Healthcare costs continue to rise and much of the conversation focuses on prices. Hospital reimbursement, prescription drug spending, provider contracts and medical inflation all shape healthcare spending.
Those conversations are essential. But they can obscure another important question: What does disconnected care cost?
Many unnecessary healthcare costs do not begin with a single expensive procedure or prescription. They build through disconnected moments along the care journey: duplicate tests, missed follow-up appointments, medication gaps, delayed diagnoses, behavioral health services disconnected from physical care and the absence of a consistent primary care relationship.
Each missed connection creates friction for patients and makes healthcare harder to navigate. Taken together, these gaps can contribute to avoidable emergency department visits, preventable hospitalizations and higher overall medical costs.
Connecting people to the right care at the right time and in the right setting can improve outcomes and reduce avoidable spending.
Care coordination is an important financial lever
Historically, healthcare spending has been measured and managed one transaction at a time. What did a procedure cost? How much did the cost of a hospital stay increase? What is the impact of rising prescription drug prices?
Those questions remain important, but they can miss a larger opportunity: Could some of those costs have been avoided altogether?
Many avoidable costs stem from fragmented care rather than the price of any single service. When patients have consistent relationships with primary care providers and care teams coordinate effectively, health issues can be identified earlier, chronic conditions can be better managed and complications can more often be prevented.
Research published in the American Journal of Managed Care found that eliminating out-of-pocket costs for primary care was associated with approximately 13% lower spending on physician visits, equivalent to an average of $144 in annual savings per member. Reducing barriers to primary care can encourage earlier intervention, before health issues become more serious and more costly.
Similarly, providers participating in coordinated care arrangements designed to keep people healthier have seen 12% more annual wellness visits, 19% fewer emergency department visits and 15% fewer inpatient admissions. These results suggest that better coordination can improve health while reducing the need for some of the costliest forms of care.
How fragmentation drives higher costs
Patients rarely receive care from a single provider. Over time, they may rely on primary care clinicians, specialists, pharmacies, hospitals, behavioral health professionals and community organizations to meet their health needs.
When those experiences are disconnected, tests may be repeated, medication changes may go uncommunicated, follow-up care can fall through the cracks and opportunities for early intervention may be missed. Each gap may seem small in isolation; together, they can drive higher costs and worse health outcomes.
One example is Chavon Haley, a young mother living with diabetes, kidney disease and vision loss who had been visiting the emergency department almost weekly while also facing unstable housing. Working with a nurse care manager through her health plan, she was connected to ongoing medical care, transportation and community resources that addressed the barriers contributing to her repeated emergency visits.
Connecting medical care, behavioral health, pharmacy and social supports around each person can help people receive care earlier, improve medication adherence, reduce unnecessary duplication and create a more consistent experience across the healthcare system.
Integrated care models are increasingly demonstrating measurable value. At Elevance Health-affiliated health plans, for example, integrating medical and pharmacy benefits has been associated with approximately $100 per member per month in medical cost savings.
Where care happens matters
Better coordination also helps people receive care in the most appropriate setting. When clinically appropriate, many routine procedures can be safely performed in physician offices, ambulatory surgery centers, or other lower-cost settings. Giving patients clear information about those options before care is delivered can improve both their experience and the value of care.
An Elevance Health Public Policy Institute analysis found that outpatient costs were 41.9 percent higher among patients receiving nononcological infusions in a hospital outpatient department compared with those treated in alternative sites including physician offices, ambulatory infusion centers and homes.
The goal is not simply to lower prices. It is to help people receive high-quality, coordinated care in the setting that best meets their clinical needs while avoiding unnecessary costs whenever possible.
A different way to think about healthcare costs
Healthcare organizations will always need to manage reimbursement, contracts and medical cost trend. But a significant opportunity to lower costs and improve outcomes lies in reducing the fragmentation that drives avoidable costs throughout the care journey.
Healthcare leaders should continue to scrutinize pricing. They should also ask whether people are receiving preventive and primary care before health issues become more serious and whether incentives reward keeping people healthy rather than simply treating illness.
Every successful handoff, every avoided duplicate test, every timely follow-up appointment and every coordinated care plan represents an opportunity to improve health while reducing unnecessary costs. The economics of healthcare will be shaped not only by what we pay for care, but also by how effectively we connect people to the care they need.
