Industry: Mid-sized employer
Employees: ~120
Members: ~230
Claims Period Analyzed: December 2023 – November 2025
The Challenge
Like many employers, this organization viewed healthcare costs as largely uncontrollable. Annual increases were expected, conversations were reactive, and leadership questioned whether meaningful change was even possible.
The goal wasn’t to eliminate healthcare spending; it was to gain control, predictability, and clarity around what was driving costs and what could realistically be influenced.
The Strategy
Instead of defaulting to broad cost-cutting or benefit reductions, the focus shifted to intentional claims management, including:
- Analyzing medical claims by diagnostic category to identify true cost drivers (unit and frequency/severity)
- Evaluating year-over-year trends, not isolated claims events
- Managing pharmacy utilization with a focus on appropriate, targeted use
- Aligning medical, pharmacy, and funding decisions with actual risk
- Creating an opportunity to hold healthcare partners accountable with aligned contract designs
The objective was simple: make healthcare costs understood and manageable, not mysterious or reactive.
What did we uncover?
Total medical spend during the period was $1.245M, with costs concentrated in common high-impact categories. Several areas showed significant improvement year over year:
- Musculoskeletal claims: ↓ 34% (over $50,000 reduction)
- Nervous system claims: ↓ 86%
- Pharmacy claims declined 11.2%
- Injury-related claims: ↓ 32%
Increases in areas such as oncology and digestive conditions were evaluated in a clinical context and reflected necessary, high-value care, not inefficiency or misuse.
Pharmacy Claims Insights
Pharmacy costs—often the fastest-growing and least understood component of healthcare spend—remained controlled and targeted:
- Pharmacy claims declined 11.2% from July 2023 to July 2024
- Subsequent increases were driven by member-specific specialty therapies, not broad overutilization
- High-cost medications (antivirals, anticoagulants, migraine therapies, substance use disorder treatments) were present but limited in scope
- No material GLP-1 cost impact during the period
- Strong generic utilization across cardiovascular, antiviral, and behavioral health categories
This contrasted sharply with national pharmacy trends of 10–14% annual growth.
Total Plan Cost Performance (vs. Market)
Despite enrollment growth and utilization variability:
- Total plan cost increase: 2.6% (market norm: 7–10%)
- Net employer plan cost (most recent YTD): ↓ 22%
- Administrative and reinsurance costs remained controlled
Overall cost growth became predictable and strategic, rather than reactive.
The Outcome
The biggest result wasn’t just financial; it was a shift in mindset.
Leadership moved from asking “Why are costs going up?” to “Where do we have leverage, and what should we manage next?” Healthcare costs aren’t uncontrollable—but they become unmanageable when employers disengage.
When employers challenge assumptions, engage with data, and manage claims intentionally, meaningful change is possible.
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