Revenue per Health Plan Member

Revenue per Health Plan Member

KPI Details

Revenue per Health Plan Member measures the average dollar amount of revenue generated by the company per health plan policyholder, or member. This metric is a general measure of company profitability, as a relatively low (or decreasing over time) amount of revenue production for each plan member may indicate that the company is not producing enough value to grow or improve its business. A low value for this metric may also indicate that the company is not effectively investing premiums earned (in financial markets, other alternative investment products, etc.) to produce returns that grow the bottom line.

KPI Definition

The amount of total revenue generated by the health insurance company over a certain period of time divided by the average number of health plan members, or policyholders, covered by the company over the same period of time.

KPI Best Practices

• Offer wide range of covered benefits and services to members
• High quality customer service and policyholder retention practices
• Strong financial departments that maximize financial leverage into revenue generating assets

KPI Calculation Instructions Revenue per Health Plan Member?

Two numbers are used to calculate this KPI: (1) the total revenue generated by the company over a certain time period, and (2) the average number of health plan members, or policyholders, managed by the insurer over the same time riod. For this calculation, total revenue should include premium earned, investment-related revenue and interest revenue generated by the organization during the measurement period. To calculate the average number of health plan policyholders (i.e., individuals holding a policy with the health insurance provider) over the time period, add the number of policyholders at the beginning of the measurement period and the number of policyholders at the end of the measurement period, and divide that number by

KPI Formula :

Total Revenue / Total Number of Health Plan Policyholders