It’s easy for me to imagine what keeps human resources and benefits leaders up at night. In my nearly 20 years of working with employers, I know firsthand they are increasingly frustrated by the escalating costs of healthcare, and simultaneous decline in overall health.
I do believe there is reason to be hopeful, but first, I would like to expand on the problem.
To cite a few statistics, Kaiser Family Foundation research shows premiums for employer-sponsored health insurance increased 203 percent between 1999 and 2015, and the average annual family premium rose to $18,142 in 2016.
The increase in health spending mirrors a decrease in overall health:
- Obesity: In 1990, obese adults made up less than 15 percent of the population in most states. Today, 38 percent of adults are obese and another third are overweight.
- Diabetes: Nearly 50 percent of adults have diabetes or pre-diabetes, according to a 2015 study published in the Journal of American Medical Association. The Centers for Disease Control and Prevention (CDC) reports 21.9 million Americans had a diabetes diagnosis in 2014, up from 6.21 million in 1990.
- High Blood Pressure: About 75 million adults, one in three, have high blood pressure, and another third have prehypertension, putting them at significant risk for heart disease and strokes.
Nevertheless, I am encouraged and believe employers should be too.
As you may know, Willis Towers Watson conducts an annual survey to evaluate best practices of high-performing companies and identify strategies they are using to flatten cost trends. For the first time in 2015, the firm was able to draw information from claims data to more specifically determine the net effect of specific strategies.
Willis Towers Watson found the best-performing companies are using claims information to inform decisions, develop strategies based on that claims data, and specifically measure the impact of their programs. As compared to the national average, the best
performers employ these strategies anywhere from 5 to 15 percent more often.
For these strategies, best performers, on average, pay more than $2,000 less per employee for healthcare and maintain a two-year average cost trend that is 2.6 percent lower than other organizations. These savings are in aggregate, but the use of claims data to inform strategies is a critical component of the success of the best-performing companies.
These best performers understand the importance of marrying clinical information and claims, and likely advanced analytics too. Increasingly, their peer human resources and benefit leaders know this as well.
Geneia recently collaborated with the National Alliance of Healthcare Purchaser Coalitions (formerly the National Business Coalition on Health) to survey employers about their understanding and use of data and analytics to manage the quality and costs of employee healthcare.
Advanced analytics are widely understood to have an important impact on decision making, and human resources and benefits administrators express great interest in having these tools:
- 97 percent agree and 85 percent strongly agree that now more than ever it is essential that HR and benefits practitioners have tools to evaluate data and make informed decisions
- 95 percent are interested in having access to the information that advanced analytics can provide – and the intensity of interest is even higher for those already accessing data, and
- 83 percent agree that using advanced analytics help understand how employees use services, who the high risk are, and how to effectively intervene – and that this is the only way to lower costs and improve results.
At Geneia, we know there is great opportunity for employers who use an advanced analytics solution that combines clinical and claims information with predictive analytics – if they then take that information and use it to employ programmatic best practices that fit the needs of their particular organization. Knowledge is power – knowledge plus action drives results.
We’ve said it before, but I will say it again. In just 20 minutes on the Theon® platform’s Care Engager® module, a Fortune 500 client of ours identified more than $500,000 in medical cost savings along with actionable information to address these cost drivers and improve employee health.