Tag: benefits

Analytics For Employers: A Tutorial (Part 2)

Healthcare

A succinct guide on how to use analytics to save money on healthcare.

Over the past 3 years, the most common question we have heard from employers and brokers is this: health analytics is good, but what do we do with the dataWell, we are going to answer that question in this very post. That’s right, we’re sharing all the most actionable areas we look at for self-insured employers to help them to gain control over their spending. Some may say that we’re giving away our secrets, but we don’t see it that way. Our mission for employers is to make them savvy health care consumers, so making information transparent is what we do. Furthermore, it’s important to open up conversations on how organizations are using analytic data, because these conversations will help to advance insight and foresight so employers can use their data to create, track and refine a long-term strategy for the benefits they offer.

In Part 1 of this post we established that for employers, the best strategy for using health analytics moves beyond simply looking at spending to enter the realm of strategic benefit planning. This is the limitation of traditional healthcare analytics. Over the next decade, we will continue to see employers move away from watching spending go up and down and move towards looking at data in a way that provides both insight and foresight into population health. The next evolution of employer analytics informs a deeper understanding of who associates are, the benefits that will attract the best talent, and identifying the optimal strategy for funding these next-generation benefits packages.

To start, we pulled together a list of areas that any employer can explore if they want to ensure they’re using data to guide their spending decisions on health benefits. We’ve broken this into 3 sections: 1) Goals, 2) What’s Actionable? and 3) Areas of Insight.

Beginning with the end in mind, here are the top goals that self-insured employers have when it comes to monitoring their health spending:

Goals:

1.      To cut excess and wasteful healthcare spending and to accurately project future spending. Approximately 20% of an employer’s healthcare spending is wasted due to unnecessary and preventable costs. Open access to data helps to inform employers on exactly what areas are driving wasteful spending and how to better predict future spending.

2.      Identify strategies to support associates on their health journeys. While 5% of people drive 51% of health costs, 50% of plan members account for only 3% of health spending. Understanding how to support the unique, complex health needs of members affects a company’s bottom line in both healthcare costs and employee productivity.

3.      Track progress on the current healthcare and wellbeing strategy. An unbiased evaluation of a healthcare program is eye-opening. Not only does it guide the strategic evolution of an employer’s healthcare strategy, it may reveal opportunities to recoup hefty vendor performance guarantees.

4.      Make sure members are getting the preventative medical attention they need. We consistently see that between 10%-20% of members never see a doctor. It’s within this group of people who are notdriving costs today where an employer’s greatest future healthcare risks can lie.

In order to meet these goals, an organization needs to identify what exactly can be actionable. It’s easy to spot the costs that stick out, but when is it too late to intervene on a cost-driver? Here are the most common areas where employers can focus to influence spending, care quality, preventative care, and effectiveness of condition management.

What Is Actionable?

·        The plan’s pharmacy formulary (with some limitations based on the PBM partner).

·        The plan’s rules surrounding specialty medications.

·        The healthcare partners the employer selects (health plan, PBM, condition management services, smoking cessation, behavioral health services, direct primary care, centers of excellence).

·        Plan contributions, deductibles and coinsurance paid by employees for their healthcare benefit, emergency room surcharges, spousal surcharges, smoker surcharges, stop loss arrangements.

·        Cost variation among high cost and/or high volume services (MRIs, musculoskeletal surgeries, cancer care, etc).

·        Effectiveness of member education on health benefits.

·        Targeted wellbeing services offered to members.

Now that we’ve laid out the goals of using data and the areas that are actionable, here are some specific questions to answer when looking at the data.

Areas of insight.

1.      Which conditions and medications represent the largest population health risks? How do these conditions vary by both dollars spent and number of people affected?

2.      Can amending prescription drug policies surrounding step therapy, specialty drugs, generics, place of service/purchase lead to savings for members?

3.      Does the member base have a problem with emergency room (ER) misuse and are certain locations or member categories driving ER costs?

4.      Do changes in member risk score, medication adherence and prevalent disease states such as diabetes show that your investments in condition management, smoking cessation and wellbeing interventions are working? Could performance guarantee fees be recovered from vendors?

5.      Are there trends noticeable related to members who are not engaging with physicians at all? Through looking at healthcare utilization among work location, salary bands, plan types—can we identify trends as to why certain people are not using necessary health services? These barriers to accessing care could be cost, lack of understanding of benefits, and even corporate culture, among others.

6.      What percentage of people are receiving preventative care and age-appropriate screenings among various member demographics?

7.      What are the largest cost variances that can be actionable? For example, could costs associated with procedures such as joint and hip replacement surgery or even MRIs be standardized via options that are available to your members? (Could centers of excellence be leveraged?)

8.      Could a direct primary care model have benefit for the member population?

9.      Are there actionable insights with respect to absence data and workers compensation claims?

10.  What is the size and scope (in dollars and members) of opioid use and dependency-related costs?

In the same way that reading an abstract is not the same as reading the book, please keep in mind that this is a very brief overview of a complex subject.* Every employer has unique challenges related to population health and health spending, so there’s is no real “one size fits all” approach. The data drives the discussion in a unique direction for each employer.

* * *

About BetaXAnalytics:

We combine data science with clinical, pharmacy and wellness expertise to guide employers and providers into a data deep-dive that is more comprehensive than any data platform on the market today. BetaXAnalytics uses the power of their health data “for good” to improve the cost and quality of health care. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

* A Note on Data Privacy The purpose of using health analytics is to identify actionable areas to target costs and to improve effectiveness of care options on an aggregate level. This is done by looking at trends in data and under no circumstances should insights be presented to an employer in a way where data is individually identifiable. There are a number of data-related best practices that we recommend to remain adherent to privacy laws. Any employer, broker or consultant who is using health analytics should do so under strict adherence to HIPAA regulations and under the advisement of an experienced data privacy attorney.

Share this via:

Analytics For Employers: A Tutorial (Part 1)

DataHealthcare

It’s been almost 3 years since we started BetaXAnalytics with the goal of using data science to offer strategic guidance to employers and providers on healthcare spending and services. Since opening our doors, we’ve spent a lot of time talking with companies who pay for healthcare for their employees, as well as the brokers and consultants who help to guide these decisions. At the same time, we’ve spent time taking a look at many of the analytic tools that are on the market right now—these are the technology platforms that provide spending transparency to employers and their brokers.

From day 1 when we started these customer interviews, one resounding theme was apparent. The biggest question we heard from employers and their brokers is simply this: Having data is good…but what do you do with it?

3 years later, this is still the most common question we hear. We see this recurring question from employers and their brokers as a symptom of the early-stage maturity of the employer health analytics market. In short, over the past decade as more self-insured employers use health data to help to manage their spending, we haven’t moved too far from the starting line.

Anyone who is familiar with the general progression of analytics will recognize the analytic maturity model below.

At its most basic level, health care analytics is often pigeonholed into “counting things.” Counting dollars, counting medications, counting members…and watching these numbers go up and down. So every time we get the question, “What do you do with the data?” this just reaffirms that most employers are still in the dark with respect to using data to drive their benefits strategy. This type of “analytics” examines only the past and gives very little insight into the 4 critical areas of focus as a healthcare purchaser (which we explain in Part 2 of this post).

After seeing many of the analytic tools on the market today, we can confidently assert that that the market for using health analytics to control employer healthcare spending is here:


Having data is good…but what do you do with it? This recurring question is a symptom of the low analytic maturity of the current state of employer health analytics—that is to say, we pay for access to data, but it’s rarely actionable. “Analytics” in this stage is synonymous with “counting” and data is hindsight-focused on reporting what has already happened.

The current state of employer analytics is a good start, but it barely scratches the surface of the strategic potential of analytics. Tracking spending is important, but true analytics go far beyond just spending to understand insights into your population health, designing and tracking programs to target conditions and support mental health, and even to provide insight into how well benefits are being communicated to employees. When we move past hindsight analytics to incorporate insight and foresight, we move past counting things, and to the realm of strategic benefit planning. This means developing a deeper understanding of who associates are, the benefits that will attract the best talent, and identifying the optimal strategy for funding these next-generation benefits packages. As with so many initiatives that fall under the Human Resources / Human Capital umbrella—including talent acquisition and retention, compensation, healthcare, engagement, benefits, wellbeing—the most strategic analytics should consider all of these areas. This is the future of analytics—and the future is here.

About BetaXAnalytics:

We combine data science with clinical, pharmacy and wellness expertise to guide employers and providers into a data deep-dive that is more comprehensive than any data platform on the market today. BetaXAnalytics uses the power of their health data “for good” to improve the cost and quality of health care. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

Share this via:

Healthcare’s Next Disruptors: Employers

Healthcare

The cost of healthcare in the United States is rapidly rising with no end in sight, and this cost problem is hitting the American worker’s pocket in a more profound way than ever in history. Healthcare in the U.S. is now at 18% of US GDP at a cost of over $10,000 per person annually. To put this into perspective, healthcare costs in 1960 were 5% of U.S. GDP ($170/person). 

Here’s what not everyone knows: on the other side of this problem of rising healthcare costs are pockets of people effecting serious change—these people are employers.

Forward thinking employers and the HR leaders responsible for making their healthcare decisions are thinking outside of the box to find health care models that are more effective at keeping employees healthy. These are people who are rejecting the traditional benefits model of disjointed, piecemeal solutions. Instead, these employers are using data to form a comprehensive strategy to ensure their healthcare dollars are keeping members healthy.

Consider the following developments in 2018 alone as an indication of the trends we’re seeing in the employer market:

  • Solution Scale: Amazon, Berkshire Hathaway and JPMorgan Chase announced in early 2018 their formation of a healthcare alliance to tackle finding more effective care models for their combined employee base of 1.2 million people.
  • Accountability: The National Drug Purchasing Coalition (NDPC), whose members include employers like PepsiCo and ExxonMobil, has partnered with Express Scripts to form a fully-transparent model where the NDPC pays what Express Scripts pays for prescription drugs. In turn, Express Scripts will administer a pay-for-performance clinical care model that shifts the financial risk previously borne by employers onto the prescription drug plan administrator.
  • Emphasis on Health Outcomes: GM announced a deal with the Detroit-based hospital system Henry Ford Health System for a direct contracting healthcare model for its 24,000 employees and family members
  • Using Data to Guide Health Strategy: Morgan Stanley recently announced that they have created a chief medical officer role to oversee their use of HR data and analytics. Said Morgan Stanley’s Chief Human Resources Officer Jeff Brodsky, “Harnessing our HR data, we can achieve better wellness for our employees and address rising healthcare costs.”
  • Making Healthcare Easier for Employees: Amazon and Apple have joined the 30% of employers that offer onsite medical clinics for employees and their families.

If your company is looking to help to effect change in this healthcare revolution, here are a few ways to start:

1.     Shift financial risk. Seek partners who are willing to step outside of the traditional fee-for-service healthcare models that currently put the highest financial risk on the employer (and in turn, employees). Instead, shift financial risk to care providers and other partners who directly impact health outcomes. Direct primary care is a great example of this type of accountable care model. 

2.     Gain data transparency. Get access to timely and ongoing data to drive your healthcare benefit decisions. It is easy to get inundated by mountains of complex data and trying to aggregate it with location and other benefits data, so we recommend that employers assign a strategic data subject matter expert to drive the discussion. This is what the team at BetaXAnalytics does—as data scientists with clinical, pharmacy and wellness expertise, our deep-dive into employer data is more comprehensive than any data platform on the market today.

3.     Remove barriers. Think about ways to remove the barriers that prevent employees and their families from getting the care that they need—the financial barriers, the time constraints and convenience barriers. Onsite clinics and telemedicine are just a couple of examples of strategies to make healthcare convenient and inexpensive for employees.

“Employers taking healthcare into their own hands is the most meaningful way we can change healthcare in this country”


~Bret Jackson, president of The Economic Alliance for Michigan, a member of the National Alliance of Healthcare Purchaser Coalitions

This week we presented at the Strategic HR Conference at Mount Washington to Chief Human Resource Officers and HR leaders throughout the Northeast to share best practices on how HR leaders can use data to drive their health and benefits strategy in a way that maximizes their healthcare budget. If you’re interested in learning more, email me.

Who pays for healthcare in the U.S.? We all do. By way of taxes and out of pocket premiums, we all contribute to these costs that flow largely through the government and employers. And the more informed the people are who are paying for healthcare become, the more we can effect change.

* * *

About BetaXAnalytics:

If you’re an employer who feels there’s got to be a better way to control health care costs, you’re on to something. And we can help. BetaXAnalytics partners with employers to use the power of their health data “for good” to improve the cost and quality of their health care. By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, to save health dollars and to better target health interventions to keep employees well. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

Share this via:

Employers Are Using an Innovative Way to Soften the Financial Burden of High Deductible Health Plans

Healthcare

As a healthcare data technology company, the most common question we hear from employers is, “how can we lower our healthcare spending?” The high cost of healthcare has a significant impact on employer expenses. The Milliman Medical Index projects that in 2018 the average premium for a family of four is $28,166. While the magnitude of health costs is a reality for our employer clients, finding an effective way to manage these high costs is often their first priority.

When we drill down into cost-drivers, we consistently see a startling theme across employers—that only 5% of people are driving 51% of healthcare spending. A very small group of people with chronic conditions (such as diabetes, rheumatoid arthritis, or cancer) are contributing to half of the total health spending. While this disproportionate spending is a reality within employer populations, according to the Kaiser Family Foundation Medical Expenditure Panel Survey, this also holds true for Americans as a whole.

As a way to manage the rising cost of healthcare, nearly 40% of adults are covered by what is known as a high-deductible health plan. Under this model, employees share in a greater share of their health expenses, responsible for on average $5,248 of out of pocket medical costs each year. The thinking behind this way of cost-sharing with employees is that when employees are responsible for paying a greater share of their health expenses, that they will become better healthcare consumers by shopping for the best prices and avoiding unnecessary procedures. 

Unfortunately, in many of these cases the high out-of-pocket medical costs cause financial hardship on many people. A survey from the Kaiser Family Health Foundation found that 1/3 of adults have trouble paying their medical bills, and 73% have cut back on spending on food, clothing or basic household items to pay their medical bills. The Report on the Economic Well-Being of U.S. Households, an annual survey conducted by the Federal Reserve Board, found that 44 percent of adult Americans claim they would not have $400 in case of an emergency without turning to credit cards, family and friends, or selling their own possessions. When those who are financially strapped have mounting healthcare bills, the consequences can be personally devastating. A 2015 poll by the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health found that 26 percent of those who took part in the survey claimed medical bills caused severe damage to their household’s financial wellbeing.

Because the impact of high healthcare deductibles causes such a financial hardship for individuals and their families, many recent studies have shown that this type of health plan causes individuals to delay necessary healthcare. Researchers from UC Berkeley and Harvard studied the results of a large employer’s choice to offer a high deductible plan over 2 years. Instead of finding evidence to support the theory that high-deductible plans make people take more charge of their health spending, they found no evidence to show that employees were comparing costs or cutting unnecessary services once they had a high healthcare deductible. They cut low-value health services at the same rate as they were cutting important medical services, causing the employer to question whether members were making the right choices for their long term health. Additional studies have found that the danger of high deductible health plans is that their members with the highest health risks have shown that they avoid necessary care and medications due to cost. 

On the other side of the phenomenon that 5% of people drive 51% of health costs, we see another theme that is equally surprising—half of plan members contribute to only 3% of total health spending. That’s right—a large proportion of costs come from a small number of people, yet a large number of people contribute very little to overall costs. Why is this? 

At BetaXAnalytics, when we look at employer utilization of health services we consistently find that between 10%-20% of members never see their doctor. These are the employees who either feel they simply “don’t have time” to see the doctor or “don’t have the money” to spend into their annual deductible. But it’s within this group of people who are not driving costs today where an employer’s greatest healthcare risks can lie. 

The answer for employers? Make it as easy as possible for members to get the care they need. One effective way to ensure that people aren’t avoiding necessary care is to remove the traditional financial and convenience barriers that prevent employees from seeing the doctor. Hooray Health provides a template for employers to solve this problem. They afford first dollar coverage for preventative, basic and urgent care visits with $0 deductibles, and $25 copays for all in-network visits. Their innovative network consists of over 2,400 retail clinics and urgent care centers across the country with extended hours and no appointments necessary. They also provide access to telemedicine visits via phone 24-hours a day, 7 days a week at no cost which makes getting necessary care quick and easy, even when work and family schedules make it difficult to go into a doctor’s office. Their app-based tools and live medical concierge are available 24/7 make finding care easy and convenient. As an added benefit to address employee concerns about prescription costs, Hooray Health offers a prescription discount card to ensure employees that they are receiving competitive prices for their medications.

Hooray Health removes financial and convenience barriers that prevent people from getting the care they need by making access to necessary care easy, convenient, and free for employees. This type of solution is particularly useful for employers with high deductible health plans where high out of pocket costs may deter employees and their families from seeking the necessary care that they need. While solutions like these remove barriers to care, they also save employers money by providing an affordable alternative to many of the care services needed by their members. Providing easy-to-use concierge-based access to a network of retail clinics, urgent care centers and telemedicine doctors ensures that employee health won’t neglect their health due to lack of money or lack of time. You can learn more by contacting them at info@hoorayhealthcare.com

* * *

About BetaXAnalytics:

If you’re an employer who feels there’s got to be a better way to control health care costs, you’re on to something. And we can help. BetaXAnalytics partners with employers to use the power of their health data “for good” to improve the cost and quality of their health care. By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, to save health dollars and to better target health interventions to keep employees well. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

About Hooray Health:

Since its founding in 2017, Hooray Health has been committed to disrupting the health insurance industry by providing employers, individuals and their families with the assurance that their basic healthcare needs are covered. Here at Hooray Health, we believe that healthcare should be simple, honest, and affordable, that’s why whether you apply online or over the phone, the process is always simple, and acceptance is guaranteed. Partnered with over 2,300 urgent care and retail clinics, and a 24/7 medical concierge team, Hooray Health members know that no matter where they are or what time it is, their healthcare is there for them. Starting plans have a low monthly cost with no annual deductible, an affordable copay, and no surprise balance bills. Every day, Hooray Health is smashing the industry norms and bringing healthcare to all.

Share this via:
Image credit: iStockPhoto

Forget Flashy Technology: Here Are 3 Data and Analytics Best Practices Any Company Can Use Right Now

Data

The ability to take data—to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it—that’s going to be a hugely important skill in the next decades.


~Dr. Hal Varian, Chief Economist at Google

Practically everyone is talking about using data and analytics to succeed today in business, but surprisingly companies are only deriving a fraction of the value that’s available to them in their data when they’re making decisions. The reasons for this vary across organizations, but often times it comes down to budget constraints, talent constraints, or lack of recognition from leadership that analytics will help their business to run better. During an interview in 2009, Google’s Chief Economist Dr. Hal R.Varian predicted, “The ability to take data—to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it—that’s going to be a hugely important skill in the next decades.” 

Let’s take a look at some of the highest-performing companies out there today. Over the past 5 years, there have been 13 companies that have managed to outperform the S&P 500 each year. And when you take a look at this elite group—which includes companies such as Facebook, Amazon, and Google—you find that the majority of these businesses are algorithmically-driven. These companies take in data constantly, and use this data in real time to update the user-experience. In their 2012 feature on big data, Andrew McAfee and Erik Brynjolfsson shared findings from their research that “companies in the top third of their industry in the use of data-driven decision making were, on average, 5% more productive and 6% more profitable than their competitors.” It is hard to deny that success in our respective businesses is not a function of how well we make use of the data available to us. 

So how does Human Resources (HR) fit in to this picture? HR may not be the first group that you think of when considering who should have a strategy around using data. However, HR has the weighty responsibility of managing the top expenses of a company—salaries, healthcare, and benefits. The 2018 Milliman Medical Index estimates that the cost of healthcare for a family of 4 this year will be upwards of $28,166. Yet approximately 20% of employer-sponsored health care spending is wasted each year due to unnecessary or preventable costs across the continuum of care. The rise of high deductible health plans mean that decisions made within HR on health plans and benefits are decisions that weigh heavily on their employees pocketbooks as well.  When we look at HR through the expense-management lens, we see that HR carries the company’s fiduciary responsibility to manage these expenses not just for the bottom line of the employer, but also for the sake of their employees’ wallets.

We often see companies who make the decision to start using data and analytics immediately start shopping for a tool to make use of their data. While this step may be right for some companies, there are a few foundational analytics best-practices that we recommend companies have in place before making any analytic technology investments.

1.      Understand the quality of your data. One of the biggest mistakes we see companies make is that they assume that just because a report comes from I.T. or from a vendor, that the data is correct. However, very rarely is the data captured by a company in “ready-to-use” form. IBM estimates that poor data quality cost American companies $3.1 trillion in 2016 alone. A recent study of 75 executives who assessed their own organizations data quality found that only 3% of their companies’ data met basic quality standards. Furthermore, understanding data quality is a fundamental issue within organizations, executives are more informed to understand how data quality affects their vendor partners as well. Every bit of data that we review is a piece of a much larger picture, and understanding the limitations of the quality of your company’s data helps to make a more accurate assessment of its insights.

2.      Develop your data strategy. Take a step back from day to day operations to decide how to data can help to inform your decisions. This affects what metrics you’re looking at, and how often you’re receiving it. Many companies are surprised to find that the process of developing a data strategy often means reducing the amount of reports people are looking at. A common assumption is that the more data we’re looking at, the better off we are. In reality, when decision-makers are inundated with extraneous reports, they may miss valuable messages that they need to see. What goals is your division working towards? Which pieces of data most closely track progress to these goals? The best way to guide a strategic process for looking at data aligns your business goals with a limited number of key metrics to indicate when changes are needed to reset course. 

3.      Identify a data “expert” on your team. Given the issues that exist in every organization with data quality, it is valuable to identify someone who is intimately aware of the source and limitations of the data your company assesses. This person can answer questions on why particular data might be wrong, if duplicate records are skewing the data, or how outliers are affecting results. Your data expert can help to tell the story of your organization’s data to better frame what actions are needed to meet your operating goals.

Using data to make better business decisions does not need to be cost-prohibitive. Before investing in any data and analytics tools, implement these best practices to lay the groundwork for a sound approach to using the data you already have. They can be used by any company, regardless of size or budget. And the best part is, you can start to use these best practices today.

* * *

Bob Selle has led culture change and organizational design for America’s most recognized retailers. He is currently the Chief Human Resource Officer for the northeast’s premier close-out store Ocean State Job Lot, leading a transformation that has named them a Forbes Best Midsize Employer two years in a row.

Shannon Shallcross is a data expert who believes that data interpretation holds the key to solving healthcare’s toughest challenges. As the co-founder and CEO of BetaXAnalytics, her company uses the power of data “for good” to improve the cost, transparency and quality of healthcare for employers.

See Bob and Shannon at the Strategic HR Mt. Washington Conference on October 29th, 2018 during their plenary session, Metrics That Matter: Let Numbers Tell a Story.

Share this via:

Medications that Don’t Work and Costs that Vary by 865%: Here’s What We Found Hiding in 1 Employer’s Healthcare Spending

Healthcare

Approximately $2 billion of employer-sponsored health care spending is wasted each year due to unnecessary or preventable costs across the continuum of care. This is approximately 20% of total health spending by employers each year, according to the American Health Policy Institute

Wasteful spending was a concern that one of our clients was facing when we met them. Their healthcare spending was increasing year over year in line with the healthcare industry trend, which is right now at +6% to +7% each year. Like most employers, a small group of people was driving a large percentage of their healthcare costs. And as, year over year, they were footing the gargantuan bill for their employees and their families, they were left with some very reasonable questions:

“Is the money we’re investing in our wellness program even making people healthier?”

“Is our diabetes-management program working?”

And, quite literally, the million dollar question…

“Where can we save on our healthcare costs?”

This employer partnered with us because of our team’s background in healthcare and wellness data science, as well as our team’s experience in advising large employers on their health spending strategy. We studied several years of their health and pharmacy data and we looked at this data by member status (employees, spouses, children) and by work location (corporate office, field offices, distribution center). We brought in absence data and we looked at the smoking status for each member. Here’s just a sampling of some of the highlights we found:

Diabetes is a major cost driver, but it could be costing less. Diabetes test strips, which were one of their top prescription drug cost-drivers, have costs that can vary by brand by up to 865%. The high cost variability of these test strips is not necessarily correlated to their quality. On one hand, an employer wants to make it as easy as possible for employees to access the diabetic supplies they need. However, without controls around this spending this could be a source of health spending leakage.

Members are not being driven to cost-effective medications. Pharmacy costs for diabetes medications were increasing year over year while medication adherence was decreasing. That right…the employer was paying more for less pills. What we found was that fewer people were taking their medications (adherence was decreasing). And of those who were taking their medications, they were being driven to the “preferred” brand of medication, but this brand was not the cheapest. This explains why they were paying more for less pills. This is also an indication that their medication formulary needs to be revised. 

An expensive method to quit smoking was not working. A costly and well-marketed medication to quit smoking was costing in excess of $63,000. When we examined adherence, very few of the people who took this medication completed treatment. This was most likely due to the medication’s unpleasant side effects. In fact, of the 58 people who started taking this medication, only 3 completed the recommended round of treatment. Clinical evidence indicates that 1 in 2 patients completing this therapy will quit smoking. This means that it cost this company $63,000 for 1 or 2 people to quit smoking. This expensive (and, in this case, ineffective) medication was on the plan’s preferred drug list. If the pharmacy plan had step therapy in place, people looking to quit smoking would be directed to use effective, yet less expensive medications before moving to more costly medications.

The Emergency Room is a cost-driver, while very few members use Urgent Care. Emergency Room visits were on average 4 times more costly than visits to Urgent Care. Not only were very few members ever using Urgent Care, there was a long list of Emergency Room “frequent flyers.” This informs the employer’s communication strategy on educating their members on the purpose of Urgent Care, as well as how to identify when a trip to the Emergency Room is necessary.

Employers typically have two goals when it comes to paying for employee healthcare: they want to support employees in improving their health, and they want to control costs. As a former veteran of the corporate wellness industry, I will be the first person to tell you that lots of companies will promise to make employees healthy and to save them money. Very few will actually deliver. This is because employers want a partner who will help them to control health costs, not just to deliver a program. 

Unfortunately, there’s no magic wand an employer can wave to suddenly reverse everyone’s chronic diseases. But there are many opportunities to ensure condition management programs have a positive return on investment. Furthermore, there are subtle clues hiding in their data that can show them areas where they are losing money where they shouldn’t. These are the many little holes where there’s healthcare spending leakage. It is our job is to find these holes for employers.

The good news for any employer looking to reduce wasteful health spending is that the insights we find are actionable. In this example, what we uncovered in this data is now being used by this employer to save money. Their Chief Human Resource Officer deserves enormous credit for not accepting the status quo with respect to their healthcare spending. He is among a growing number of HR professionals who understand that with the high cost of healthcare comes a responsibility to closely manage these costs. Their data drives a holistic strategy around health and wellbeing services that aligns with the strategy of the business. We are proud to partner with them to provide the actionable transparency they need to achieve their wellbeing goals.

* * *

BetaXAnalytics is a healthcare data consulting firm that helps employers to cut their healthcare spending through proven strategies to contain costs. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

Share this via:

Will Amazon’s Joint Healthcare Venture Make You Smile?

Healthcare

Amazon has revolutionized so many aspects of our lives, and now the big question is: will they revolutionize healthcare? It seemed that way, given their joint announcement on January 30th with Berkshire Hathaway and JPMorgan Chase, claiming they were teaming up to form a healthcare company “free from profit-making incentives and constraints.” While the intended goal of this joint venture is “to improve U.S. employee satisfaction while reducing overall costs,” Jamie Dimon of JPMorgan Chase explained, “the three of our companies have extraordinary resources, and our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans.” This announcement sent shockwaves throughout the market, as the stocks for major insurers and healthcare companies went tumbling. Market analysts began waging their predictions for what this new company would look like—Alexa for employee benefits? Diagnostic wearable technology? What could it be? To calm the fears of JPMorgan Chase’s clients, company representatives tempered the message, explaining that the initiative can be compared to a group purchasing organization, similar to the type of setup used by hospitals to buy supplies, so the 3 companies could leverage better deals for their employees.

Whoa, Nellie.

OK, maybe we all got a bit ahead of ourselves. Warren Buffet, who compared healthcare’s skyrocketing costs to a “hungry tapeworm on the American economy” admitted that the three companies do “not come to this problem with answers.” But he resolutely stated that they did not need to accept the current state of healthcare. Bezos went on to say, “hard as it might be, reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort.” These companies bring serious purchasing power to the healthcare market.  Amazon, JPMorgan Chase and Berkshire Hathaway have a combined market cap of $1.62 trillion, and between all 3 companies there are 1.2 million employees. Last year, JPMorgan alone spent $1.25 billion on medical benefits for U.S. employees where the medical plan covers almost 300,000 individuals, including employees and their family members.

What will this healthcare partnership most likely look like?

While we can’t predict what this solution will evolve to become over time, JPMorgan disclosed a crucial piece of information following the joint venture announcement—that the initiative can be compared to “a group purchasing organization.” The overall goal of this initiative is to cut healthcare costs and to improve employee satisfaction. So the best way we can understand what this joint venture solution will be is to look at the current state of employee healthcare for these companies.

Hint: follow the money

Taking a look at who is currently making a profit off of Amazon, Berkshire Hathaway and JPMorgan Chase’s healthcare benefits is a good place to start when we’re asking ourselves what this new healthcare company will look like. 

A 30-second tutorial on health benefits

But it’s useful to take a 30 second detour for anyone unfamiliar with the employer healthcare market to understand where these companies are coming from. These days, most employers with over 1000 employees “self insure” for their healthcare benefits, meaning they pay health claims for their associates from dollar 1. For large employers, and especially for jumbo employers like Amazon, Berkshire Hathaway and JPMorgan Chase, it’s simply more cost-effective to pay for healthcare in this manner—they tend to not need to pay a health insurance company to take on the financial risk of their “sickest,” most costly employees (i.e. people who require major surgeries or treatments, those requiring costly medications or people with multiple chronic illnesses). Employers like this work with a health insurance company (for instance, United Healthcare, Aetna, Blue Cross) to perform the administrative functions of paying providers and settling claims. Either the health insurance company or a pharmacy benefits manager will handle the pharmacy side of employee healthcare claims.

Large employers such as these 3 have been using innovative tactics to control healthcare costs for years. From using healthcare analytics to strategically manage wasteful spending to moving health clinics right into their corporate offices, large employers historically have been ahead of the game with managing healthcare spending. After all, it’s Warren Buffet who notoriously said, “GM is a health and benefits company with an auto company attached,” understanding that because healthcare is the first or second highest company expense, that portion of the “business” must be managed as strategically as any other business unit.

Mission critical: cut out middleman expenses, cut down on employee healthcare headaches

So back to the original question of, “who profits from Amazon, Berkshire Hathaway and JPMorgan Chase’s healthcare spending today?” Here’s a sampling of the likely suspects who are middlemen in the game of keeping employees and their families healthy:

1.      Health insurer(s) (United Healthcare, Aetna), who charge an administrative fee for settling medical claims

2.      Clinical condition managers (often employed by the health insurer) who help to coordinate care for employees with chronic conditions such as diabetes, cancer, heart conditions

3.      Wellness service companies such as Limeaid or Virgin Pulse, who administer health-related educational programming, employee health screenings, incentive programs to encourage employees to see their doctor and stay active, and fitness challenges to encourage physical activity and healthy behaviors

4.      Pharmacy benefits managers or related pharmacy services, such as Optum or CVS who take care of prescription drug claims and/or cost-management

5.      Surgery cost-bundling vendors who negotiate with medical providers to receive more competitive, bundled rates on surgeries and costly medical tests

6.      Health analytics companies such as Truven (IBM) or Medeanalytics who use health and pharmacy data from employee claims to help with strategic healthcare cost management

7.      Telemedicine vendors who offer the availability of doctors via phone for employees who need to discuss a health concern, but cannot see a doctor in person (or cannot wait for an appointment)

8.      Health advocates and/or health “concierges” that exist to help employees navigate the confusion of the health system to better understand services that are in and out of network, applicable deductibles and coinsurance

9.      Employee benefits platforms that exist so employees can understand the specifics of all benefits available to them, including health insurance and pharmacy coverage, and employee health savings accounts

10.  Benefits brokers and consultants who help to manage the coordination of all these programs and manage vendors

Understanding that the goal is to cut healthcare costs, it’s this list of middlemen who may be on the chopping block, as their services may potentially be replaced by this new joint venture. For instance, these 3 companies may form a non-profit company to handle settling their employee claims (the job which is currently done by the health plan). Similar to many health insurance companies, managing chronic diseases, managing pharmacy claims and offering wellness services could be companion services offered by this new venture. Only these services would likely be more effective than those of a health insurer because the company would solely exist to keep employees healthy—not to make money. And since profit would not be the motive, access to healthcare analytics to enable strategic management of costs and population health would be more transparent, truly existing for the benefit of Amazon, JPMorgan and Berkshire Hathaway. There are many possible solutions that will save healthcare dollars and improve employee satisfaction for these companies, but the most likely solution will incorporate some form of replacement of some or all of these 10 services that employers use to provide healthcare coverage, to manage healthcare costs, or to help employees to better leverage healthcare services for better health outcomes.

So will this forward-thinking trifecta hack healthcare to solve the problem of rising costs for the rest of the country? Perhaps in time. But the more significant message in this bold move is that Amazon, JPMorgan and Berkshire Hathaway have taken a public stand to say that they will not accept the status quo of healthcare in the United States. The rising costs, the confusion of employees trying to navigate the tangled healthcare maze, and the overall lack of improvement in employee health can no longer be accepted as the norm. And as this solution begins to take shape, it will send ripples through the healthcare space, as a new expectation takes priority in employer-sponsored healthcare—getting healthcare shouldn’t be so difficult, it shouldn’t cost so much, and healthcare should be making people healthier. Now there’s a change that will bring a smile. 

* * *

BetaXAnalytics is a healthcare data consulting firm that helps employers to cut their healthcare spending through proven strategies to contain costs. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

Share this via:

My Top 4 Strategies for Saving Money on Employer-Sponsored Healthcare

Healthcare

If you think understanding your own hospital bill is confusing, imagine scrutinizing a bill for 18,000 people. How do companies know if they’re being overcharged for healthcare services? Are people receiving care that is actually effective? Why are some medications so expensive? As an employer, this is a challenge that is all too real. 

Many companies want to offer competitive benefits, but the high cost of healthcare adds real challenge (and cost) to this goal. A great quote from Warren Buffett wraps up the employer/healthcare conundrum in a bow:

GM is a health and benefits company with an auto company attached.  -Warren Buffett

Employers who purchase health insurance for their employees are paying one of the most significant portions of our total healthcare “bill” in the U.S.–$640 billion each year to be specific. It’s unfortunate that we’re in this place where the cost of healthcare has risen so sharply over the past decade that healthcare is now often an employer’s 2nd highest expense, right after salaries. Shouldn’t this expense be managed with the same rigor as any other part of the business? 

If you ask a traditional broker how to manage costs as an employer, you may get a list of strategies that don’t actually lower healthcare spending, but rather they change who is paying for it. Here’s an example of exactly what this looks like. The 2016 Society of Human Resource Management (SHRM) Survey  lists the following strategies as the most successful in controlling health care costs:

  • Offering consumer-directed health plans (e.g., health reimbursement arrangements, health savings accounts).
  • Creating an organizational culture that promotes health and wellness.
  • Offering a variety of preferred provider organization (PPO) plans, including those with high and low deductibles and co-pays.
  • Increasing the employee share contributed to the total costs of health care.
  • Offering a health maintenance organization (HMO) health plan.
  • Providing incentives or rewards related to health and wellness.
  • Placing limits on, or increasing cost-sharing for, spousal health care coverage.
  • Increasing the employee share contributed to the cost of brand name prescription drugs. 

These strategies absolutely hit the goal of impacting an employer’s bottom line, but this often happens at the expense of employees. Noticeably missing from these strategies is anything that actually gets at the high source cost of services. But what actually lowers the underlying cost of healthcare?

Instead of these mainstream strategies that are often-cited as the go-to methods for employers to “save money,” here are just some of my top high-value strategies that target cost-management without putting more financial burden on employees:

1.      Explore new funding models. Small and mid-sized employers who are fully-insured pay higher operational costs since the health plan takes on more financial risk. However, hybrid plans of self-insurance provide lower costs while incorporating stop-loss coverage and predictable, level payments so that even small and mid-sized employers can self-insure.

2.      Change the healthcare delivery model. Employers can use high performance networks that have a limited number of quality health care providers. Because the cost of health services can vary wildly between different providers and these price differences are not correlated to the quality of care, using narrow networks helps to ensure that you’re getting the best value for your money—great care at a fair price. The benefit of exploring new healthcare delivery models is lower premiums, lower out of pocket costs, or a combination of both.

3.      Use new payment models. This solution includes care that is pay-for-performance such as partnering with Accountable Care Organizations (ACOs). The advantage of moving away from traditional payment models is that we move away from “fee-for-service” (the doctor gets paid more for seeing you more often) and towards outcomes-based payments (providers get paid for curing you, regardless of how many times they see you). The National Business Group on Health’s 2018 Health Care Strategy and Plan Design Surveyindicated that 21% of employers plan to promote ACOs in 2018 but that number could double by 2020 as another 26% are considering offering them. Other payment models include using “centers of excellence” for high-cost procedures. This enables the employer to ensure that associates are receiving the best care and the best price under payment agreements that are bundled into one comprehensive cost. 

4.      Proactively manage pharmacy costs. Partnering with an organization to keep pharmaceutical drug costs in check can hold a great deal of value for an employer’s bottom line. A big part of the management of pharmaceutical costs involves developing a strategy around specialty medications. This includes looking at specialty drug spending trends among members, how drugs are being used, cost differences in where they’re administered (hospital vs. provider), coordinating benefits between the medical and prescription plans, and implementing step therapy to ensure that options for less-expensive similar medications are used before jumping to the most expensive prescription. In addition, reviewing and revising formularies can make a large impact on costs with very minimal impact on members.

Are you cost-saving, or cost-shuffling?

Just how any other business unit in a company manages to their budget, managing health spending and strategy is a necessary part of ensuring that the high cost of health services are kept in check. This can be done by shuffling who is paying for healthcare, or it can be done by going after the source of what’s driving the costs. If I can share one takeaway here, it’s that employers have options with respect to saving health dollars. In the coming years we will see more and more employers moving away from simple “cost-shuffling” of health dollars and getting strategic about managing healthcare’s underlying high cost.

* * *

BetaXAnalytics partners with employers to use the power of their health data “for good” to improve the cost and quality of their health care. By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, to save health dollars and to better target health interventions to keep employees well. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

Share this via:

Dear Employer: High Deductible Health Plans are Making People Sick

Healthcare

We get it. Healthcare is expensive and costs are going up every year.  Medication costs are skyrocketing. For some chronic conditions, a year of treatment with a specialty drug can exceed $100,000. American companies are shouldering the burden of a healthcare system where ½ of what we spend in healthcare is considered “wasteful”. Healthcare is now the 2nd highest business expense for most companies, second only to salaries. And because most employers pay their health claims at dollar 1, regardless of what their business does, by default all companies end up in the business of healthcare. And something’s gotta give.

Why do employers bear the burden of the inefficiency of the US healthcare system? In US healthcare we spend twice as much per capita with health outcomes that rank among the worst in the world. So the growing trend for employers to deal with crippling health care costs is to find others to share in this cost. Why not hold employees more accountable? After all, employees’ personal health choices and behavior make up37% of health costs. Employers tell their employees “let’s solve this together. We will support you.”

So very well-meaning companies offer “high deductible health plans” to employees. On the surface, it’s a win-win. The thought behind these plans is that if employees have to contribute more to their healthcare costs, they will take more responsibility for their health. In theory, employees will take better care of themselves so they can stay healthy. They will avoid unnecessary medical procedures, since they are responsible for paying for costs under their deductible. Employees will start to compare costs of medications and procedures to make sure they’re keeping their health expenses as low as possible. And so with average out-of-pocket costs for individual employees at $5,248, the rationale is that overall health costs for both the employer and the employee will go down since employees start to understand the value of their health, and they become smarter consumers of health care.

From an employer perspective, this sounds like a brilliant plan to control costs. But does this idea to transform Americans into savvy health consumers actually happen once a company starts expecting employees to pay a higher share of health costs?

Nope. 

As we track the results, there is evidence that raising employees’ out-of-pocket costs for healthcare does NOT increase consumerism, and it also has led to people not taking necessary medications and delaying care for chronic conditions, which leads to more serious health events (and costs) later on down the road.

Employers save money in the short term…but at what cost?

Researchers from UC Berkeley and Harvard studied the results of a large employer’s choice to offer a high deductible plan over 2 years. But instead of finding evidence to support the theory that high-deductible plans make people take more charge of their health spending, they found some surprising trends. Yes, employees spent 12% less on their healthcare, so in the short term these plans achieved their goal of lowering health costs. But these “savings” were from avoiding care of EVERY type. There was no evidence to show that employees were comparing costs or cutting unnecessary services once they had a high healthcare deductible. They went to the same doctors. And they cut low-value health services at the same rate as they were cutting important medical services, causing the employer to question whether members were making the right choices for their long term health.

Yes, But What if Preventative Services are Free?

The common response from employers with high deductible plans is to make sure necessary and preventative health services come at little to no cost to employees. But a recent study from California found that despite these efforts, 1 in 5 people still avoided preventative care citing cost as the reason. In fact, most high deductible health plan members surveyed did not know that their preventative screenings and important care was available with little or no out-of-pocket payments.  Additional studies show that high deductible health plans have the most adverse impact on those with chronic conditions, people with mental health disorders, and low-income individuals and families.  The danger of high deductible health plans is that their members with the highest health risks have shown that they avoid necessary care and medications. And this trend is one of many symptoms of the crippling cost of healthcare in America. 

Employers: we know you did not ask for the job of footing $640 billion of our healthcare bill in the U.S. It’s ridiculous, we know. But we just want to make sure you know high deductible health plans are a band-aid—not a solution. 

Signed, Hardworking Americans

* * *

If you’re an employer who feels there’s got to be a better way to control health care costs, you’re on to something. And we can help. BetaXAnalytics partners with employers to use the power of their health data “for good” to improve the cost and quality of their health care. By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, to save health dollars and to better target health interventions to keep employees well. For more insights on using data to drive healthcare, pharmacy and wellbeing decisions, follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

Share this via:

3 Simple Ways Companies Can Help Employees with Addiction

Healthcare

After struggling with pain from severe headaches, Michele Zumwalt turned to her doctor for help. He prescribed Demerol to manage the pain. But soon after starting treatment, Michele noticed that she started having headaches if she didn’t have her medication. Over the next several years, what started as a way to manage chronic pain turned into a full-blown addiction to painkillers. Working in corporate sales, she recounted putting on entire presentations for clients and not even remembering the conversations. What’s more, her clients did not notice her silent addiction. Now sober for over 12 years, Zumwalt wrote of her experience in a book about recovery called Ruby Shoes.

In 2017, what was once a problem that we thought was far from our homes and offices now affects our families, our coworkers, and our communities. Drug overdose is now the leading cause of accidental death in the U.S., according to the Department of Health and Human Services. Since 2000, the rate of opioid overdose deaths has more than doubled, and the cost of inpatient hospitalizations due to overdose since 2002 has nearly quadrupled. And because of the highly addictive nature of painkillers, addiction has no prejudice. It affects people from all walks of life, including seniors, celebrities, teens, professionals and newborns.

For too long we’ve viewed drug addiction through the lens of criminal justice. The most important thing to do is reduce demand. And the only way to do that is to provide treatment — to see it as a public health problem and not a criminal problem. ~President Barak Obama

Opioid addiction is an epidemic, and it touches the workplace with the same pervasive force. Opioid abuse costs employers approximately $12 billion annually. A 2016 study by Castlight Health found that 1 out of every 3 opioid prescriptions covered by employers is abused, and that painkiller abusers cost employers nearly twice as much ($19,450) in medical expenses on average annually as non-abusers. Opioid addiction is rarely discussed in the workplace, and those affected tend to be very good at hiding their addiction. But there are some simple steps employers can take to help to address opioid use and dependence.

1. Understand the impact. A look into a company’s own health data is the first step is to understanding how exactly opioid use affects their employees. Understanding how painkillers are being prescribed, when opiates result in emergency treatment and the correlation to absences and workers compensation claims helps to quantify the problem for a company. Understanding the scope of the issue informs decisions on a written drug-use policy, whether to do employee drug testing and what drugs to test, how to educate managers and staff, and how to best provide resources to help employees and their families.

2. Reduce the stigma. Most employees struggling with addiction are doing so in silence. They may fear losing their job, and they have developed all sorts of strategies to hide their addiction from their families, friends and coworkers. Employers can play a key role in leading the charge to normalize the discussion on addiction. By helping to lead the conversation in educating employees on opioid use and addiction resources, they can help break the barriers that prevent people from recognizing dependence and seeking treatment.

3. Open access to treatment resources. When companies understand how addiction is impacting their employees and their health costs, they are well-positioned to match member needs with necessary addiction treatment services. These companies may find that they need tools beyond the traditional employee assistance program, as they open access to treatment centers and other helpful tools to support people through recovery. By making data-driven decisions, opening access to resources, and communicating with members, companies can further remove the barriers that keep people from seeking treatment.

It’s hard to believe that Nancy Reagan’s “Just Say No” campaign for the War on Drugs began over 30 years ago. In those days, we imagined the detectable dangers of drugs as dealers hanging out on playgrounds, giving out drugs to kids like candy. But today in 2017, the danger that faces 20.5 million Americans is much harder to recognize. Many addictions aren’t born on street corners; they start in the doctor’s office. And whether an employer chooses to address the epidemic or not, they have co-workers who wake up and face a life driven by addiction every day. Isn’t it time we as employers become part of the solution?

* * *

About BetaXAnalytics:

BetaXAnalytics uses “data for good” to improve the cost and quality of health care for employers. By combining PhD-level expertise with the latest technology, they help employers to become savvy health consumers, saving health dollars and better targeting health interventions to keep employees well.

Follow BetaXAnalytics on Twitter @betaxanalytics, Facebook @bxanalytics and LinkedIn at BetaXAnalytics.

Share this via:
  • 1
  • 2

@SRShallcross on Twitter

Sunday, September 15th, 2019 at 6:38am
Front Row “blankets” today at the riphilharmonic concert! Well done, fjnoyav and musicians! @ Slater Park https://t.co/cVD4vG9CSC
Friday, September 13th, 2019 at 9:21am
Proud to be part of recognizing the work of some very special nonprofits who help to improve the physical and mental wellbeing of Rhode Islanders, made possible by the grants from the CharterCARE Foundation.
@CCF_FDTN
@ChildrensFriend @AdoptionRI @BradleyHospital @sojournerri https://t.co/zYStM4HNva
SRShallcross photo

Recent Comments