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Selected TPA Benchmarks

By John Park

sherlock@sherlockco.com

Dear ME-P Messrs and Mesdames:

In this edition of Plan Management Navigator, we summarize the results of selected TPAs. Administrative expenses for core services of selected TPAs were 98% of fees in 2010. This was $18.72 per employee per month (PEPM) or $8.08 per member per month (PMPM). Core Medical product costs were $22.15 PEPM and $10.99 PMPM.

Elite Performers 

While the universe of participants was small, at 7 TPAs serving 1.4 million people, the surveyed TPAs may well be elite performers. Function-by-function, these TPAs had lower costs than are typically found in competitive products of Blue Cross Blue Shield and Independent/ Provider-Sponsored plans.  They are also typically among the largest 20% of TPAs. Finally, they have accounting systems sufficiently robust to report with the granularity required of the Sherlock survey. If one subscribes to the adage, “you manage what you measure,” strong reporting is an indicator of effective management.

Sherlock TPA Benchmarks

The Sherlock TPA benchmarks are designed to overcome TPAs’ historic performance measurement challenges. We overcome the diversity of products sold through a highly granular presentation, and inconsistency of TPA reporting conventions through our unique, industry-based cost classification system. It is informed by 514 health benefit organization years of experience, and more than 60% of all insured Americans are users of the 2011 edition of the Sherlock benchmarks.

Assessment 

The summary in Navigator is excerpted from the 2011 TPA edition of the Sherlock Expense Evaluation Report, which is now available to licensees and participants.

Link: September 2011 Navigator

Sherlock Company
Douglas B. Sherlock, CFA
Ph: 215-628-2289

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Filed under: Accounting, Alerts Sign-Up, Health Economics, Healthcare Finance, Practice Management, Research & Development | Tagged: Douglas B. Sherlock CFA, John Park, Plan Management Navigator, Sherlock Company, TPA benchmarks | 1 Comment »