Health Plan Risk Profile Analysis

Objective

A national health-focused non-profit operating a cost-sharing health model engaged Graeme Group to assess the adequacy of member contributions, quantify key actuarial risks, and identify cost drivers in medical and pharmacy utilization.

Scope of Services

• Validation of pharmacy and medical data for accuracy and completeness
• Analysis of historical claims and risk exposure
• Analysis of member contributions and the costs they fund
• Findings and recommendations

Services Provided

Our work covered data quality, medical and pharmacy costs, member contributions and financial sustainability.

Data Validation: We identified missing records, duplicates, incorrect values, payment delays and a large number of zero-paid claims. We categorized these issues, assessed their effect on the analysis, and cleaned and deduplicated the records.

Pharmacy Analysis: We examined utilization and cost concentration by member and medication, including high-cost drugs such as Ozempic. We also identified unusual claims and payment delays.

Medical Analysis: We examined claims trends, large claims and costs by service type, including a $120,000 claim and concentrations in surgery and maternity care. We calculated the 2024 medical loss ratio to assess contributions against claims and flagged unusual payment statuses.

Documentation: The actuarial report recorded the methods, data analysis and findings for management review.

Recommendations: We recommended changes to cost management, data controls and contribution pricing, supported by claims projections under different scenarios.

Outcome

The assessment produced:

• Corrections to medical and pharmacy data quality issues
• Measures of cost concentration, utilization and risk, explained for non-actuarial readers
• An assessment of member contributions and the financial sustainability of medical and pharmacy benefits
• A report documenting the analysis and recommendations