Jul 22, 2019

Employers shifting gears on managing health costs

Much of the innovation around managing complex and chronic care has come from the experimental atmosphere found in state health plans like Medicaid. The deep-rooted and complicated needs of people in these programs have birthed many creative strategies to close gaps in care, drive down costs and address social determinants of health. These plan members are often at economic disadvantage, which complicates their medical situations. But make no mistake about it, the costs and challenges of complex and chronic conditions also afflict those who may be economically better off and get their insurance through employers.

Employees also coping with chronic conditions

PwC’s Health Research Institute (HRI) recently released a report on costs and challenges for Americans who get their insurance from their employers:

  • 62% of employees have a chronic or complex chronic disease
  • 32% are obese or extremely obese, up 26% over the prior decade
  • Employees with diabetes are up 28% over a decade
  • Mental illness multiplies the cost of other complex or chronic conditions

High-deductible plans have peaked

As foreshadowed by other research and media reports in the last several years, employers seem to have lost their appetite for further cost-shifting to employees. High-deductible health plans have dampened utilization. That’s a double-edged sword. Employees may have curtailed any unnecessary care, but are also – it appears – skipping some care they really need, setting the stage for more expensive care and worse outcomes later. Some employees remain confused about what’s “free” as preventive services and skip those too, thwarting early detection efforts. Into the mix of this delicate dance between incentives and disincentives is the general dissatisfaction employees have experienced as their deductibles have tripled over a 10-year period. Employers don’t think their employees can handle any more costs, according to the HRI report.

Employers shifting focus to prices

HRI indicates that the era of cost-shifting to employees is over and that employers are turning their attention to prices, especially for medical services and pharmacy. They are investigating or moving to get employees into lower-cost sites of care. Employers are willing to invest in better mental health services and lifestyle coaching for employees that go well beyond traditional employee assistance programs and gym memberships. Employers express interest in helping staff better understand and maximize their benefits.

HRI emphasizes the value of a collaborative approach and encourages payers to focus on value. Payers are uniquely positioned to help employers maximize their spend to address some of the alarming trends in employee health. Those who can integrate clinical and behavioral health, offer a 360-degree view of the member and coordinate care with providers and community resources will be better positioned for success. Payers who can support evidence-based workflows that reflect better outcomes will emerge stronger in the market. Innovative member outreach strategies like remote monitoring, mobile tools, video chat and telemedicine can all be part of a payer’s winning value proposition.

To learn more about the Altruista Health approach, watch our video, The Altruista Difference.