When it comes to understanding and acting on the drivers of health care costs, the most obvious answers might not be the answers at all.
For example, suppose you are a benefits manager at a large tech company with a young staff. You notice an $8 million jump in health care costs related to lower back pain, and you begin to focus on back surgeries as a likely suspect.
Your next move might be to consider changes to your benefit plan to address it, like expanding your network of quality physicians. However, that wouldn’t have made a dent in the escalating costs because the surge was driven by alternative therapies. Strategies to influence utilization of acupuncturists, not surgeons, was the action plan needed.
According to a 2017 UnitedHealthcare market trend report, 97 percent of employers say managing health care costs is a top concern. But with so many factors affecting costs, how do you focus on the key drivers?
It was only through answering the question by using UnitedHealthcare’s Health Plan Manager analytics system that we could pinpoint over utilization of acupuncturists as the issue.
“The cost of health care is multifactorial, and the set of solutions has to be comprehensive and operate regularly,” said Richard Migliori, MD, executive vice president, medical affairs and chief medical officer of UnitedHealth Group®. “It’s like doing surgery—you don’t just go after the hot item. You have a meticulous and methodological approach to the procedure to make sure you’ve accounted for everything.”
Here are five steps to consider to help make sure you are using a thorough approach to controlling costs:
1. Establish a regular cadence
A critical aspect of tackling cost management can be recognizing where cost opportunities lie. In order to accomplish that, employers should commit to a regular review of data. Dr. Migliori advises, “You cannot spread this out - employers should be asking questions such as, ‘am I timely, and is this detailed enough.’”
2. Predict costs
Among the top cost drivers in a commercial population are often maternity services, musculoskeletal, oncology and costs related to metabolic conditions like diabetes and circulatory disease. By looking at the demographics of the employee population and using predictive analytics, you can structure programs to target groups of patients with certain health concerns who may benefit from early engagement. Then a well-thought out communication plan greatly facilitates success.
For example, pregnant women who enroll and engage in the Maternity Support Program during the first trimester are shown to have lower overall costs than those who don’t. One customer, Target, collaborated with UnitedHealthcare’s Engagement Solutions Team to develop a custom maternity kit to help increase early enrollment and engagement in the program. The kit includes various gifts for baby and mom and is sent to members who enroll in the maternity support program before week 17 of pregnancy. When the member completes the program, they receive a Target gift card. Providing the incentive to enroll early and complete the program has shown a 17 percent increase in employee engagement at Target, and is on track to help lower overall maternal health care costs.1
3. Look behind the surface
When UnitedHealthcare examined the data behind an unexpected increase in emergency room visits for several national clients, a surprising reason surfaced – the emergence of big, stand-alone emergency departments in Florida and Texas. These departments were unattached to a hospital and looked like urgent care centers, but charged fees comparable to a hospital ER.
“Once these data emerge, we have the clinical capability to help employers solve the problem,” said Brenda Bruns, MD, the chief medical officer of National Accounts at UnitedHealthcare.
Further analysis showed many of these stand-alone emergency departments were out-of-network and were strategically placed in areas with a high concentration of insured employees, like call centers. Dr. Bruns’ team of data analysts and clinical experts worked with the employers to help educate members about their own out-of-pocket costs associated with these stand-alone emergency departments and to identify more network urgent care centers for members to consider instead.
4. Consider the impact of emerging treatments
There is a constant stream of new prescription drugs, therapies and surgical procedures available that can have an impact on expenditure. Specialty pharmacy costs in particular are the top driver of rising health care costs for employers.2 For example, when a new therapy for Hepatitis C became available, there was a significant cost impact to employers. We help a disciplined cost manager keep abreast of new emergence in this category of expenses, and to examine and leverage more cost-effective options and strategies to deal with emerging treatments, if available.
5. Help motivate health ownership
At UnitedHealthcare every aspect of the health care plan, from design structure to advocacy, to special programs and initiatives, is engineered to help motivate health ownership among members. The data shows that what is sustainable value for the long term is getting individuals to make the optimal choice at the first opportunity – whether preventive, lifestyle or care treatments.
“Fundamentally, when we look at what drives health care costs, a lot of it can be attributed to our own health choices,” said Jean-François Beaulé, executive vice president, design and innovation at UnitedHealth Group. “Our goal is to design an environment so that we help people become motivated to take action, and provide resources and support in a convenient and helpful manner to support their health journey.”
It is either that people are compelled enough by their own intrinsic motivation to stop smoking, to take care of that back problem, to lose 5 percent of their weight, or that the health plan becomes the experience to help them get there. In both situations, the achievement of health ownership is what will bring value to both the individual and the employer.
For example, a school district was struggling to manage health care costs as their employee population aged and the prevalence of chronic conditions grew. Diabetes accounted for 19 percent of the district’s total medical and pharmacy costs, and 30 percent of costs were associated with coronary artery disease and chronic renal failure. Over a multi-year effort, the client revamped its health care plan with the goal of motivating health ownership, introducing a wellness program, a diabetes health program, onsite screenings and outcomes-based rewards. During that time, the changes saved $63 million and compliance among people with diabetes improved. More importantly, they created a health culture where nearly 3 out of 4 times, people made the optimal choice.3
To learn more about cost management strategies, tools and resources, contact your UnitedHealthcare representative.
Savings for enrolled members are case specific. Results will vary based on client specific demographics and plan design.
1Target Case Study
2Large Employers’ 2017 Health Plan Design Survey, NBGH, August 2016
3Motivating Health Ownership Case Study