Coordinated Health/Care(TM) Saves Participating Employers $1000+ per Employee in 2008
New Business Model Lowers Claims Costs by Reducing Utilization
The
“The continuing track record of the Coordinated Health/Care approach proves that there is another, more effective way to improve healthcare in America,” said
Industry experts analyzing the Coordinated Health/Care(TM) program have recognized its capacity for significantly reducing healthcare expenditures by doing just that. According to
“The right hand very often doesn’t know what the left hand is doing,” Trott explained. “By getting involved and facilitating the flow of information and activities, the Care Coordinators consistently reduce costs.”
Because so few in the industry can do this, many employers instead focus on discounts and cost-shifting to lower current healthcare costs, and disease management and wellness programs to deliver healthier employees who will, theoretically, use less healthcare in the future.
“Over-reliance on discounts and piecemeal wellness programs is ultimately not very effective, and cost-shifting has reached its limit,” said Trott. “While these are legitimate tools, all too often the larger opportunity to reduce or eliminate claims by assisting patients is minimized or even overlooked.”
According to Trott, national studies estimate that up to 33% of all healthcare services are the unnecessary result of duplication and delay in America’s highly fragmented healthcare system.
“The first source of fragmentation,” she said, “is the healthcare process itself – a confusing maze of physicians, specialists, hospitals, home healthcare, payers, etc. At the center is the often-frustrated patient, who doesn’t know where to turn for help or what to do next.
“The second problem is fragmentation within health plans operated by most insurance companies. Patients covered by employer-provided plans often have to deal with the claims payer, an HR department, the provider network, a pharmacy benefit manager, and perhaps disease management and wellness companies. None of these has the capability to view the patient’s full health picture. Instead, these siloed resources see only a sliver of the patient’s information and thus are unable to coordinate overall assistance to help patients with the ‘process’.”
The waste and duplication that results generate vast incremental costs in the industry. As an example, proprietary consumer research conducted by Quantum Health found that patients self-referred to specialists 41% of the time and 61% of those self-referrals were to the wrong specialist, resulting in an average of
Both innovative employers and the healthcare industry are beginning to recognize that resolving this critical situation calls for a new business model based on coordination of care.
Coordinated Health/Care combines plan incentives for use of a Primary Care Physician as a “medical home,” with Patient Advocacy, Wellness, Disease/Chronic Condition Management, and Acute Care Coordination, into a single, cohesive system. All customer service calls are routed through a central staff of Care Coordinators, who use an integrated IT platform to go beyond answering questions to actually coordinating patient care and guiding patients to better health.
“Coordinated Health/Care focuses on intercepting patients when they are ready to change,” said Lewis. Supported by their systems, the Care Coordinators intercept patients when they are “reachable” and “teachable” to guide them to better health within their physician’s plan of care.
The following statistics, based on the actual utilization of Coordinated Health/Care members, show how the healthcare process is made more efficient:
Primary Care Usage +4% Inpatient Admissions -5%
Preventive Screening +4% Inpatient Length of Stay -13%
Specialist Utilization -4% Inpatient Days -17%
ER Usage -12% Outpatient Non-Surgical -6%
In addition, 26% of members who utilized the services of Coordinated Health/Care said that they changed the healthcare services they used due to the education and guidance provided by the Care Coordinators; and 55% stated that they were made more aware of their health status and sources of personal health risks. Annually, Coordinated Health/Care works with 61% of the total population of a participating group, including 98% of those with claims >$10K and 92% of those with chronic conditions.
The financial results are both significant and sustainable. Over the past ten years, Coordinated Health/Care has held claims trend to an average of 4%-5%, against a comparable industry average of 10%-12% (for employer groups that have not cost-shifted or reduced benefits). Fully 60% of participating employers saw a negative trend in the first year. Additionally, 89% of groups that have had Coordinated Health/Care for 3+ years experience an average annual trend below industry trend. CAGR (Compound Annual Growth Rate) for this set of groups averages 4.1% — a translation of 6-7 points per year. The cumulative impact is that approximately one-third of these groups’ claims are 17% below industry trend. All of this is accomplished without cost shifting or changing benefits or networks.
Additionally, 92% of respondents say they are “extremely” or “very” satisfied. Concludes Trott, “The best news of all is that employers can use their health plan to reduce costs while actually helping their employees more.”
Quantum Health, based in
SOURCE Quantum Health, Inc.