Decreasing Healthcare Costs While Improving Care with Data Analytics
Target Audience: C-Level and other executives, including CFOs and Chief HR Officers, responsible for decreasing the organization's healthcare costs while improving the care that its employees receive.
Why is this Topic Important? The cost of healthcare is much more than just the claims, the healthcare value equation requires measuring the claims along with the productivity costs of the employees being off work and the outcomes of the care, both of which live in the HR records. The self-insured employer is the only one that possesses all of the components required to measure high value healthcare: the claims, the productivity costs of the employees being off work, and the outcomes. Analyzing this data permits the self-insured employer to rank the doctors and other providers in its network based on total costs (claims plus productivity costs) and the outcomes of the care, and then steer the employees and other plan participants away from the low value providers and towards the high value ones. By sending employees to the top doctors, the employer pays less overall, the employees get the best care, and they get back to work faster.
Description: An educational presentation on how self-insured employers can use cutting-edge advanced data analytics to decrease the costs of their healthcare plans and workers’ comp programs, while improving the care that their employees receive, and getting them back to work faster.
Healthcare costs are much more than just the claims, as the productivity costs of an employee being off work can be several times the claims costs. And analyzing those claims and productivity costs is still only half the healthcare value equation. Value is what you get compared to what you spend. The employer “spend” is the claims and productivity costs. What the employer “gets” is the outcome of the care, hopefully the employee returning to work at full capacity as quickly as possible.
Only the self-insured employer possesses all the information required to determine the high value doctors and other providers in its network, and then steer its employees and other plan participants to the high value doctors and away from the low value ones. Specifically, the self-insured employer owns the claims that it pays, as well as the HR records where the productivity costs and the outcomes of the medical care live.
Using advanced analytics, the employer can group the claims related to various diagnostic and chronic conditions together, and then juxtapose those claims dates against the HR records to determine the related productivity costs and outcomes. After risk-adjusting those costs, the employer can then calculate the average cost per diagnostic or chronic condition for each doctor and other provider in the network, and then rank them from best to worst. For example, what is the average risk adjusted overall cost for each surgeon in the network when performing back surgery? What is the annual cost for each primary care physician when caring for a diabetic?
Employers then have multiple tools to encourage their employees to go to the top ranked doctors. First, the employer can set up an online portal that the employees can use and educate them about it‒because if you have a heart condition or a sick child, who wouldn’t want to go to the top ranked doctor?
The portal can be as simple as the employee typing in their illness or injury, whether it’s a bad back or migraine headaches, and then the portal ranking all of the providers in the network that handle that problem, from best to worst. Employers can also make the portal available to the primary care physicians in their network so that they can use it when referring patients to specialists, where high claims and productivity cost flourish. If the employer has a gatekeeper plan the employees may be required to go to the specialist that the gatekeeper recommends. Finally, if the employer has a HDHP with HSAs the employer can even pay the employee to go to the top ranked doctor by contributing to the HSA.
In the workers’ comp world, the employer may be able to establish the panel of providers that the employees see and can just remove the low value doctors from it, creating immediate and significant savings.
By sending employees to the top doctors, the employer’s claims costs should go down because 30% of healthcare claims are due to poor or ineffective care and high value doctors squeeze out those excess costs, the employer’s productivity costs should go down because high value doctors return their patients to work faster, and the employees get the best care.
Scott Roloff is IntegerHealth's President, and he also serves on its Board. Scott is both a CPA and a lawyer, as well as a Certified Management Accountant (CMA), Certified Internal Auditor (CIA), and Chartered Global Management Accountant (CGMA). Prior to joining IntegerHealth as one of its co-founders, he was the CFO or the General Counsel for companies in the healthcare, software and telecom industries. During this time he also led a wireless technology start-up in the Caribbean for tourists who were otherwise unable to use their cell phones while on vacation. Prior to going into industry, Scott was a Corporate Partner at the international law firm of Akin Gump Strauss Hauer & Feld where he focused on M&A, SEC and general corporate matters. Scott uniquely blends financial, legal and operational experience. He holds a BBA in Accounting from the University of Wisconsin‒Whitewater, an MBA from the University of Texas at Arlington, and a J.D. from Southern Methodist University (SMU), where he was the valedictorian of his law school class.
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