Blue Cross Blue Shield Plans’ Administrative Cost Growth Decelerated in 2020

PHILADELPHIA--(BUSINESS WIRE)--In 2020, Blue Cross Blue Shield Plans’ costs increased by 5.2% per member, down from 6.6% and 6.7% in 2019 and 2018, respectively. These comparisons are between continuously reporting plans and eliminate the effect of product mix differences between comparison years.

The results are published in Plan Management Navigator and are posted at sherlockco.com/navigator. Navigator excerpts from the 2021 Blue Cross Blue Shield Plan edition of the Sherlock Benchmarks. This edition of the Sherlock Benchmarks analyzes and reports on the in-depth surveys of 14 Blue Plans serving 41 million members. Surveyed Plans comprise 61% of the members of Blue Cross Blue Shield Plans not served by publicly-traded companies.

The decline in growth was significant in Account and Membership Administration and Sales and Marketing. The Corporate Services Cluster was the only one to accelerate in growth.

Commercial membership declined in 2020, especially for insured products. Membership in ASO/ASC, FEP, Medicaid and Medicare Advantage increased.

Staffing ratios increased, largely due to Customer Services, as compensation increased by 3%. Outsourcing was relatively stable at 11-12% overall.

Within the functions, cost trends were consistent with adaptation to COVID-19, such as in Nurse Information and Customer Services, and strengthening Plans’ longer term competitive position through higher Actuarial and Pre-Planning in Information Systems.

We will discuss the results via free web conference on Thursday, June 24^th, from 2:00 PM to 3:00 PM Eastern Daylight Time. Douglas Sherlock will offer a brief presentation, followed by questions and answers. To participate in the web conference, please register at sherlockco.com/webinar. Once registered, dial-in information and a link to connect will be provided in a confirmation email.

The recent operating environment has been challenging for health plans. The Sherlock Benchmarks can assist in adapting to this environment and optimizing expenses.

The Sherlock Benchmarks for 2021 will reflect approximately 928 health plan years of experience spanning 24 consecutive years. They are the gold standard” of benchmarks used to measure and manage health plan administrative activities in health plans serving approximately 172 million members. Planning, budgeting and cost benefit analyses are credibly informed by the Sherlock Benchmarks.

Besides the Blue Cross Blue Shield universe, other universes include Independent/Provider-Sponsored plans, Medicare plans and Medicaid plans. Collectively, the 36 participating plans serve 54 million insured Americans.

Sherlock Company (www.sherlockco.com), based in North Wales, Pennsylvania, provides informed solutions for health plan financial management. Since its founding in 1987, Sherlock Company has been known for its impartiality and technical competence in service to its clients.