It is widely recognized that a relatively small segment of a population can drive a significant percentage of overall healthcare expenditures. While some health plan members with minimal healthcare needs may not utilize any healthcare services, there are others who are high utilizers of the health system. Referred to as high-cost claimants, these individuals can accumulate millions of dollars in healthcare expenses each year due to chronic conditions such as cancer, heart disease, blood-borne illnesses, and acute conditions, such as complex childbirths.
A study by the Employee Benefits Research Institute examining the claims of 5.8 million employee-based health policyholders and their dependents from 2013 to 2017 showed that as little as 5% of the group accounted for 56% of the spending.
Many health plans struggle to obtain the necessary data to monitor, predict, and effectively manage high-cost claimants. Employer group clients are seeking solutions to understand how high-cost claimants impact their financial performance. They seek answers to questions such as:
- Which members are likely to become high-cost claimants?
- Which high-cost claimants are likely to remain so?
- How can an employer group gauge whether its high-cost claimants’ costs and trends are reasonable based on norms?
- How much stop-loss coverage is needed?
- Where does spending physically occur? (e.g., inpatient, pharmacy)
- What policies, practices, and interventions can be put in place to mitigate such costs?
- What interventions can prevent an escalation of high-cost claimant costs over time?
Proactively identify high-cost claimants for early intervention
Effectively identifying and managing the high-cost population requires advanced analytics for cost predictions and targeted interventions. By analyzing historical trends in claim costs, health plans can identify individuals consistently incurring higher costs within their respective groups or demographics. This data can then inform the development of strategies to identify high-cost claimants within employer groups, necessitating additional attention in their care management.
Equipped with this information, health plans can assist employers in gaining a deeper understanding of how both chronic and acute conditions impact their workforce. While unexpected health events will occur from time to time and are difficult to predict, chronic conditions lend themselves to further evaluation and analysis. Health plans can leverage this information to devise proactive management strategies that ensure members are getting the right care at the right time and before costs become unmanageable. Early detection of potential health issues, followed by timely treatment, often leads to reduced healthcare expenses.
Comorbidity data unlocks the insights needed to manage high-cost claimant costs
In an era marked by continuing medical innovation and blockbuster drugs, getting a full picture of a member’s medical and pharmacy claims is key. However, an increasing body of analytics research highlights that comorbidities (multiple diseases or medical conditions) are a key predictor of cost trends for high-cost claimants.
Using analytics to develop predictive models, generate insights, and gather actionable data related to medical conditions and comorbidities offers great potential for higher-touch case management. For example, an assigned case manager can coordinate care both in and out of the hospital, provide discharge planning, and assist with adherence to a personalized treatment plan. Additionally, it helps showcase the overall value of a health plan to its employer groups.
Milliman’s data warehouse and analytics platform MedInsight has integrated Chronic Condition Hierarchical Groups (CCHGs) that make it possible to monitor up to six comorbidities, allowing for the identification of trends that go beyond any single primary factor.
Comorbidity rates are rapidly becoming the go-to data for understanding cost trends, both current and future. While it may seem obvious that members with more medical conditions will have higher claims costs, until recently, comorbidity data was not well-understood or effectively utilized in addressing the disproportionate impact of high-cost claimants.
As an example, a health plan may find better high-cost claimant prediction by looking at patients with diabetes and severe depression vs. someone with diabetes only.
Leverage MedInsight’s Employer Group Insights
High-cost claimants can be defined differently for different employer groups. That is why the MedInsight Employer Group Insights (EGI) application is designed to help health plans and their employer customers identify where certain costly, chronic conditions are more prevalent among members. With EGI, users can gain a comprehensive view of data and service type details and find answers to what’s driving spend. These findings enable health plans to work closely with their customers on well-thought-out plan designs that offer comprehensive health care coverage without compromising the quality of care (e.g., eliminating out-of-network coverage for specific services like dialysis).
In addition to benefiting from decades of actuarial expertise from Milliman, MedInsight analytic groupers can also provide insight into the diagnoses that indicate the likelihood of someone becoming a high-cost claimant.
Customized data for customized high-cost claimant solutions
EGI offers tailored reporting that can be calibrated to align with different definitions of high-cost claimants. This allows it to capture the specific information that health plans and employers need to identify strategies for managing high-cost claimant expenses, both at the systemic and individual level.
EGI assists health plans in several key ways:
- Identifies members who have exceeded specific healthcare spending thresholds, such as $50,000 or $100,000. This feature can be used to help determine the appropriate level of stop-loss coverage.
- Reveals the number of high-cost claimants who are new to the plan, offering insights into changing membership dynamics.
- Distinguishes between high-cost claimants who are recurring, aiding in the identification of persistent high-cost members and to reveal information about their cost drivers.
- Provides information about the employer’s current and future risk profile, including projections for the next year’s high-cost claimants and common high-cost claimant conditions.
- Quantifies out-of-network costs (referred to as leakage), shedding light on cost management opportunities.
- Assesses the extent and impact of comorbidities, helping to understand how multiple conditions contribute to healthcare costs.
By utilizing data that can offer insights into questions such as, “What factors will predominantly influence high-cost claimant risks in the future?” healthcare plans can empower their employer groups with a sense of control, predictability, and confidence regarding their healthcare expenses.
Your analytics partner for managing high-cost claimant cost
Employer groups aim for a workforce that is both healthy and productive. With access to the appropriate data and reporting through MedInsight EGI, health plans can more effectively create a well-considered, ongoing strategy for cost management. This involves cutting down on unnecessary expenses while concentrating on crucial areas, such as making targeted investments to enhance the health outcomes of high-cost claimants. This approach not only diminishes overall risk but also reduces costs.
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