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Photograph by A. Aubrey Bodine • Copyright © Jennifer B. Bodine |
Sherlock Expense Evaluation Reports are the definitive benchmarks for health plan performance. They are critical tools to enhance operational performance and competitive position. The benchmarks also support strategic initiatives ranging from management of the product portfolio, vendor negotiations, outsourcing and business combinations.
The Patient Protection and Affordable Care Act and the weak economic environment has increased the impetus to manage health plan administrative costs. While the weak economy contributes to a loss of membership and a commensurate need to reduce administrative costs, health care reform leads to additional pressures on health plan administrative expenses. Premium rate increases will be subject to more intense oversight and medical loss ratios (MLRs) will be subject to strict minimums. In fact, the MLR rule is explicitly intended to encourage efficiency: “The rebate provisions of section 2718 are designed not just to provide value to policyholders, but also to create incentives for issuers to become more efficient in their operations.” (Italics added.)
Now completing its fifteenth annual survey, the Sherlock Expense Evaluation Reports (SEER) supply comprehensive and highly granular financial and operational metrics to help health plans identify whether they operate at best practice and what functional areas provide the highest returns on management efforts to enhance plan performance. The broad scope of the metrics facilitates drill-downs to identify specific operational issues that can be used to map solutions to performance variances.
SEER benchmarks are broadly accepted. Health plans serving 143 million Americans rely on our 2011 benchmarks. Sixty-two plans are participating in this year's benchmarking study, collectively serving nearly 50 million members. In all likelihood, your competitors are users of Sherlock Benchmarks.Consulting firms use our benchmarks in service to their clients and our benchmarks have been used for public policy purposes.
SEER is provided in hard copy and, two electronic forms. One of the electronic forms permits users to copy SEER for use throughout the user’s organization in a form that is similar to the style of the written document. A second version, sometimes called a “flat file” has similar content to the first electronic form of the document, but omits graphs for faster navigation. It is in Microsoft Excel ®.
SEER is produced in two volumes consisting of operational and financial metrics. While encyclopedic in scope, it is organized for ease of use. These analyses are supported by extensive documentation. Detailed definitions and calculation notes are included with SEER reports.
*Comes With All Operational Metric Volumes
The financial metrics are highly granular so that they can be actionable. Costs are segmented into up to 59 functional areas and 12 products. In other words administrative expenses are segmented into up to 708 product expense cells. Operational metrics support the financial metrics. These are typically provided in three books consisting of metrics for all operational areas except for medical management, medical management metrics and utilization metrics. To assure that these benchmarks are as comparable as possible, we have several peer groups so your plan can be compared with closely similar organizations. Some results are reported in our Plan Management Navigator which you can access at the link below. A profile of the peer groups can be accessed here. Also, since the products offered by peer group vary, those products are also identified at a link at the foot of this page.
We manage the quality of our metrics through detailed procedures and through our business model. Our participation is voluntary, and access to our benchmarks is limited to those who are committed to the effort: We are organized to eliminate the risk of Tragedy of the Commons. We are also independent: Sherlock Company offers no complementary products, such as business process outsourcing, that could create an appearance of conflicts of interest. Finally, we have extensive quality assurance procedures, as outlined at a link below.
Please contact us regarding the license or participation in our performance benchmarking studies.
We are gratified that many organizations are users of our benchmarks or derivative content. References include:
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American Academy of Actuaries
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American Enterprice Institute
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Congressional Research Service
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Deloitte LLP
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Scott Harrington, University of Pennsylvania
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Woolhandler, Campbell and Himmelstein
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