by Dianne Kiehl
The BHCG continues to “lead the way” with strong cost savings results
From the Executive Director

In my last Executive Director Report for the April edition of The Catalyst, I discussed the substantial progress the southeast Wisconsin region has made over the past 10 years in bringing costs down closer to the levels of our Midwestern neighbors. Not coincidentally, those are the same 10 years the BHCG has been in existence, actively engaged in addressing health care cost issues in our community.

In this Report I would like to focus specifically on how the BHCG members’ health care costs fared in two recently completed analyses. In a word, these results were outstanding! BHCG member employers continue to outperform the southeast Wisconsin market while also showing a remarkably flat cost trend over the past seven years. Let’s take a closer look at the two studies independently.

BHCG member costs compared to SE Wisconsin for 2011
An analysis conducted by the actuarial firm Milliman, demonstrates that the BHCG continues to outperform the southeast Wisconsin market, the Midwest and the nation as a whole. BHCG members’ costs, based on 2011 claims and administrative fee data – the most recent data available – were 11 percent below the costs for the southeast Wisconsin region, four percent below the Midwest average and six percent below the national average. The table below shows the BHCG cost results, as reported by Milliman, to benchmarks from a study commissioned by the Greater Milwaukee Business Foundation on Health (GMBFH). This table shows improvement against all benchmarks in 2011 compared to 2010.

BHCG member costs compared to SE Wisconsin for 2011


Cost Comparisons

Variation from GMBFH Benchmarks





BHCG vs. Southeast Wisconsin




BHCG vs. Midwest




BHCG vs. Nationwide



Source: Study of 2011 Southeast Wisconsin Community Healthcare Premium Costs, Greater Milwaukee Business Foundation on Health (GMBFH), December, 2012 and proprietary BHCG data, as provided by Humana.

Based on commercial premium equivalents (medical, drug and administrative costs).

Differences from benchmarks may be due to demographic mix, benefit design, utilization and mix of services and unit prices, among others.

Self-Funded employers show near flat trend over seven years
A second study based on 2012 claims data shows the self-funded member employers have experienced a 1.6 percent average annual increase in per member per month (PMPM) medical costs (prior to benefit application), over the seven years the BHCG has offered the Humana Preferred Network (HPN) to its member employers. A subset of self-funded employers that supplied baseline data in 2005 and have offered the network every year since its inception have seen no increase in their PMPM costs over the seven years. During this same time period, costs have increased between seven and 10 percent annually in the southeast Wisconsin market. Comparing the cost trend experienced by BHCG self-funded employers with the trend for southeast Wisconsin as a whole yields an estimated savings of $773 million over a seven year period for BHCG self-funded employers.

Fully insured BHCG member employers are benefiting from the HPN and its more than 10 percent premium advantage compared to Humana’s broader, regional PPO network. Additional evidence of the fully insured marketplace’s interest in BHCG participation is found in membership gains. From January 2012 to January 2013, fully insured membership grew 3.4 percent.

The results of these two studies clearly demonstrate that we are delivering on our stated goals of maintaining our costs at or below the Midwest average and achieving ongoing medical cost trend rate that is at or below the rate of general inflation.

Thanks to the collaborative effort and involvement of our member employers, provider partners, members’ employees, brokers and consultants and our administrative partner, Humana, the BHCG has made remarkable progress. While these studies show that we are on the right track, we know much work remains to be done to keep moving the needle in the right direction. The BHCG looks forward to continuing to drive meaningful change in our market.

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