Improving Member Outcomes and Cost Management for Self-Insured Companies
Health plan spending is typically the second largest expense for companies, right after employee salaries. It’s a heavy burden for self-insured employers in particular, but one they must provide if they want to remain attractive to top talent. Yet a 2023 SHRM survey found that employee satisfaction with their health benefits was at its lowest point in a decade. Both employers and employees could benefit from opportunities to optimize the value they derive from health plans—lowering costs while ensuring better care outcomes.
This growing need presents a golden opportunity for companies to leverage advanced tools like Health Cost IQ’s AI-driven predictive model to identify cost drivers and improve care delivery. By aligning care quality with cost management, businesses can enhance employee satisfaction while reducing financial strain.
In this post, we’ll discuss many of the factors driving up health plan costs and how to use AI-based insights to lower these expenses. We’ll also consider how self-insured entities can refine their communication with plan participants to improve employee satisfaction with their benefits.
The Cost-Care Disconnect
Plan expenses are surging for employers, while participants frequently experience subpar care. Where, how, and why does this happen? Let’s consider some of the reasons. Below are a number of the ways we’ve seen prices get out of hand for employers:
- Fraud, waste, and abuse: Plan providers are often surprised to learn they could be saving hundreds of thousands of dollars by addressing claims payment irregularities, inaccurate billing, overpriced procedures, and other costly inefficiencies. Based on data collected and analyzed by HCIQ, up to 50% of private employer health costs can be categorized as wasteful or inefficient.
- Fluctuating and unpredictable large claims: Self-insured entities must accurately predict their potential exposure to high-cost claims to set appropriate stop-loss attachment points. Misjudging this number can lead to insufficient coverage, causing employers to pay more out-of-pocket or face high premiums in the following year.
- Stop-loss premium hikes: Stop-loss insurers typically review self-insured entities' claims history and health trends annually. If an employer has experienced high claims or trends indicate higher future risks, this will likely mean an increase in premiums or an adjustment of the terms of coverage.
- Formulary inefficiencies: All too often, costly brand-name drugs are prescribed when lower-cost generic equivalents or lower-cost generic therapeutic alternatives are readily accessible.
- ER visits for non-urgent issues: According to NCBI, 61.4% of ER visits are considered non-urgent. NCBI reporting goes on to share that the most common reasons for non-urgent visits are routine examination/investigation (40.9%), medication refilling (14.6%), and upper respiratory tract infection/symptoms (9.9%).
Meanwhile, care delivery is falling short for many plan participants. Employees aren’t getting the care they need in a timely manner or they’re missing out on proactive wellness opportunities covered by their plan. This can happen for a number of reasons, including the following:
- Lack of provider education: Plan participants often don’t know which doctors are in-network and they don’t know who can properly address their specific or unique health needs while staying in-network, nor do they know where to look to find this information. Instead, they put off preventative care visits or they undergo numerous unnecessary and frustrating visits to doctors trying to find the care they need.
- Misconceptions about ER superiority: This unfamiliarity with provider options can also translate to the costly ER visits that were referenced earlier. Patients often believe the ER offers faster or more comprehensive care, even for minor issues. However, urgent care centers are often a better choice for non-emergent concerns, providing shorter wait times and lower costs, benefiting both the patient and the health plan.
- Underutilization of wellness programs: Many health plans provide wellness programs for plan participants, but often these offerings go unused. This could include discounts on gym memberships, wellness workshops, or other forms of proactive care management that could pay dividends in improving the health of your workforce. Plan participants either aren’t aware of the available options or underestimate the benefit of using these programs.
Using AI Insights to Address Health Plan Expenses
Recognizing the need to address the issues of high plan costs and low participant satisfaction, HCIQ has harnessed the power of artificial intelligence to create an advanced predictive model and clinical grouper. This tool's ability to focus on diverse populations and analyze targeted patient groups makes it a powerful tool for delivering tailored, high-impact healthcare predictions.
With HCIQ’s Predictive Model, plan providers will be equipped for the following:
- Accurate condition prediction: Forecast the likelihood of plan participants developing certain medical conditions and anticipate related costs up to a year in advance
- Enhanced cost management: Gain deeper insights into current and future healthcare expenses, allowing for proactive budget management
- Optimized care delivery: Estimate resource utilization and identify care needs across a population, empowering quicker interventions and improving health outcomes while driving significant cost savings
- Cost attribution: Identify and accurately attribute cost drivers responsible for high-cost predictions for members likely to hit preset high-cost thresholds
With predictions for periods of 6, 9, or 12 months, it will be possible to identify and recommend the best course of action to improve health outcomes for plan participants and lower overall health risk within a company. Plan providers will also be able to plan, target, and administer optimal care to specific individual members and groups based on their specific needs.
At the heart of this innovative tool is HCIQ’s powerful AI Engine. Built to meet and exceed industry standards, HCIQ’s AI Engine delivers results on par with leading market models, ensuring our clients benefit from the latest in AI-driven healthcare innovation.
Take the Next Step
Covered in this post are only a few of the ways HCIQ’s predictive model and AI Engine can be leveraged, but if these ideas resonate with the needs of your team, then, I invite you to connect with our experts for a personalized consultation. It’s not uncommon for HCIQ customers to save 20-30% on health plan spending and see a 6x return on their investment in HCIQ. Contact HCIQ today to discover how we can lower your health plan costs and increase employee care satisfaction.