The Hidden Price Risk in Healthcare Claims (Even at the Same Provider)

The total cost of care (TCOC) is staggeringly variable, even for the exact same treatment, at the same provider. This hidden volatility poses a major risk for stop-loss carriers, MGUs, and self-funded employers managing high-cost claims.

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What if the data you're relying on is leading you astray? Simpson’s Paradox has a sneaky way of flipping the script in healthcare cost analysis—making the "best" contracts look like the worst (and vice versa). In high-stakes carve-outs for transplants, oncology, and more, this misinterpretation can cost millions.

The increasing cost of healthcare is creating serious financial risks for businesses across the board. High-cost claims, especially those related to transplants, oncology treatments, and advanced therapies like gene and cell therapy, are becoming more frequent and expensive.

The escalating costs of medical claims, especially for transplants, are putting increasing pressure on the healthcare system, forcing payers and providers to find more sustainable solutions.

For Managing General Underwriters (MGUs), the ability to effectively manage catastrophic claims is a key differentiator in a highly competitive market. As healthcare costs continue to rise and catastrophic claims like transplants, oncology treatments, and advanced therapies grow more frequent, MGUs must implement smarter strategies to stay ahead.

The cost of healthcare premiums continues to rise, placing increasing pressure on employers across the United States. According to the Kaiser Family Foundation (KFF), the average annual premium for employer-sponsored family health coverage rose to $22,463 in 2023, marking a 7% increase over the previous year.

The financial pressures of managing high-cost claims like transplants, oncology treatments, and advanced therapies are well-known, but there’s another challenge that businesses face when dealing with these claims: the overwhelming administrative burden.