Open enrollment is upon us and for the majority of employers, that means offering employees a high deductible health plan. It is also the time of year when benefits professionals are most likely to remind employees to shop around when using their health care and invite them to engage with a price transparency tool. And yet if you focus solely on these strategies, you may be missing a monumental opportunity to curb your health care spending while also improving your employees’ health.
The bulk of employer health care spending on an annual basis is driven by the care provided to a handful of very high cost employees, like the employee with multiple chronic conditions or the employee with recurrent cancer. A new report out from the American Health Policy Institute and Leavitt Partners documents that among 26 large employers, 1.2 percent of employees are high cost claimants who comprise 31 percent of total health care spending. High deductible health plans do nothing to contain costs for these employees who quickly meet their deductible. Benefits professionals need a multi-pronged strategy to improve care and contain costs for this special population.
Many employers have already deployed one common strategy designed especially for employees with multiple chronic conditions: wellness. But the jury is still out on the ROI of engaging the sick to exercise and eat better. To understand how we can save dollars while improving care, we need to take a closer look at the five critical points in an employee’s health care journey where costs can jump suddenly and dramatically. Then we can better understand the strategies and tools benefits professionals have at their disposal to intervene during these critical moments.
First off, we need to make sure patients have the right diagnosis. If we treat a patient who has the wrong diagnosis, we are throwing money down the drain, at best. At worst, the wrong diagnosis can be fatal. The problem of misdiagnosis is a lot more common than you may realize. One in 20 patients, almost 12 million Americans, is misdiagnosed each year. No wonder the IOM tells us that $750 billion —or 33 percent of annual health care spending — is wasted on unnecessary services annually. One obvious benefits strategy to address this is the use of second opinion services, which are growing in popularity among large employers. According to Willis Towers Watson, one quarter of employers plan to tie reimbursement to second opinion services by 2018.
Once we have a correct diagnosis for the employee, we need to make sure they are getting the right care at the right time at the right place. This has huge potential for savings. Getting the right care isn’t as easy as it sounds in a health care world where almost half of patients fail to get recommended care, according to a landmark RAND study.
The second step is making sure the employee is seeing a high quality physician, one who practices evidence-based medicine. High quality providers cost less in the long term because they are less likely to prescribe unneeded services, such as imaging, and more likely to follow evidence based guidelines. In its report Better Care at Lower Costs: The Path to Continuously Learning Health Care in America, the IOM noted that more than 30 percent of health care costs could be avoided as a result of improving quality and efficiency. Benefits professionals can help employees get to high quality physicians using a variety of strategies, including narrow networks, steerage, and centers of excellence.
Sometimes, the right care is actually a less invasive and less expensive procedure. For example, consider the case of an employee with lower back pain contemplating spinal fusion surgery. The long-term outcomes from such a surgery may not be worthwhile when physical therapy and other interventions may work better. Decision support tools and services can help employees understand the risks and rewards of various types of procedures and choose the care path that is right for their health condition and lifestyle. These can be a very valuable tool in the benefit professional’s toolbox.
If the patient wants to move forward with a more invasive procedure or surgery, getting them to the right place is the next step. Surgical volume remains one of the best proxies we have to measure care quality. So when that employee is considering a total hip replacement, we want to get him to the physician and hospital that has performed thousands of the same procedures. Again, relying on a strategy like using a center of excellence gives employers a leg up here. Some employers, like Kroger and Walmart, will even pay for employees to travel to centers of excellence, because their return on investment is so powerful.
And after the surgery or intervention, when recovery begins, we need to make sure the patient and his or her family/caregiver are getting the longitudinal support they need. This is the piece of the care journey that is frequently overlooked and in some ways is the most important. For example, a recent Carnegie Mellon/Blue Shield study found that providing intensive case management — including home visits — reduces costs by more than $18,000 per patient for very sick patients dealing with cancer.
Telehealth can be another useful strategy to help recovering employees check in frequently with their care providers. And many organizations offer medical ally services to provide ongoing telephonic support.
On a final note, benefits professionals shouldn’t ignore the role that benefit design can play in helping contain costs and improve quality for the highest cost employees. Several of the employers my organization works with have seen phenomenal engagement using incentives and even penalties. For example, an employee considering back surgery receives a $400 incentive for talking through her condition and treatment options with an expert. Sometimes that means the employee, once fully informed, will elect not to have back surgery, which may indeed not be the best course of treatment given her medical issues and lifestyle. One large employer saved $5.6 million after switching to a penalty; employees had to engage in surgical decision support or pay $1,000. Not only did the program cause employees to make smarter decisions, it also gained very high employee satisfaction scores.
High deductible health plans have their place in a benefits professional’s toolbox, but they can’t be our only tool if we really want to reduce spending and improve care quality, especially for our sickest employees. Fortunately, there are a number of other strategies and tools available to help contain costs and improve care for the sickest and most expensive employees.