Independent / Provider-Sponsored Plans’ Administrative Expenses Decelerate in 2024

PHILADELPHIA--(BUSINESS WIRE)--Holding product mix constant, Independent / Provider-Sponsored plans’ per member costs grew by 6.2% in 2024 compared with 8.4% in 2023. The growth in Medicare Advantage and decline in Medicaid membership led to as reported growth of 9.5%, compared with 10.5% in 2023. Median PMPM costs for all reporting plans was $55.67 PMPM.

While most Sales and Marketing functions decelerated, the plans emphasized Customer Services, Actuarial and Rating and Underwriting. There was also notable growth in Information systems, and acceleration in Medical Management. Staffing ratios, compensation and outsourcing increased.

The results are summarized in Plan Management Navigator, posted at sherlockco.com/navigator. The Navigator draws from the 2025 Independent / Provider-Sponsored plan edition of the Sherlock Benchmarks. It analyzes and details results from in-depth surveys of 12 IPS Plans serving 8.7 million members, a high share of such health plans and especially of the members served by this industry segment.

We will discuss the results via a free web conference on Wednesday, July 16^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 Sherlock Benchmarks are the health plan industry’s “gold standard” metrics of administrative activities, costs and operational drivers. They reflect 28 consecutive years and more than 1,000 health plan years of experience. Health plans use the Sherlock Benchmarks to determine whether their administrative costs are optimal and to prioritize improvements among numerous specific activities. Other applications include informing strategic corporate planning and cost-benefit analyses.

This year, collectively, Benchmark participants serve 58 million Americans in Blue and other universes. Other universes include Blue Cross Blue Shield plans, Medicare plans and Medicaid plans. Health plan users of the Sherlock Benchmarks serve over 170 million members since June 2022.

Sherlock Company (www.sherlockco.com), based in Gwynedd Valley, 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.