Plus: Active Cost Management as a Standard Feature, Not an Upsell

LFP-15.03

Plus includes everything in Core plus active cost management capabilities bundled as standard features. The critical design decision is that these are not add-ons priced separately. They are standard because the savings they produce exceed the PEPM differential, making Plus self-funding for the employer who engages.

The add-on model produces adverse self-selection. The standard inclusion model produces better adoption, better engagement, and better outcomes.

The Capability Stack Beyond Core

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The Plus employer receives Core administration plus six active cost management programs that operate as standard features.

Domestic facility steering routes members to lower-cost facilities for planned procedures. The price variation for the same procedure at different facilities within the same metropolitan area is substantial. Carrum Health, which operates centers of excellence programs for employers, reports savings of up to 45% per surgical episode and up to 30% reduction in unnecessary procedures when members are steered to high-quality, lower-cost providers. Lantern, formerly Employer Direct Healthcare, reports 50% lower plan costs for steered members with complication rates below 1%. The Peterson Health Technology Institute’s 2024 analysis found that surgical bundle arrangements through centers of excellence programs can save more than $16,000 per surgery.

At Plus, domestic facility steering works through navigation rather than mandate. When a member needs a planned procedure, the navigation team identifies lower-cost, high-quality alternatives and presents them. The member retains choice. The navigation team explains the cost differential, quality metrics, and what the member saves in cost-sharing. For procedures like joint replacement, spinal fusion, and bariatric surgery, the steering conversation often produces savings of $10,000 to $40,000 per procedure. One successful steer per hundred enrolled members per year produces material savings against the Plus PEPM differential.

Pharmacy optimization includes a transparent PBM relationship, formulary management emphasizing generics and biosimilars, specialty drug management, and cost-sharing design that incentivizes lower-cost alternatives. The pass-through PBM model that Plus requires eliminates the spread pricing, rebate retention, and opaque revenue streams that traditional PBM relationships produce. The employer sees the acquisition cost, the dispensing fee, and the administrative fee separately. When a member is prescribed a brand medication with a generic equivalent, the cost-sharing structure makes the generic materially cheaper for the member. When a specialty medication has a biosimilar alternative, the formulary favors the biosimilar.

At the small group scale, pharmacy optimization operates differently than at large employer scale. The volume does not justify custom formulary negotiations. What Plus offers is rigorous formulary adherence, consistent generic conversion, and specialty drug management that identifies members on high-cost medications and ensures they are receiving appropriate care management, prior authorization reviews, and alternative therapy evaluations where clinically appropriate. The savings per member per month compound because pharmacy costs represent 20% to 30% of total claims for many populations.

Maternity management includes early identification of pregnant members, doula support, high-risk pregnancy monitoring, birth planning, and NICU avoidance strategies. Maven Clinic, which provides virtual maternity management to employers, reports validated results: 27% to 28% fewer NICU admissions, 15% to 20% fewer cesarean sections, and average savings of $9,600 per birth. For NICU specifically, the average cost of admission runs over $3,000 per day, and the average stay exceeds one week. Maven’s 2025 program enhancements include NICU support that can shorten stays by up to 8%, producing savings of approximately $5,500 per stay.

The arithmetic is favorable for Plus. One avoided NICU admission can save $50,000 to $200,000. One reduced cesarean rate across ten births saves the procedure cost differential and the extended recovery costs. One preterm birth prevented saves the hospital costs, the long-term developmental costs, and the family disruption. Maternity management at Plus identifies pregnancies early through claims signals, enrolls members in the program, provides navigation and support throughout the pregnancy, and intervenes proactively on high-risk indicators. The member experiences better care. The employer experiences lower costs.

MSK pathways include virtual physical therapy, surgical second opinions, and return-to-work coordination. Musculoskeletal conditions represent the highest cost category for many employer populations, particularly those with blue-collar, construction, manufacturing, or physically demanding service work. Hinge Health, which provides virtual MSK care to employers and health plans, generated $390 million in revenue in 2024 serving over 20 million contracted lives. Sword Health, another major virtual MSK provider, reports validated savings of $3,177 per engaged member per year and a 3.2:1 return on investment. The Peterson Health Technology Institute’s October 2024 analysis found that physical therapist-guided virtual MSK solutions produce outcomes comparable to in-person physical therapy with net decreases in spending of $737 to $1,306 per person in the first year.

At Plus, MSK pathways operate as a standard feature. When claims data identifies a member with MSK conditions, or when a member self-identifies with joint, spine, or muscle pain, the navigation team enrolls them in the virtual physical therapy program. The program includes licensed physical therapists, sensor-guided exercises, and ongoing coaching. For members considering surgery, the second opinion program ensures they have received appropriate conservative care first and that the proposed procedure is clinically indicated. The return-to-work coordination feature helps members after surgery or acute injury return to productive function faster.

Chronic disease programs include targeted coaching for members with identified chronic conditions. At Plus, the focus is on diabetes, hypertension, and related metabolic conditions. Livongo, now part of Teladoc Health, provides chronic disease management to over 730,000 patients and reports savings of approximately $83 per member per month for diabetes management programs. Omada Health reports cost savings to employers averaging $1,338 per participant by 24 months. These programs combine connected devices, health coaching, and behavioral change support to help members manage their conditions and avoid costly complications.

At Plus, chronic disease programs are not broad wellness initiatives. They are targeted interventions based on claims data identification. When the claims data shows a member with diabetes, hypertension, or prediabetes indicators, the navigation team enrolls them in the appropriate coaching program. The member receives a connected device, coaching support, and ongoing engagement. The employer sees reduced emergency department utilization, reduced inpatient admissions, and improved medication adherence. The savings from avoided complications exceed the program cost.

Enhanced member navigation at Plus goes beyond the Core portal. The Plus member has access to dedicated navigation support that helps them find the right provider, understand their options, estimate costs before receiving care, and access the cost management programs. Navigation is not call center triage. It is proactive outreach when the member’s claims data or health profile indicates an opportunity for better care at lower cost. The navigator helps the member engage with facility steering, pharmacy optimization, or chronic disease programs. The navigator answers questions about benefits, explains cost-sharing, and troubleshoots issues before they become complaints.

Enhanced employer analytics at Plus includes current-period claims data with cost driver identification, high-cost claimant trending, and program engagement metrics. Where Core provides retrospective monthly reports, Plus provides near-real-time dashboards. The employer sees where their money is going, which programs are generating engagement, and which members are driving high-cost trends. The broker sees the same data and can have consultative conversations about cost management strategy rather than simply reviewing claims summaries.

Why Standard, Not Upsell

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The add-on pricing trap produces adverse self-selection. When cost management programs are sold as add-ons, the employers who need them most are the ones who decline them. The cost-conscious small employer facing a $10 to $15 PEPM add-on for maternity management decides the cost is not worth it, even though their workforce includes members in the maternity-age cohort. The employer who adds the programs is often the one who least needs them: already health-conscious, already managing costs, adding the program as a benefit rather than a cost management tool. The add-on model produces low adoption of high-value programs.

The standard inclusion model at Plus changes the dynamic. Every Plus employer gets every cost management program. The savings are captured across the population. The employers who engage most heavily with the programs produce the most savings. The employers who engage less still benefit from pharmacy optimization and facility steering, which operate without individual member engagement. The pharmacy formulary produces savings whether or not the member knows the formulary exists. The facility steering conversation happens when the procedure is scheduled, not when the employer decides to purchase an add-on.

The bundled design also simplifies the Plus value proposition. The employer is not evaluating whether maternity management is worth $6 PEPM and MSK pathways are worth $4 PEPM and pharmacy optimization is worth $8 PEPM. The employer is evaluating whether Plus is worth more than Core. The comparison is one decision with a clear value proposition: active cost management for employers with cost drivers, priced at a PEPM differential that the savings exceed.

Target Segment

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Mid-complexity employers represent the primary Plus segment. These are groups of 15 to 50 employees with identifiable cost drivers. The workforce has chronic disease prevalence. The workforce has MSK exposure from physical work or sedentary work that produces back pain. The workforce has maternity-age members. The pharmacy spending exceeds benchmarks. For this employer, Core administration is insufficient because they have cost drivers that standard administration does not address. Plus gives them programs that target their specific drivers.

Employers with moderate willingness to invest represent the second segment. They want more than basic administration but are not ready for the full concierge experience that Black offers. They want cost management that produces measurable results and are willing to engage with the programs. They will communicate the programs to their employees. They will work with the navigation team. They are not passive plan sponsors. But they are not yet ready for geographic arbitrage, cross-border care, or the premium concierge that Black provides.

Employers upgrading from Core represent the third segment. The employer who started at Core, demonstrated plan management competence, and now encounters cost pressures that justify Plus capabilities is the natural upgrade candidate. The cost pressure might be a high-cost claimant, a stop loss premium increase, a maternity cluster, or a pattern of MSK claims that the employer wants to address proactively. The Core employer who trusts the TPA and understands their claims data is ready for the Plus conversation. The upgrade produces higher PEPM revenue and delivers cost management value that strengthens retention.

Plus and AI-Augmented Distribution

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Plus occupies a specific position in the distribution architecture. Core is simple enough for fully digital self-service. A small employer can complete a census, receive a quote, and enroll without broker involvement. Black is complex enough to require consultative human sales. The geographic arbitrage, cross-border coordination, and concierge features require explanation and relationship building that digital channels do not support.

Plus sits between. The cost management programs require explanation and population-level analysis that exceeds a static enrollment platform. The broker needs to understand the employer’s workforce, identify likely cost drivers, and explain how the Plus programs address those drivers. But the advisory does not require the deep consultative relationship that Black demands.

This position makes Plus the natural tier for AI-augmented distribution. An AI agent that can ingest a census, analyze population characteristics, and identify likely cost drivers can deliver the advisory value that Plus requires without the human broker time that makes sub-25-life groups uneconomic for traditional broker distribution. The AI agent identifies MSK exposure in a construction workforce, maternity probability in a workforce concentrated in ages 25 to 38, chronic disease prevalence in an aging population, and recommends Plus with specific program activation based on the analysis.

The design implication for Plus is that the programs must be presentable in a format that an AI advisory layer can explain. The activation criteria must be tied to population characteristics that the census reveals, not to broker judgment or relationship knowledge. The recommendation logic must be codifiable. This is a product design constraint that flows from the distribution strategy. Plus programs that cannot be explained by an AI agent cannot be distributed through the AI-augmented channel.