Cost of Healthcare Improvements Rising

According to a new report by Mark Farrah Associates (MFA), insurers spent over $5 billion on improvements to healthcare quality in 2011, a more than $100 million increase over 2010. The report, “Health Plans’ Quality Improvements Expenditures Rising,” found that insurers spent a hefty sum simply preventing the injury and illness of its policy holders. These expenditures are expected to continue rising as the workforce continues to age and insurers refocus their efforts on controlling health care costs and deducting improvement-related costs from new healthcare reform rebate mandates.

Quality improvement costs for health insurance include expenses aimed at raising the likelihood of reaching desired health outcomes. Activities may include preventing readmission to hospitals, reducing medical errors, promoting wellness activities, and improving patient safety. MFA promotes using the Supplemental Health Care Exhibit portion of the National Association of Insurance Commissioners’ statutory filings as a benchmark to expenditures on healthcare plan improvements. Using this data also allows insurers to benchmark their efforts to those of other health plans.

The report is available in full in the Analysis Briefs section of the Mark Farrah Associates’ website.