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 ey
functional categories for applicable administrative
operational metrics
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The following are key health plan administrative functional
categories typically used in development of analytics of
health plan administrative operations:
- Sales and Marketing
- Account and Membership
Administration
- Customer Services
- Provider Network
Management and Services
- Claim and Encounter
Capture and Adjudication
- Information Systems
- Corporate Services
Benchmarks for applicable
metrics in each function are typically analyzed by various
population categories, such as product line (Group,
Individual, Medicare, Medicaid, etc); and by sub-functional
areas.
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 alculation
and relationships for applicable operational metrics
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The following is a summary of
how primary demand, productivity, unit costs, staffing
ratios and costs per employee are calculated and
inter-relate for desired administrative operational metrics
in any applicable functional category (using sample data for
illustrative purposes.)
Transactions per
Member |
x
|
Members per FTE |
=
|
Transactions per FTE
per Year |
x
|
Cost per Transaction |
=
|
Cost per FTE |
x
|
FTEs per 10,000
Members |
=
|
Cost PMPM |
|
1.1 |
x |
9,000 |
= |
9,900 |
x |
$7.50 |
= |
$74,250 |
x |
1.11 |
= |
$0.69 |
|
Primary Demand |
|
Staffing Ratio |
|
Productivity |
|
Unit Cost |
|
Per FTE Cost |
|
Staffing Ratio |
|
Cost PMPM |
|
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 ales
and Marketing
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Functions often incorporated under this category include:
Rating and Underwriting; Product Development/Market
Research; Sales and Marketing; Commissions; and Advertising
and Promotion.
Below are various selected
benchmark metrics for Sales and Marketing:
- Number of broker members
sold/broker
- Number of final
quotes/broker
- Number of renewal
quotes/broker
- Number of new business quotes/broker
- Percentage of final
quotes by brokers that were renewal quotes
- Percentage of total
final quotes by brokers
- Percentage of total
renewal quotes by brokers
- Percentage of total new
business quotes by brokers
- Total broker commissions
as a percent of premium equivalents for broker members
- Total broker commissions
per broker member per month, excluding overrides
- Total broker
commissions, excluding overrides as a percent of premium
equivalents.
- Broker overrides and
bonuses per broker member per month
- Broker overrides and
bonuses as a percent of revenue
- Commission costs per
broker member per month
- Commission costs/broker
- Members sold/broker
- Average group
size/broker
- Total success rate per
broker (measured by the total groups sold as a percent
of final quotes)
- Group persistency rate:
the proportion of groups that remained with plans from
the prior year
- Total renewal quotes
(internal and broker) declines as a percent of total
quotes
- Total new group business
quotes (internal and broker) as a percent of total
quotes
- Percentage of individual
members sold internally
- The average size of all
groups (and by large/small) sold internally; and
externally
- The number of members
sold per total sales FTE
- Final quotes per total
sales and marketing FTE
- The number of members
sold per internal sales FTE
- Sales and Marketing
costs (excluding commissions) per sales FTE
- Sales and Marketing
costs PMPM (excluding commissions)
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 ccount
and Membership Administration
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Functions often incorporated under this category include
Enrollment; Membership Processing; and Billing. Billing
focuses on the processing, recording and maintenance of the
relationship of the members for the Enrollment portion.
Membership is the recording of any changes in demographic
information and Billing is the process of calculating,
documenting and the submitting of invoices. Member
transactions include additions,
changes and deletions for members of existing groups.
Below are various selected benchmark metrics for Account and
Membership Administration:
- Number of Transactions
per group
- Percentage of total
transactions that were group; and member
- Number of member
transactions per member
- Number of non-online
electronic member transactions per member
- Non-online electronic
member transactions per member
- Average Group processing
days for renewals; and for new groups (date of receipt
of renewal/sale to when the group was enrolled)
- Percentage of group
transactions that were processed within 15 calendar
days; (and within 30; and over 30 days)
- The average age of
membership
- Percentage of local
membership compared to national membership (“National”
is defined as groups with more than 5,000 employees and
more than 10% of membership out of the plan’s service
area
- Average member
processing days (the number of days to enroll a member
from the receipt of the application to the date of
eligibility)
- Percentage of member
transactions processed within 15 days
- Number of member
applications per member
- Percentage of member
applications returned (incomplete)
- Member enrollment
accuracy rate (percent of accurate member-level
transactions)
- Group enrollment
accuracy rate (percent of accurate group-level
transactions)
- Percent of members
satisfied with the Enrollment function
- Percent of cards
received within 30 days of receiving paperwork
- Cards issued per member
per year
- Number of total bills
issued per member per year
- Percent of group bills
going out on time
- Enrollment costs per FTE
- Enrollment transactions
per member
- Enrollment non-staffing
costs per FTE
- Enrollment costs per
member per month (PMPM)
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 ustomer
Services
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The functional area of Customer Services responds to,
processes, resolves and provides information for
transactions or inquiries of customers.
- Automated electronic
inquiries per member (inquiries via web handled by an
automated system)
- Manual inquiries per
member per year; and Total inquiries
- Percentage of paper /
written inquiries; and total Manual inquiries (including
manual electronic- which are
inquiries via the web or e-mail that are responded to by
a human)
- Total costs per Customer
Services inquiry
- Number of total
inquiries per member
- Percentage of total
inquiries received and answered by a rep
- Inquiry accuracy rate
(percent of inquiries that were closed accurately)
- Average speed of call
answer (ASA)
- ASA level at 30 seconds
(percent of calls answered within 30 seconds)
- Call abandonment rate
(percent of calls that are terminated by the callers
before the rep answers)
- Percentage of calls
received with busy signals
- Percentage of calls
transferred from the original rep
- Percentage of calls that
were put on hold
- Average length of time
required for each call
- Percentage of calls
blocked
- Number of days required
to resolve inquiries
- Percentage of inquiries
that resolved within 7 days
- Cycle time to close
appeals, grievances and complaints
- Email response time to
inquiries
- Percentage of appeals
overturned (completely or partially)
- Appeals per member
- Employee productivity:
Manual inquiries per FTE per year
- Customer Services costs
per manual inquiry
- Total Customer Services
costs per FTE
- Non-Labor and Staffing
Costs per FTE
- Customer Services costs
PMPM
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 rovider
Network Management and Services
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Provider Network Management and Services functions include
handling of: provider inquiries; the recruiting and
credentialing of providers; contracting; and the auditing
and review of medical records and billing.
- Number of manual
provider inquiries per member
- Number of manual
provider calls per member
- Percentage of total
provider inquiries that were manual electronic inquiries
- Percentage of total
provider inquiries that were manual calls
- Average speed of answer
(ASA)
- Percentage of provider
calls answered within 30 seconds
- Percentage of provider
calls were terminated by the caller before the rep
answered
- Length of time required
for each provider call
- Total number of
providers per 1,000 members
- Number of primary care
physicians per 1,000 members
- Number of professional
specialists per 1,000 members
- Total number of facility
providers
- Length of time it to
enroll new providers.
- Length of time to
credential new providers
- Cycle time to on system
for new providers (number of days from the date of
credentialing to when a provider is on the system)
- Contracting costs PMPM
- Contracting costs per
Contracting FTE
- Number of members per
Contracting FTE
- Number of providers per
Contracting FTE
- Contracting cost per
provider
- Number of members per
Provider Relations FTE
- Provider Relations
Productivity, measured as manual inquiries per FTE
- Provider Relations costs
per manual inquiry
- Provider Relations costs
per FTE
- Provider Relations costs
per member per month (PMPM).
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laim
and Encounter Capture and Adjudication
|
The functional area of Claims and Encounter Capture and
Adjudication primarily focuses on the coordination
of benefits and treatment of claims submitted, including the
routing, resolution of disputes, the
payment of claims and other various activities.
- Claims receipts per
member
- Number of adjudicated
claims per member
- The autoadjudication
rate (the percent of total claims processed that did not
require manual intervention)
- Percentage of
adjudicated claims that required manual intervention
- Number of paper receipts
per member
- Percentage of total
receipts that are electronic; and paper
- Percentage of
adjudicated claims that are reworked
- Average days from claims
incurred to receipt
- Average days from claims
receipt to approved
- Average days from
approved to payment
- Percentage of claims
paid over 30 days old
- Percentage of claims
paid in less than 7 days
- Customer claims
satisfaction level
- COB and Subrogation
recoveries per dollar of COB cost
- Percentage of total
recoveries that are COB; subrogration; and other
- Coordination of Benefits
(COB) and Subrogation costs PMPM
- COB and Subrogation
costs per FTE
- Health care costs per
COB FTE
- Overall cost per claim
processed
- Claims processing
staffing costs per FTE; and non-staffing costs
- Claims processing costs
per member per month (PMPM)
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 nformation
Systems
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Functional area for Information Systems includes Operations
and Support Services; Applications and Maintenance;
Application Acquisition and Development; and IT Security
Administration and Enforcement. These areas together keep
infrastructure running for the plan, developing software and
supporting it, growing the business through new developments
and maintaining the security of the information systems.
- Cost per production job
- Number of production
jobs per member
- Number of production
jobs per FTE
- Capital expenditures per
member
- The average life of
platforms
- The overall book value
of total IS
- Overall book value of
hardware per member
- Overall book value of
software per member
- Number of users
supported for the voice network & telephony platform;
and annual cost per user supported
- Number of users
supported for the data network platform, and applicable
cost per user
- Number of helpdesk calls
per user
- Number of users per
helpdesk FTE
- Number of calls per
helpdesk FTE this year, and cost per call
- Helpdesk cost per FTE
- Helpdesk cost PMPM this
year
- Call ASA for desktop
helpdesk; first level problem resolution rate; and
average handle time
- Activities of
Information Systems, by Supported Function (Percentage
of applications that are for each of the functional
administrative categories)
- Non-staffing costs per
FTE
- Staffing costs per FTE
- The IS costs per total
FTE
- IS cost per IS FTE
- IS costs per total FTE
- Number of total FTEs per
IS FTE
- Total Information
Systems Costs, Accrual Basis, PMPM
- Internal personnel costs
PMPM
- Consultant contractor
costs PMPM
- Hardware depreciation
and maintenance costs PMPM
- Overall software
amortization costs PMPM
- Outsourced IS costs PMPM
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orporate
Services
|
The functional area of Corporate Services is primarily
composed of human resources, legal, facilities, other post
employment benefits, audit, purchasing, imaging, printing
and mailroom and other various areas.
- Facilities costs PMPM
- Amount of square feet of
usable space per FTE
- Facilities cost per
total usable square foot
- Facilities costs per FTE
- Facilities costs of
rent, depreciation and other Leasehold improvements
- Facilities costs per FTE
for depreciation, heat, light and taxes and security
- Average days in accounts
receivable
- Incoming mail volume per
member
- Out-going mail volume
per member
- Legal costs PMPM
- Legal costs per Legal
FTE
- Internal and external
Legal costs per Legal FTE
- Human Resources costs
PMPM
- HR non-staffing costs
per FTE
- HR staffing costs per
FTE
- Number of FTEs per HR
FTE
- Retention rate of
employees (Retention is the number of employees retained
through the year where the employees are able to switch
jobs, but remain with the company)
- Total separations per
1,000 FTEs
- Voluntary separations
per 1,000 FTEs (Voluntary separations are separations
initiated by the employee, excluding retirement, leaves,
layoffs and deaths)
- Involuntary separations
per 1,000 FTEs (Involuntary separations are separations
initiated by the employer)
- Number of hires per
1,000 FTEs
- External hires per 1,000
FTEs; and internal hires per 1,000 FTEs
- Number of days worked
per FTE this year; and number of days missed per FTE.
- Number of missed days
per FTE classified as Family and Medical Leave Act (FMLA)
days
- Number of missed days
per FTE classified as workers compensation days
- Percentage of the
workforce that was classified as: managerial;
clerical; sales; professional; technical; and service
- Number of training hours
per FTE
- Training costs per FTE
- Percentage of total
compensation for: health benefits; salaries; overtime;
Sales and commissions; bonus and incentive pay
- Total compensation costs
per FTE
- Salary compensation
costs per FTE
- Health benefits
compensation cost per FTE.
Bonus and incentive plans
compensation costs per FTE
- Pension compensation
costs per FTE
- 401 (k) compensation
costs per FTE
Internal staffing costs per internal
FTE
- Percentage of total FTEs
that were outsourced
- Corporate Services costs
PMPM
- Cost of Corporate
Services per FTE
- Number of total FTEs per
Corporate Service FTE
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|
ource
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The health plan administrative cost benchmark information
utilized in this edition of @How-To was compiled from recent
editions of the Sherlock Company's Plan Management
Navigator, a free e-newsletter published by the Sherlock
Company that discusses analytics for health plan
administration, and provides commentary and observations on
the management of health plan expenses under the direct
control of the management team. Sherlock Company provides
informed solutions for health plan financial management.
Sherlock Company assists health plans, their business
partners and their investors in the treasury, strategic and
control functions of finance. For more information on the
Sherlock Company, their Navigator e-newsletter, and their
products and services, go to:
www.sherlockco.com |
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