Guided Notes
Utilization & Cost: Member Months and PMPM
Build member months from enrollment, compute utilization per 1,000 and PMPM cost by service category, compare populations and spot high-cost members.
Why member months
Slide 1 / 5Health plans and ACOs pay for populations, so utilization and cost must be normalized by enrollment: • A member enrolled 6 months contributes 6 member months. • PMPM = total allowed ÷ member months. • Utilization per 1,000 = events ÷ member months × 12,000. Without this, a plan that grew 20% looks like it got 'more expensive' when it just got bigger.