Medical management: Strategies for employers to manage health insurance cost

Posted in: Employee Benefits

A New England Journal of Medicine study found that health care in the United States is only 54 percent efficient for chronic, emergent, and preventive care. Such inefficiencies are just one example of why Americans continue to pay more for health care than people in other wealthy, Western countries. Medical management can be an effective solution to this issue.

What is medical management and how can it help? 

Because health care is expensive, health insurance is expensive. That expense is realized both as a unit cost (each person pays more for an individual service) and a utilization cost (people, overall, use the service more than ever before). As these costs rise, how can you, as an employer, help manage health insurance costs?

One way to introduce efficiency into the system is to manage care, both for individuals and for your entire group. Think of this as having a case manager who can help make sure patients are, for instance, getting the right preventive care. Under the umbrella of medical management, your company’s health plan should include the following three services:

  1. Wellness programs that give your employees incentives (such as a discount on their health insurance premiums) to stay healthy, get appropriate screenings (which, in turn, support early diagnosis), and follow treatment plans.
  2. Disease management (also known as chronic condition management), which focuses on patients with known medical issues and helps them manage those issues, see the right specialist at the right time, get the right medication, and, overall, mitigate the negative health effects of the condition. This, in turn, can dramatically reduce your health insurance costs. A patient who doesn’t manage their condition and ends up in the ER costs a lot more, for example, than one who sticks to the treatment plan and stays comparatively healthy. This is an area where a patient whose health care should cost just $5,000 a year can easily end up costing $60,000 a year without proper management.
  3. Case management is a more intensive level of advocacy, and is reserved for patients who have undergone an acute major clinical episode, such as having cancer, heart attack, stroke, or exacerbation of any chronic disease, resulting in lengthy hospital stays or complex treatment, which likely lead to large insurance claims. The Case Manager assists in planning, coordination, monitoring, and evaluation of medical services for a patient with emphasis on quality of care, continuity of services, and cost-effectiveness.

Typically, all three of these services are already provided by your insurance carrier. But, as a business owner and/or executive, you should ask yourself:

  • Are you satisfied with how your carrier is delivering these services?
  • How are they performing, in terms of money saved?
  • Are the management services reaching a lot of your people, or just a few?
  • How many people should those services be reaching?

Medical management − staffed by clinicians and registered nurses, supported by robust, action-oriented data analytics − can have a meaningful impact on your health insurance cost and bottom line. When delivered as a part of a brokerage service (rather than managed by a carrier), medical management can be more effective, more efficient, and more targeted to your specific population. You may consider partnering with a benefits broker that assigns a team of experts to your business, which has a vested interest in helping you accomplish your organization’s health and financial goals.

When my team and I are talking to our clients, we always emphasize that the best health care is almost always the least expensive. We ensure patients are getting the right care from the right provider, in the right setting, at the right time and price, which results in the best health outcomes at lowest cost.

What does that mean in the real world? It means identifying patients who should be getting routine screenings, and following up to make sure they do. Early screenings can lead to early diagnosis, which can lead to simpler, more effective, less expensive treatments. It also means looking at the data, and following up with insurance carriers to make sure they’re providing services that have already been identified as necessary for specific patients. It means making sure patients have access to their electronic health records, so they can carry that information with them easily when seeing various specialists.

The simple fact is that without good medical management, people will bounce around the health care system, racking up health care costs in a process that’s inefficient to begin with. Medical management is about fixing that, controlling costs for employers, and improving outcomes for the insured. It’s about identifying high-risk employees and reducing the overall number of claims on a company’s plan. With brokerage services such as those PSA provides, it’s about streamlining a medical management process that’s already in place.

health insurance cost managementTo learn more about the most and least effective strategies for containing healthcare costs, download our white paper, “What Works in Healthcare Cost Containment,” or contact me at adavis@psafinancial.com.

 

 

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