An effective way for employers to cut health care costs is to combat health care spend on the highest-cost cases on their plan. Benefit advisers can demonstrate value to current and potential employer clients with strategies to identify these cases and decrease the burden of their medical costs
High-cost employees account for about 25% of all medical and pharmacy costs, according to a claims analysis by Healthentic, a health analytics company based in Seattle. On average, employers paid $113,379 in medical and pharmacy expenses for each high-cost person, compared with just $2,751 for everyone else.
The fact that employers can save more than $110,000 by preventing just one high-cost member is pretty eye-opening and shows why its so important for organizations to understand their populations health and how it impacts their bottom line, says Sean Gallivan, chief operating officer of Healthentic.
What can employers and benefit brokers do about the high-cost cases? Prevention through case management, disease management and wellness programs is key.
The employers should first look at their plan design to encourage the right behaviors, put in effective case management, as well as disease management. If youre chasing the high cost cases, its too late, Gallivan noted.
Another important strategy is to know your employee demographics, since certain conditions are correlated to age, gender and other demographic categories. For example, a companys demographics might suggest that it should emphasize disease management programs for diabetes or heart disease.
Find out if you have a high number of women of child bearing age, if you have a large number of older men. You dont need predictive analysis to put in disease management, Gallivan said.
Employers also can boost prevention by promoting cancer screenings, health risk assessments and biometric screenings.
Greg Howe, wellness manager of Lincoln, Neb.-based Lincoln Industries, says data on high-cost cases helps us better understand our population health risks and empowers us to make more informed decisions on where to spend our time and resources."
Brokers can bring this idea to the table. This high-cost case analysis is a great way for brokers to differentiate [themselves]. If they can identify these potential risks, employers will sit up and take note of that, Gallivan said.
The top three conditions associated with the high-cost category, according to Healthentic, were cancer, chronic kidney disease and complicated births.
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