Health

The Impact of High-Cost Claims on Employers

It’s no secret that a comparatively small percentage of employees drive a significant percentage of health plan expenditures. Still, in Mercer’s National Survey of Employer-Sponsored Health Plans, organizations strive to reduce such costs while offering high-quality care and an improved employee experience.

With that in mind, let us look at the impact of high-cost claims on employers.

The Survey

An analysis of claims data from the Mercer FOCUS database – we’re talking 1.6 million employees and an aggregate cost of $8.5 billion – demonstrates the scope of the effect of high-cost claims.

As it turned out, just 6 percent of members produced almost half the claims. Those employees had a high-to-catastrophic sickness burden and their claims averaged more than $45,000 per person.

The next member grouping – 37 percent of members – had a moderate-to-high illness burden and produced 45 percent of claims, averaging some ,500 per individual.

Now look at this: the healthiest 57 percent of claims generated averaged just $840 per employee.

Your Program

Consider whether your healthcare benefits strategy is reaching employees up and down the health continuum. If you can grasp the effect of high-cost claims, using healthcare analytics, you can make sure your cost-management strategy is focused where it will have optimal benefits. The aim is to make sure employees who have the greatest needs get the appropriate care, at the appropriate time, and in the appropriate setting.

Intensive care coordination for plan members who are in the worst condition can make for a better patient experience. What’s more, there’s less chance patients will receive redundant or lower-quality care.

Further, pointing patients to what are called centers of excellence – places of specialized programs with high concentrations of expertise – can result in care that’s of higher quality as well as value. That’s particularly true if payments are bundled or if other provider reimbursement means are established.

What’s more, expert medical opinion programs facilitate second opinions and render it easier for employees to seek counsel concerning therapies.

How to Help Employees Choose a Health Plan

Healthcare certainly is not one-size-fits-all, so it isn’t always simple for your people to choose a healthcare plan. For one thing, employees don’t know what might happen in the next year, and they may not know whether they would be able to handle the costs of an unexpected incident such as a car accident.

With that in mind, employers can, however, help employees make the best decision by doing the following:

  • Offering options. Employees do value meaningful choices. Their presence can lead to meaningful participation.
  • Providing access to user-friendly decision support resources. Such tools not only factor in costs, but they gauge employee preferences. For example, do employees prefer lower payroll contributions over lower out-of-pocket costs? The best way to find out is to ask.
  • Allowing employees to pull coverages together that complement core coverage gaps. When an employee can cover costs if they become injured due to an accident or be diagnosed with a serious disease, they may be more apt to opt for the high-deductible plan you offer.

Now that you can see the impact of high-cost claims on employers, perhaps you now wish to empower your employees to live healthier lives. Well, the leading global healthcare consultant Mercer has the analytics tools and insight-based benefits strategies that you and your people need.

In addition to high-cost claims, Mercer identifies cost drivers including chronic conditions and specialty medications. It also targets specific interventions – outreach and engagement, for instance – and predicts risk for healthcare costs and performance. Then, based on data, Mercer continually monitors and analyzes your situation to define the next steps.

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