Health plans are walking a tightrope. On one side, utilization is climbing and breakthrough therapies, while clinically promising, are reshaping cost curves. On the other hand, members, employers, and providers expect more convenience, transparency, and value. The mandate is clear: deliver better outcomes and experiences without sacrificing affordability. Meeting that mandate requires more than more data. It demands the ability to turn data into timely, meaningful action to better manage the total cost of care.
Yet for many organizations, that critical “last mile” of effectively managing the cost of care remains difficult to achieve and sustain. Data lives in disparate systems, trust in metrics varies by stakeholder, and insights often surface too late, or too far from the point of decision, to influence behavior.
In a recent MedInsight webinar, leaders from CareFirst BlueCross BlueShield (CareFirst) and Milliman MedInsight (MedInsight) offered a candid, behind the scenes look at how one Blues plan tackled these barriers head on. They described how they modernized their analytics approach to deliver measurable cost of care impact across the enterprise by embedding analytics into day-to-day workflows, aligning stakeholders around shared metrics, and prioritizing use cases with clear ROI.
The cost of care challenge facing health plans today
CareFirst serves millions of members throughout the Mid-Atlantic region, spanning commercial, government, Medicare Advantage, and self-insured lines of business. Like many health plans, the organization understood that meaningful affordability efforts must target the areas with the greatest financial impact.
As Troy Smith, Vice President of Cost of Care and Care Partnerships at CareFirst, noted during the discussion, approximately 85 cents of every premium dollar is spent on medical costs. That reality has shaped CareFirst’s strategy, prioritizing efforts to bend the cost curve rather than focusing solely on incremental operational efficiencies.
The obstacle was not a shortage of data. CareFirst had robust analytics capabilities and seasoned teams in place. The real challenge was ensuring alignment across departments and consistently translating insights into coordinated action.
From isolated analytics to an enterprise strategy
A pivotal turning point for CareFirst was establishing a clear, repeatable cost of care framework that connected analytics to action. Rather than relying on isolated reports or ad hoc analysis, CareFirst set out to build a structured process that moves from data and benchmarking to ideation, project activation, and ongoing measurement.
For data insights to shape strategy, teams across clinical, network, finance, and leadership must trust that the numbers are accurate and aligned with how the organization measures performance. CareFirst recognized that building this trust meant closely aligning analytics with actuarial models and financial reporting.
In many healthcare organizations, teams rely on slightly different data sources or methodologies, which can lead to confusion, delays, and doubt in the results. By leveraging existing actuarial data feeds already in use with Milliman, CareFirst was able to quickly align its analytics approach and begin using the platform to identify and drive savings. Stakeholders could quickly identify where spending diverged from well-managed peer performance and prioritize opportunities with the greatest potential impact.
“One of the [reasons] we chose Milliman was what they had in their tool set to be able to take a look at savings opportunities…Their health cost groupers allow us to take a look at different categories of spend… that difference gives us leading indicators to say, you might want to look at outpatient surgery, or perhaps look at inpatient medical spending or other spending categories as areas of focus….”
Troy Smith
Vice President of Cost of Care and Care Partnerships at CareFirst
Turning insights into measurable results
What made CareFirst’s approach to managing cost of care effective was its focus on activation and measurement with the MedInsight platform serving as a trusted, single source of truth. The ability to move seamlessly from high-level benchmarks to detailed views by service category, diagnosis-related group (DRG), facility, or individual provider allowed teams to validate insights and collaborate on solutions. This flexibility enabled leaders to validate findings, ask informed questions, and pressure-test assumptions. Smith explained, “The data that we [have]… gives us a direction to [ask]: Where should we be looking? What can we actually activate on?”
In addition, CareFirst emphasized MedInsight’s role as an extension of their internal team. Early focus on data quality, transparency around findings, and collaborative problem-solving helped to build trust and momentum. This partnership approach enabled faster adoption and deeper integration into CareFirst’s cost of care processes.
For more complex or high-value programs, such as provider contracting strategies, CareFirst brought finance and actuarial partners directly into the validation process. “It was,” Smith explained, “an extension of the relationship that we had in place with Milliman, from [the start].”
This structure enabled CareFirst to balance speed with rigor. Teams could move quickly to pilot or implement targeted interventions, monitor early signals of success, and refine tactics in real time. At the same time, the involvement of finance and actuarial partners preserved analytical integrity and ensured that results stood up to scrutiny.
Building a culture around cost of care
Perhaps the most important lesson from the discussion was that analytics transformation is as much about culture as technology. CareFirst intentionally involved leaders and teams across the organization in cost of care discussions. Representatives from multiple departments participate in reviewing trends and evaluating potential interventions, creating shared ownership and alignment. This cross functional engagement helped shift cost of care from a single team’s responsibility to an enterprise-wide priority supported by data.
Looking ahead: expanding the value of analytics
CareFirst is now expanding its analytics foundation beyond traditional cost of care applications. With a unified and consistent data layer in place, the organization is exploring its opportunities to support broader initiatives, including value-based care, enhanced employer reporting, and network strategy development.
By operating from a standardized data cube, CareFirst can conduct true “apples-to-apples” comparisons across products, populations, and market segments. This consistency enables more informed decision-making and strengthens strategic efforts.
From its transformation effort, below are four principles health plans should consider when building a scalable, results-driven cost of care strategy:
- Cost of care as an enterprise strategy, not a silo: Make affordability a top-level priority and focus on bending medical trend rather than chasing marginal operational efficiencies.
- A repeatable governance model: Use a structured lifecycle led by a cross-functional governance team that meets regularly to ensure prioritization, accountability, and alignment with enterprise financial goals.
- Engage multiple operational levers: Drive savings by positioning cost of care as a shared responsibility enabled by formal governance and self-service analytics.
- Measurement and financial validation: Validate savings with finance and actuarial partners to build trust and sustain investment.
The takeaway for health plans is clear: analytics alone are not enough to drive meaningful cost of care improvement. When paired with governance, trust, and activation, analytics can become a strategic asset that helps organizations manage affordability and improve outcomes in a highly competitive and complex healthcare environment.
Watch the webinar on demand
Access the recorded session to explore CareFirst’s Total Cost of Care (TCOC) approach in-depth and learn practical strategies for driving measurable cost and performance improvement.
