Managing chronic conditions is key to reducing high-cost claims
Plan sponsors may consider a data-driven approach to predict and manage conditions that lead to the most expensive claims.
The top 20% of medical claims account for approximately 85% of all medical costs. For prescription drug costs, the top 20% of claims account for 95% of all prescription drug costs.
This illustrates the importance of understanding the underlying drivers of high-cost claims (HCC) and the potential value of implementing interventions that improve employees’ health, according to Segal’s spotlight on high cost claims.
Although dozens of chronic conditions affect the general population, a small subset are responsible for a disproportionately large amount of illness and death, the report said. Claims history can help identify the risk factors associated with unfavorable outcomes.
For example, plan participants with congestive heart failure are 15.7 times more likely to incur a high-cost claim than the general population. However, less than 1% of the population is diagnosed with this condition.
Plan sponsors may be able to make a bigger impact in claims costs by focusing on preventing disease progression that results in CHF, such as hypertension, coronary artery disease and diabetes. The report found the percentage of medical claims that included one of those chronic conditions increased from 70% in 2019 to 72% in 2023.
Predictive models that use advanced machine learning algorithms have shown promise in reducing risk in the health care system and may be useful in identifying and managing such conditions via workplace benefit plans. Administrative claims data can provide valuable insights into the factors driving risk and such tools can help plan sponsors stratify their populations to focus on those most at risk of adverse events to target for disease management programs.
Related: Proactive strategies to manage rising health costs
Common approaches include offering a comprehensive wellness program that encourages employees to engage with their health and prevent the onset of chronic conditions, said Segal. For those who do develop chronic conditions, plans should have resources in place to help them manage their conditions effectively. This could be anything from a point solution that specializes in certain conditions to providing benefits websites that summarize effective exercises or recipes relevant to each condition.
In addition, plan sponsors can target HCCs by changing how they conduct patient outreach depending on identified cases, implementing proactive claim reviews, promoting preventive cancer screenings and considering a stop-loss policy.