Editing Openai/695d4253-5060-8005-95db-586e777927f4 (section)

===== (ii) Actions ABC can take to reduce chances of exceeding budget =====

Practical levers fall into risk transfer, budgeting/capital, and cost control:
# Risk transfer / financing - Purchase or tighten specific stop-loss and/or aggregate stop-loss - Implement pooling/captive strategy for catastrophic claims - Introduce a stabilization reserve/fund (explicit contingency)
# Budgeting / governance - Increase PAD (if assumption risk is the driver) or set budget to a chosen percentile (e.g., P75/P90) - Improve forecasting cadence (monthly monitoring, emerging experience triggers)
# Cost and utilization management - Strengthen UM: prior auth, step therapy, site-of-care management - High-cost claimant management: case management, centers of excellence - Network strategies: steerage, reference-based pricing (where appropriate), narrow/high-performance networks - Rx management: formulary optimization, specialty management, biosimilar adoption - Benefit design changes (higher member cost share, deductible/OOP adjustments) if consistent with HR goals

These actions directly reduce either the mean, the variance, or the right-tail of claims—each of which can reduce budget exceedance risk.

If you provide the scenario/probability table from the spreadsheet (even pasted as text), I will compute the numeric answers for 7(c) and evaluate PAD=5% quantitatively against those results.