As a leader in human resources or benefits, navigating the challenges of rising health costs can often feel like aiming at a moving target. This dynamic is frequently fueled by a handful of high-cost claimants whose extensive medical needs significantly impact the overall expenditure of health plans:
- High-cost claimants are typically defined as the top 1% of members based on total health plan spending
- The threshold to be considered a high-cost claimant surged 15% from 2019 to 2022 – from $78,815 to over $90,929 per individual
- Despite comprising just 1.2% of the member population, these claimants account for 31% of total medical and pharmacy spend among large employers
While it can feel daunting to strike a balance between optimizing employee care and financial stability, the solution lies in a proactive approach powered by data analytics and targeted care coordination. In this article, we'll discuss ways to thoughtfully address and manage high-cost claims.
Gain clarity through data analysis
The first step in understanding the intricacies of the high-cost claimants in your population is gathering and using accurate data analysis. Intelligent, user-friendly analytic solutions can classify claimants by cost thresholds and conditions, illuminating key drivers:
- For example, a recent report found cancer treatment and neonatal intensive care predominating amongst the top 1% of claimants, while conditions needing surgery or specialty drugs drive lower thresholds
- Data can also show cost breakdowns – e.g. facility fees vs. specialty drugs for cancer treatments
- Demographics within categories may reveal affected populations, helping target supportive programs
- Filtering the data can zero on the conditions or individuals that are driving the most cost
Promote preventive care
Armed with intelligence, employers can launch highly-targeted initiatives to mitigate costs proactively, including:
- Preventive screenings to catch disease early
- Wellness coaching
- Chronic condition management programs
- Health education campaigns tailored to identified risks
For instance, since certain cancers account for high costs, increased screening, smoking cessation support, and health lifestyle promotion could reduce the severity of incidences. Controlling risk factors may also prevent conditions needing surgery.
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Employers should also prioritize removing barriers to essential care like therapy and medication for mental health – which often manifests physical symptoms – can forestall crises too.
Leverage the best care channels
When acute intervention is needed, leveraging quality care channels judiciously can improve outcomes. This may mean partnering with value-based Centers of Excellence positioned to deliver results via expertise:
- Navigating treatment alternatives and providing price transparency where options exist can help members select cost-efficient facility/location of care
- Leveraging second opinion services ensure optimal therapeutic planning and next steps
Equally as important, employees should understand how to use the benefits available efficiently to control their costs too.
Adapt offerings dynamically
As new high-cost services emerge, plans need continuous reevaluation to balance access with affordability. This can include formulary changes, Pharmacy Benefit Management (PBM) optimization, Prior Authorization, and Step Therapy. Contracts with vendor partners should support agility too – to pivot initiatives or plans that provide the best value as members' need change or evolve.
Empower your workforce: Strategically tackling high-cost claimants
By adopting an approach that includes predictive analytics, targeted health programs, and comprehensive support services, and proactive program re-evaluation, employers can effectively manage the challenge of high-cost claimants. This strategy not only aids in controlling health care costs but also supports the overall health and wellbeing of the workforce, contributing to a healthier, more productive organizational environment.
With more than 30 years of experience, Janet Young has provided clinical expertise to the development of health care analytics used in provider, payer, employer, and government sectors. Previously, Janet served as a Lead Clinical Scientist at IBM Watson Health, guiding clinical content development related to new models, methods, and analytics using claims, EMR, Health Risk Assessment, and socio-demographic data. Janet joined the Data Science and Methods team at Springbuk in Dec. 2019, and has been responsible for clinical oversight of methods and models.
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