Strategies for Managing Healthcare Cost

Health systems continually work to provide quality of care at the lowest cost. Success comes from the ability to excel at competencies like care management, case management, utilization management and utilization review. These four related competencies share a common goal: providing the appropriate level of care to patients in the most appropriate setting to produce the desired clinical outcome based on patients’ medical condition and needs. When your hospital or health system is able to achieve that goal, what you’re doing is the definition of value. You are producing the best possible outcome at the lowest possible cost as cost is directly tied to utilization of medical services.

Employers are looking for a health system that can identify and manage high-risk employees, use health nurses to help those employees manage their acute- and chronic-care needs, offer lifestyle wellness programs and track and report utilization, costs and outcomes data.

Business Group on Health’s (BGH) latest annual Large Employers’ Health Care Strategy and Plan Design Survey illustrates the need for tighter controls over utilization if you want to control healthcare costs.

They surveyed 122 large employers, representing more than nine million covered lives regarding their 2021 employee benefit strategies in the midst of the pandemic. The employers said they expect employees’ healthcare costs to rise 6.1 percent next year, but they also said they can reduce that to 5.3 percent with effective changes in their health plan benefits design for workers.

45% OF EMPLOYERSsurveyed said their healthcare strategy moving forward is an integral part of their overall workforce strategy.

Whether those changes produce the savings employers expect will depend on employees getting more engaged with their own health. Of the surveyed employers, 45 percent said their healthcare strategy moving forward is an integral part of their overall workforce strategy. That’s up from 36 percent who expressed that same sentiment in 2019. “This is spurred in part by the COVID-19 pandemic, shining a light on the connection between employee health and well-being and overall business performance,” the BGH said.

So what benefits design changes are they planning to make to spend less without reducing the quality of care for their employees? Thirty-one percent cited a more focused strategy on high-cost medical and prescription drug claims as the way forward. In short, care management. It was the third-highest priority cited by the companies after making more virtual care solutions available to employees and expanding employees’ access to mental health services.

Further, most employers said they aren’t waiting to be passive recipients of delivery reforms to act on those changes. Sixty percent said they are implementing virtual and digital care point solutions, navigation and concierge services, or implementing alternative payment and delivery models or both simultaneously to give their employees more control over their own health.  In 2021, 51 percent said they will offer at least one advanced primary care strategy.

For example, starting in 2021:

79%said they intend to provide employees with advocacy tools and services for claims assistance

73%said they intend to provide employees with medical decision support and second-opinion services

58%said they intend to provide employees high-touch health concierge services

Employers are realizing that employee’s engagement in their health is important to reduce costs. Even with the best utilization controls in place next year, employers surveyed by the BGH said they hope their plan design changes can shave less than 1 percent off their projected increase in employee healthcare costs in 2021.

If employers want to do better, they are looking for a health system that can identify and manage high-risk employees, use health nurses to help those employees manage their acute- and chronic-care needs, offer lifestyle wellness programs and track and report utilization, costs and outcomes data.

6 Key Capabilities needed to reduce the projected increase in employee healthcare costs in 2021:

Medical necessity case management to determine the appropriateness of admissions

24/7 utilization review services by certified UR experts and nurses

Clinical decision support tools to guide the appropriate use of services

Clinical documentation support to back up utilization management decisions

Aggressive and effective care management capabilities

Alternative primary care strategies to proactively manage health outcomes

TAKEAWAY

Controlling utilization is one of the most effective ways to control healthcare costs, whether you’re a large employer or a hospital or health system. And no matter which one you are, the most effective way to control utilization is through effective care management.

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