide more comprehensive data on healthcare costs.
How are self-funded healthcare plans becoming a popular trend?
Self-funded plans are on the rise due to their flexibility and potential for cost savings. These plans cater to the need for affordable options in healthcare and attract talent by offering tailored coverage that suits both employees and employers
What advantages do Third Party Administrators gain from self-funded plans?
Third Party Administrators (TPAs) benefit from self-funded plans through flexibility, cost savings, and access to comprehensive health claims and demographic data. These plans empower TPAs to manage health care costs effectively and provide tailored solutions.
What is the significance of Third Party Administrator (TPA) consolidation?
TPA consolidation is accelerating, reshaping how healthcare plans and claims data are managed. This trend increases the demand for qualified TPAs, as these experts become crucial in navigating complex healthcare administration.
How is Artificial Intelligence (AI) influencing healthcare management?
Artificial Intelligence (AI) is revolutionizing healthcare management by reducing costs through data analysis and expediting decision-making processes. AI-powered systems improve claims management, enhance early detection systems, and automate administrative tasks for TPAs.
What is the impact of telemedicine on healthcare management and TPAs?
Telemedicine is a rising trend that transforms healthcare management and affects TPAs. It offers cost reduction benefits, high-quality care, and increased utilization of plan options. TPAs must collaborate with finance and billing teams to ensure proper reimbursement strategies and monitor care and costs effectively.
How can Third Party Administrators (TPAs) stay informed about emerging healthcare trends?
Staying informed about healthcare trends is crucial for TPAs. By collaborating with reliable sources like Primary Care Insurance Solutions in Houston, Texas, TPAs can access valuable insights and adapt to industry changes effectively.