What Is A Total Cost Of Care Approach?

Jul 26,2023

Read Time 7 Minutes

Mini-White Paper: Control Costs And Improve Quality Of Care


Do you know where your organization's healthcare and employee benefits dollars go? More than ever, employers are looking for cost savings while also improving the quality of employee care. Maximizing your return on investment may seem challenging without a clear understanding of the solutions and programs that can make a meaningful impact on the health of your workforce and your company’s bottom line.

Simplifying your strategy and decision-making is easier when you understand the full picture of your organization's spending and cost-saving opportunities. See how a Total Cost of Care approach can provide more value for you and your employees through the areas of network and benefit design, member engagement, clinical programs, and cost protection. 


Learn more about the four key components of Total Cost of Care in our mini-white paper below.

ABCBS Understanding TCOC Mini Whitepaperr

Understanding the full picture of Total Cost of Care


A strategic approach to lowering employer healthcare costs


Healthcare costs are projected to increase an average of 7% in 2024 due to rising industry expenses and inflation.1 For instance, if an employer’s health plan currently costs $10,000 per employee in 2023, it would cost approximately $10,700 in 2024. Given this trend, employers continue to look for ways to control costs while improving the quality of employee healthcare.


By adopting a Total Cost of Care (TCOC) approach, you can gain a clearer picture of the solutions that can not only provide high-quality care for your employees, but also make a meaningful impact on the health of your organization and your bottom line.


What is a Total Cost of Care approach?


Total Cost of Care refers to the total amount an organization spends on healthcare and health benefits for employees and their dependents. While the concept is straightforward, understanding and managing the variables that impact your organization’s health plan costs can be significantly more complex.


Let’s explore each of the key components, how they work together, and why this approach can benefit both you and your employees.


The four key components of Total Cost of Care

Network and benefit design

Clinical programs

Network and benefit design can optimize employer costs through value-based care arrangements, network discounts, high-performance and curated networks, centers of excellence (COE), and benefits tailored to your population’s health.

Clinical programs may lower overall employer costs through population health management, care management of at-risk members, medical and pharmacy integration, and integrated physical and behavioral healthcare.

Member engagement

Cost protection

An employee’s engagement with their benefits (and affiliated employer costs) can be improved through personalized resources, health advocacy, navigation support, as well as health and well-being programs.

Total Cost of Care is often affected by wasteful billing practices or inaccurate claims. Advanced data and analytics, pre- and post-payment reviews, and fraud prevention can help mitigate costs.

Our maximum access provider networks, including the BlueCard® PPO and Select Networks®, lead the industry by delivering 9-11% lower Total Cost of Care over competitors.2


Plus, our Blue High Performance NetworkSM offers an average savings of 11% on top of that.3


Network and benefit design

Build a strong foundation with your network and benefit design

Ask your health plan partner

A robust network with competitive discounts is the foundation of TCOC. However, as networks shift from volume to value, new solutions like centers of excellence and high-performance networks have emerged. It’s important to consider these factors when analyzing network and benefit designs to maximize savings opportunities.

• How long have your value-based care programs been in place? More established programs have been shown to drive quality improvements and provide a clear path to cost mitigation.

• Does your high-performance network have well-defined quality measures, using sufficient data applied across all providers? In addition to reducing total cost of care, it’s important to ensure employees are accessing high-quality providers.

Clinical programs

Make sure you have the right clinical programs

Ask your health plan partner

Effective clinical programs ensure employees are getting the right care from the right provider, particularly those with chronic conditions. Given that 90% of annual healthcare expenses are attributed to people with chronic and mental health concerns, employers can achieve savings by adopting a data-driven strategy.4 A well-informed care approach integrating physical, behavioral, medical, and pharmacy benefits can result in reduced emergency room visits, lower hospitalization rates, increased preventive screenings, and other savings.

• What quality results are you seeing from

your clinical programs? Do these results generate a return on investment (ROI)?

• Are pharmacy benefits integrated so that clinical teams have a full picture of your employees’ health?

• Do you provide programs that connect primary care and behavioral health providers to empower collaboration?

Member engagement

Encourage employee engagement

Ask your health plan partner

Your health plan partner can make sure your employees understand and get the most out of their benefits. This is another important consideration of TCOC. Whether you’re offering advocacy programs designed to help employees better navigate their benefits, or health and wellness programs that aid in prevention and building healthy habits, employee engagement is key to lowering healthcare costs.

• Do you offer customized programs providing personalized support and solutions for each employee’s unique health situation?

• Do you provide benefits such as access to health coaches and condition-specific programs, like diet and nutrition guidance?

Cost protection

Increase savings with cost protection

Ask your health plan partner

Accurately paid medical claims are one of the most fundamental ways to control costs and eliminate wasteful or abusive billing practices, commonly known as payment integrity. Regardless of whether billing mistakes stem from human error or deliberate fraud, inaccurate billing becomes a costly problem when coupled with the rising costs of healthcare, posing a financial burden for employers.


• Does your payment integrity program balance pre- and post-payment reviews to maximize savings?

• How are you using analytics and machine learning to capture claim errors?

Total Cost of Care in action 


Maternal healthcare is consistently among the highest cost claims for employers. Here’s an example of how the four TCOC components can work together to deliver savings for your organization and better health outcomes for your employees.

Meet Amy5

Network and benefit design

Clinical programs

Member engagement

Cost protection

Amy has diabetes. She wants to start a family but is having trouble conceiving.

Amy’s employer guides her to a COE for fertility care, where she receives higher-quality, more affordable care. Once pregnant, she makes plans to deliver at a COE for maternity care.

Her employer's integrated medical and pharmacy benefits allow for stronger care collaboration and data insights, which helps Amy better manage her diabetes.

Amy has access to app-based pregnancy management tools and maternal health programs to help her through her journey.

Behind the scenes, utilization management experts analyze Amy’s claims to ensure they are billed accurately.

Questions? We’re here to help. Contact your account management team, broker, or sales representative for more information. Together, we can determine the right Total Cost of Care approach for your organization’s needs.


1 PwC: Medical cost trend: Behind the numbers 2024 (accessed June 2023): pwc.com.


2 Leading Consulting Firm CY2018 Total Cost of Care Benchmark data.


3 Consortium Health Plans analysis, 2020. Savings are on average and assume 100% enrollment. Results will vary based on employer locations and implementation.


4 Centers for Disease Control and Prevention: Health and Economic Costs of Chronic Diseases (accessed June 2023): cdc.gov.


5 Amy’s story represents a potential member journey and is hypothetical in nature.


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