By Samantha Bradley

Health plan costs continue their upward march, a source of continuing financial pain for employers (and individuals) who find managing rising medical and drug costs a constant – and seemingly futile – effort.

And the pressure will continue in 2025. Oregon’s Division of Financial Regulation approved median premium increases for plans on the individual market of about 8% in 2025. There was more volatility in approvals for the state’s small business market, from a high of 16.3% to the smallest of 5.7%.

What’s behind the increases are higher medical costs as utilization rises and pressures intensify on behavioral care. But especially difficult to manage is the escalation of prescription drug spending. Nationally, it’s expected to have risen 10% to 12% in 2024 alone as America binges on GLP-1 drugs for weight loss and as million dollar gene therapies become more common.  

There’s no simple cure. A survey by the American Society of Employers (ASE), for example, found the top cost-saving strategies for 2025 are to increase employee education about health plan features and costs, and to implement or expand wellness programs (both cited by 25% of respondents). Both are known to drive good long-term results. Other solutions, though, like increasing the employee cost share (21%) can have negative health and cost consequences over the long term.

A smarter and more sustainable approach would better serve Oregon’s small and mid-sized employers – and their workers. The end result would be lower costs and healthier employees. 

It’s a solution that involves applying both data analytics and clinical informatics to their health claims data to better understand the fundamentals of plan utilization, but, even more importantly, to gain insights into the conditions behind the claims and the scope of risk they represent. 

Traditional data analytics’ enables plan administrators to gain a “snapshot” of diseases and dollars. Clinical informatics supplements that view with valuable context. Or, to go back to academia’s old adage: Analytics will say your hair’s on fire. Informatics tells you why.

When both are used in harmony, employers can more effectively uncover the root causes of risks to the health plan – or why costs threaten to burn it up. The result: smarter clinical and administrative decision-making that puts the fires out.

Clinical informatics might suggest alternative patient care regimens. Or identify outdated or unnecessarily expensive treatments. It has also illuminated billing errors, saving firms considerable money and giving them better control against waste and fraud. With other uses, like assisting in navigating stop-loss lasers applied to high-risk plan members, clinical informatics improves control over plan management.

Predictive modeling and generative artificial intelligence can further boost informatics’ power by identifying issues before they grow into a costly health plan drain.

For example, data analytics showed that its mental health claims were out of control. It took informatics to reveal why. There was a gap between the provision of medications and therapy follow-ups. Plus, the employee assistance plan’s three annual visits per member were not utilized as in-network mental health professionals were overbooked and unavailable. In response, the employer added resources, improving access, employee well-being and reducing medical claims.

It’s only been in the last few years that small and mid-sized, fully insured employers were entitled by law to the same access to their benefits data as their large counterparts. This improved transparency over plan performance and cost drivers. As fiduciaries, these employers now must find smart ways to use the tools available to them. A holistic strategy applying data analytics and clinical informatics can be invaluable; a knowledgeable insurance broker can provide vendor resources.

Still, Oregon employers must keep in mind is that a “cheap” healthcare plan isn’t the same as a cost-effective one. A plan that doesn’t cover an expensive but effective medical procedure in favor of less-aggressive treatment might save money up front. But that approach may just postpone the inevitable, and cost more in the long run.

In today’s world, innovation applies to more than just product design and service offerings. It really translates into the kind of thinking, fueled by data-driven strategies, that can be applied to health plans to improve costs and care.

About the author

Samantha Bradley is Senior Vice President, Employee Benefits at leading global insurance brokerage HUB International Oregon. With over 10 years of experience in the employee benefits industry, she facilitates and manages complex benefit program initiatives for various clients in multiple different industries.