It’s well known that a relatively small percentage of health plan members drive a large percentage of health plan cost. But this analysis of claims data from the Mercer FOCUS database – 1.6 million members and $8.5 billion in aggregate cost – shows just how big the impact of high-cost claims really is. In the graph on the left, the first bar represents plan members, and the second, plan cost. They’re color coded to match the members to the cost they generated in a year. Just 6% of the members, with high-to-catastrophic illness burden, generated nearly half the claims, which averaged over $45, 000 per member. The next 37% of members, with moderate-to-high illness burden, generated 45% of claims, averaging about $6,500 per member. Meanwhile, the healthiest 57% generated claims averaging only $840 per member.
Keeping these numbers in mind, think about whether your program strategy is reaching members all along the health spectrum. Understanding the impact of high-cost claims could help you focus your cost management strategy where it will have the greatest benefit. For the sickest plan members, intensive care coordination can improve patient experience and reduce the likelihood of a patient receiving duplicative or low-value services. Steering patients to centers of excellence can also result in higher- quality and higher-value care – especially if bundled payments or other alternative provider reimbursement methods are in place. Expert medical opinion programs make it easier for employees to seek second opinions and advice about their treatment.
These are some of the steps employers can take right away to get closer to the goal of ensuring that the members with the greatest needs receive the right care, at the right time, in the right setting. Ultimately, the best care is also the most cost-efficient care.
More posts on Key Strategies:
In our 2017 National Survey of Employer-Sponsored Health Plans, we asked employers to rate the importance of strategies they will be using over the next five years to advance the triple aim of lower cost, higher quality, and a better member experience. This post on addressing the growing impact of high-cost claims is part of a series that looks at these six key strategies.
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