For most employers, employee benefits are the second largest expense. Some estimates suggest that, on average, 5% of an employee population accounts for 50% of an employer’s healthcare expenses. That means it is imperative companies understand the data fueling those costs and how to mitigate them.
Increasingly, employers are using available tools and technology to help them learn more about the health and risk profile of their employee population. For the past 17 years, the Kaiser Family Foundation and the Health Research & Educational Trust have conducted an annual survey of private and nonfederal public employers with three or more workers. The 2013 – 2015 Employer Health Benefits Surveys found that roughly 50% of large employers (200+ employees) offer or require health-risk assessments and biometric screenings. Employers use health-risk assessments – questionnaires that ask employees about medical history, health status and lifestyle – and biometric screenings – body weight, cholesterol and blood pressure – to identify employee risk factors and create opportunities for earlier, less costly interventions.
The advanced analytics now available to employers integrate all sources of employee health data – medical, pharmacy, dental and vision claims as well as health-risk assessments and clinical data from biometric screenings, lab tests, wearable devices and electronic health records – to create a comprehensive, 360-view of individual employees. They can also use the data to group employees into risk cohorts, such as prediabetics and others eligible for disease management programs. The information is displayed in intuitive dashboards that allow employers to drill down for increasingly precise information.
To get a better sense of how benefits staff can use an advanced analytics platform to improve the quality and cost of employee healthcare, let’s look at the experience of a representative large employer and its benefits manager, Susan Lee. Like most large employers, this one self-funds its benefits, which include medical, pharmacy, dental and vision plans for 15,643 employees, spouses and dependents. Every three years, this employer conducts a thorough process to determine health and financial needs and choose vendors that can cost effectively meet those needs. The employer’s broker, in collaboration with Susan, manages this bid process, helping to tailor plans, choose the right vendors, negotiate contracts and serve as an advocate and adviser in dealing with the companies throughout the contract periods.
Susan works collaboratively with the broker and greatly values his counsel in terms of selecting and managing vendors. The insights he brings to their monthly meetings help her better understand the context for trends in health status and cost for her employees. Yet, Susan knows she needs the immediate access to actionable information provided by the company’s analytics platform to meet the cost and quality goals established by the company’s chief financial officer.
Immediately after logging in to the company’s advanced analytics solution, Susan views the ‘Population Measures’ for her employees and dependents. She checks this information at least once a week and more often during periods of high healthcare utilization like flu season. Her weekly and sometimes daily check-ins give her timely insight and allow her to take mitigating actions, often before the monthly and quarterly reports from her broker arrive.
These population measures display segments of the population in various ways that allow Susan to easily drill down and dig deeper. The population measures show:
· Total members of the employer group are 15,463
· 10 individuals are currently in the hospital
· 9 were discharged from the hospital in the past 10 days
· 110 are considered ‘high cost’, and
· Nearly 50% have not been seen by their primary care provider in the past 12 months
Emergency department costs
From past experience, Susan knows emergency department use is expensive and often preventable. Within a minute of logging in, she sees that her ED costs are higher than the norm. She wants to learn more so she views a rolling 12-month trend of the cost information and sees that her ED costs have consistently exceeded the norm.
There are two reasons that her ED costs are consistently higher: either her employees are using the ED more than peer employer groups or her costs per 1,000 claims are higher. Susan uses the analytics platform to quickly determine that her employees’ utilization is less than the norm and it is, in fact, claims that are fueling her high costs. Armed with this information, she works with her broker and medical plans to direct employees to more affordable places of care.
Disease management participation
According to the Kaiser Family Foundation and the Health Research & Educational Trust 2015 Employer Health Benefits Survey, 68% of large employers offer disease management programs to improve the health and reduce the costs of employees with chronic conditions. Susan’s employer not only offers disease management programs, but is one of the nearly 25% of companies with 5,000 or more workers that offers a financial incentive to participating employees.
Susan uses the program summary report within her analytics platform to view all of the disease management programs available to her employees and dependents as well as the engagement rate and the members eligible to enroll in a program. By digging deeper into the diabetes disease management program, she learns there are 206 members eligible to enroll but only 30% are participating, meaning 144 members are eligible but not participating. A quick drill-down reveals that most of these 144 members do not have a valid phone number in the system. Susan resolves to work with her HR colleagues to gather up-to-date contact information and ultimately determine if valid phone numbers will increase participation rates in the company’s disease management programs.
Employers like the one Susan works for continue to benefit greatly from their partnerships with brokers. Coupled with advanced analytics and insights, they can more readily meet their cost and quality goals. Having access to timely and actionable information enables them to work more effectively and collaboratively with their brokers and derive greater value from their medical, pharmacy, dental and vision plans.
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