Executive Summary: The Combined Cost Impact: What Happens to a 25-Person Plan When You Stack Every Available Strategy
LFP-10.SYN — The Cost Management Frontier#
Series 09 modeled what happens to a 25-person plan when cost drivers converge: specialty drugs, pregnancy complications, GLP-1 utilization, MSK procedures, mental health amplification, and chronic disease compounding. The moderate convergence scenario pushed expected claims from $375,000 toward $450,000 to $500,000. That was the problem. This synthesis is the response. It stacks every cost management strategy from Series 10 on the same plan, expresses savings as ranges with explicit assumptions, and models both gross and net-of-implementation-cost outcomes.
The baseline is a 25-person professional services firm with moderate cost driver convergence: average age in the low 40s, three members with chronic conditions, two members in the 55-to-64 age bracket, one expected pregnancy, and one member on a GLP-1 medication. Expected claims fund at standard utilization: $375,000. The baseline assumes no active cost management, meaning the plan paid whatever the provider charged at whatever facility the member chose, through the PBM default, with no navigation, no steering, and no clinical pathway management.
Strategy-by-strategy impact:
Domestic steering for two qualifying elective procedures produces $18,000 to $38,000 in savings based on published price transparency variation between urban academic medical centers and lower-cost ambulatory surgery centers or community hospitals.
Cross-border care for one qualifying dental procedure at a JCI-accredited facility in Mexico saves $7,000 to $13,000. If the qualifying procedure were orthopedic, savings would be $20,000 to $35,000, but the conservative estimate uses the more common dental scenario.
International pharmacy for two members on high-cost brand-name maintenance medications produces probability-adjusted savings of $4,000 to $8,000 after accounting for legal complexity and member acceptance.
Maternity management for one expected delivery saves $5,000 to $25,000, with the range driven by the binary outcome of whether the pregnancy is complicated or uncomplicated.
MSK pathways for three members with active MSK conditions, combining virtual PT, surgical second opinion, and facility steering, produce $15,000 to $40,000 in savings.
Mental health access and SDOH intervention produce $5,000 to $15,000 in diffuse savings distributed across the population through prevented emergency department visits, avoided behavioral health crises, and improved chronic disease management.
Chronic disease interception (current-year component) saves $5,000 to $15,000. GLP-1 cost management saves $4,000 to $6,000 in current-year pharmacy cost reduction.
Total gross savings range: $63,000 to $160,000. Total implementation costs across the full strategy stack: approximately $21,400 to $55,300 annually. Net savings range: approximately $7,700 at the conservative end to $138,600 at the optimistic end. The midpoint, net savings of $55,000 to $70,000, represents 15 to 19 percent of the $375,000 expected claims fund.
The strategies with the strongest evidence base are MSK pathways and mental health access. Even excluding all geographic arbitrage strategies, the clinical pathway strategies alone produce gross savings of $52,000 to $139,000 against implementation costs of $18,000 to $50,000. The net positive holds without the geographic strategies.
The difference between a TPA that processes claims and one that deploys this full strategy stack is not incremental efficiency. It is a different business. A TPA managing 5,000 covered lives at $20 per employee per month generates $1.2 million in annual administrative revenue. The same TPA generating $200 in net claims savings per member per year creates $1 million in additional annual value for employer clients, value that justifies performance-based compensation above the base administrative fee and builds switching costs that price-based displacement cannot overcome. This synthesis is the bridge to Series 15, where the tiered product architecture is built around the cost management capability this series has mapped.