PHILADELPHIA, PA — Administrative cost growth among Independent and Provider-Sponsored (IPS) health plans slowed in 2024, according to new data from the Plan Management Navigator, published by Sherlock Company.
Holding product mix constant, IPS plans reported a 6.2% increase in per-member-per-month (PMPM) costs in 2024, a deceleration from 8.4% in 2023. When membership shifts—particularly growth in Medicare Advantage and reductions in Medicaid enrollment—are factored in, reported growth rose to 9.5%, down from 10.5% the prior year.
The median administrative cost across all reporting plans was $55.67 PMPM.
The findings are based on detailed surveys from 12 IPS plans serving 8.7 million members. The data is part of the 2025 edition of the Sherlock Benchmarks for Independent / Provider-Sponsored plans, long regarded as a key resource for evaluating and improving administrative performance in the health insurance industry.
While spending on sales and marketing slowed, the report notes increased investment in customer service, actuarial and underwriting operations, medical management, and information systems. Staffing, compensation, and outsourcing activity also rose.
Now in its 28th year, the Sherlock Benchmarks aggregate data from over 1,000 plan-years. Participants in this year’s survey serve approximately 58 million members across Blue Cross Blue Shield, Medicare, and Medicaid markets. Since June 2022, plans representing over 170 million members have used Sherlock Benchmarks to assess administrative efficiency and support strategic planning.
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