Why Utilization Benchmarking Matters
Utilization benchmarking allows employers to compare their plan's performance against industry norms and identify areas of over- or under-utilization. According to the WHO's Global Health Observatory, inpatient admission rates, average length of stay, and outpatient visit frequency are core metrics that vary significantly by country and plan design.
Employers should track these metrics over time using their own plan data. Changes in utilization patterns often signal shifts in workforce health needs, plan design effectiveness, or provider behavior that warrant attention.
Key Metrics to Track
Core metrics include: inpatient admission rate per 1,000 covered lives, average length of stay, outpatient visit frequency per covered life per year, specialist referral rate (in gatekeeper plans), and the split between cashless and reimbursement claims. These metrics should be tracked quarterly and compared year-over-year.
Maternity claims typically represent a disproportionate share of inpatient costs relative to volume, given the concentrated expense of delivery and neonatal care. Employers should track maternity separately to avoid distorting general inpatient trend analysis.
Interpreting Telemedicine Trends
Telemedicine utilization has grown significantly since the pandemic. Employers should monitor what proportion of outpatient encounters are conducted via telemedicine, and whether telemedicine is supplementing or replacing in-person visits. Growth in telemedicine that adds to total visit volume rather than substituting for in-person visits may increase overall costs.
The WHO and multiple health systems research bodies have noted that telemedicine adoption varies significantly by age group, geographic location, and digital literacy, all factors employers should consider when interpreting their utilization data.
Implications for Plan Design
Utilization data provides the foundation for evidence-based plan design decisions. Plans with unusually high utilization in certain categories may benefit from enhanced care management programs, plan redesign to introduce appropriate utilization controls, or provider network adjustments.
Employers with utilization below expected levels should investigate whether this reflects a healthy workforce, access barriers, or lack of employee awareness about available benefits. Under-utilization can be as costly as over-utilization in the long term if it leads to deferred care and more expensive interventions later.