Part 2: Think Like a Payer: Key Metrics for Medical Loss Ratio (MLR) Success
Tracking Medical Loss Ratio (MLR) metrics empowers providers to manage financial risk, improve care quality, and strengthen payer partnerships. In value-based contracts, providers share accountability for total cost of care—making MLR performance a direct reflection of clinical and operational efficiency.
By monitoring key indicators like utilization, preventive care compliance, and chronic disease management, providers can:
Identify cost drivers early
Target high-impact interventions
Align with payer expectations and incentives
Support sustainable, value-driven care delivery
Ultimately, tracking MLR metrics transforms providers from service deliverers into strategic stewards of health system performance.
Some examples of MLR Key Metrics to consider:
1. Total Cost of Care (TCOC)
Tracks overall healthcare spending per member per month (PMPM)
Helps identify cost drivers and opportunities for savings
2. Utilization Rates
Emergency department visits
Hospital admissions and readmissions
Outpatient procedures and imaging
Helps pinpoint avoidable or low-value care
3. Preventive Care Compliance
Annual wellness visits
Cancer screenings (e.g., mammograms, colonoscopies)
Immunization rates
Supports quality improvement and reduces future high-cost events
4. Chronic Disease Management
HbA1c control in diabetics
Blood pressure control in hypertensive patients
Medication adherence
Reduces complications and long-term costs
5. Care Coordination Metrics
Follow-up after hospital discharge
Transitional care management
Referral completion rates
Improves continuity and reduces fragmentation
6. Risk Adjustment Accuracy
Completeness of diagnosis coding
HCC (Hierarchical Condition Category) capture
Ensures appropriate reimbursement and reflects true patient acuity
7. Patient Engagement & Access
Appointment availability
No-show rates
Portal usage and telehealth adoption
Enhances access and reduces unnecessary utilization
8. Quality Scores
HEDIS and STAR measures
CAHPS patient experience scores
Aligns with payer incentives and regulatory benchmarks
A Call to Action
Healthcare providers are no longer just service deliverers—they’re strategic partners in managing total cost of care. By adopting a payer’s lens, providers can better align with MLR goals, enhance contract performance, and ultimately deliver more value to patients and communities. For more information, or to reach out to one of our team members contact us at info@viabilitycompany.com.