Brief

High cost claimants key to controlling healthcare spending

Dive Brief:

  • A new study from the American Health Policy Institute and Leavitt Partners has detailed the differences between high cost claimants in the private and public sectors to help pinpoint more effective strategies to bring down their disproportionate impact on healthcare spending.
  • The researchers surveyed 26 large employers about their claims data and analyzed Medicare fee-for-service claims data from 2013 to develop their side-by-side private and public comparison. 
  • The study urged both federal and private payers to carefully examine their high cost claimants and concluded that employers are ahead in developing new strategies to address this group.

Dive Insight:

With healthcare costs being highly driven by a relatively small number of high need individuals, it makes sense to focus on this group of high cost claimants to reign in healthcare expenses--particularly before healthcare costs are predicted to "hit the wall" between 2025 and 2030, the study suggested. 

High cost claimants are defined as those who cost $50,000 or more in a year and they are the most expensive source of healthcare costs, beating out medical inflation, pharmaceuticals, and any specific disease or condition, the study found, adding that according to the National Business Group on Health, these claimants are the top cost driver for 43% of large employers.

They noted the impact is similar in government programs, highlighting from 2009 and 2011, the most expensive 5% of Medicaid beneficiaries accounted for 48% of costs. 

Among the study's findings were high cost claimants comprised 31% of total spending among employers’ health plans, and 44% of total Medicare spending. The average employer-based high cost claimant cost $122,382 annually compared to $105,004 annually for Medicare claimants.

The researchers noted plans should focus most on high-cost chronic conditions, which equate to chronic high costs, as opposed to acute high-cost conditions.

While employers are likely to be "nimbler and faster" in addressing this group, the study found, there are several strategies that could be further applied in both the private and public sectors:

• Data mining to target specified chronic conditions;

• Engaging beneficiaries;

• Giving wellness programs a clinical orientation;

• Developing predictive biometric health screenings;

• Using care management; and

• Using State Innovation and Medicaid Waivers to target high-cost beneficiaries.

Filed Under: Payer
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