Affordability of health benefits is a continuing concern for employers in the hotel industry, and managing the constantly rising costs is not getting any easier.
In 2026, medical cost trends are expected to rise between 7 percent and 9 percent, paced by prescription drug costs escalating by 10 percent to 12 percent.
Another possible impact could be the expiration of the enhanced tax credits at year, as per the pending “One Big Beautiful Bill;” the average monthly premium for family coverage is expected to jump to $1,904 from $888.
While that is for the individual market, employer-sponsored plans are also expected to see higher costs with the bill’s provisions, just adding to the financial pressures in an industry where many firms have lower and tighter margins.
In times past, a common solution to the health benefits cost squeeze was to pass the increases on to employees. That’s less than ideal, especially when a robust benefits program is key to attracting the workers necessary to keep hotels competitive—and 65 percent were still reporting staffing shortages this year.
There are more sustainable solutions to sharpen management of healthcare plans and their costs. It involves applying both data analytics and clinical informatics to health claims data. Not only does this shed light on the fundamentals of plan utilization, but, more importantly, it provides insights into the conditions behind the claims and the scope of their risk to the plan.
Here is what is important to know.
A One-Two Punch: Applying Data Analytics and Clinical Informatics
It used to be that health insurers held claims data tight, giving fully insured clients (mostly small and mid-sized concerns) fewer ways to identify current and potential problem areas in their plan.
The Consolidated Appropriations Act (CAA) of 2023, however, gave them access to their data and more control over cost drivers and plan performance. Layering clinical informatics over data analytics is crucial for a complete understanding of the forces affecting health, performance and finances. And it has never been more important as the CAA also means employers have more liability risk if plans do not support optimal medical care.
Here’s how data analytics and clinical informatics apply.
Data analytics provides explicit, actionable knowledge. Internal health plan data and statistical algorithms reveal patterns and trends in claims. This gives plan sponsors a good overview of workforce health and the conditions that drive benefits costs.
Layering on clinical informatics gets at the implications. If data analytics reveal financially troublesome medical trends, clinical informatics suggest why conditions are manifesting and what risks they represent. Data analytics’ “snapshot” of diseases and dollars is supplemented by clinical informatics. With both, employers can not only uncover the root causes of health plan risks but find a path for smarter clinical and administrative decision-making.
How it Plays Out
Here is how to look at their interplay.
Take one plan where analytics reveal an expansion in its population of diabetic employees. One worrisome member is linked to $350,000 in claims. Analytics also show a rise in concurrent and prospective risk scores. So is utilization of a certain, high-cost drug. The plan sponsor also sees how year-over-year plan changes have played out. While helpful, no next steps are suggested to appreciably change plan or health outcomes.
A more holistic view of facts, patterns and prognoses can be gained with clinical informatics. Take the growth in diabetic plan subscribers. Through informatics, the employer learns there is a shortage of endocrinologists in key plan communities. And that the particular high-cost member might well have another $300,000 in claims. In looking for “whys” it finds provider-based gaps in care are boosting risk scores. And that heavy medication utilization is a function of off-label, non-evidence-based use. It further suggests intervention to drive better results without impacting utilization.
That is all hypothetical. In a real-world example, clinical informatics enabled one HUB International client to get at the root cause of out-of-control mental health claims. It was due to a gap between medication provisions and therapy follow-up visits, and underutilized employee assistance plan resources.
The employer responded by adding mental health resources, improving access and employee well-being. Plus, medical claims dropped, so the plan’s financial well-being improved, too.
Numerous advanced tools are increasingly available to help employers better monitor and manage health plan performance and costs. A knowledgeable insurance broker is a key partner on this front, someone who can open the door to resources that make a difference.
About the author: Kimberly Gore is the National Practice Leader of HUB International’s Hospitality Specialty Practice.
This article was originally published in the November/December edition of Hotel Management magazine. Subscribe here.