Healthcare is a top area of organizational spend.
What are some key trends in healthcare in 2022 and what can this mean for you, as a self-funded plan sponsor?
If you want to skip to the punchline –
- costs are rising
- the health system itself is evolving
- DEI, SDoH, price transparency, and artificial intelligence invite new opportunities
In two words – EXPENSIVE CHANGE.
The big takeaway? Take control and use the massive amounts of data available. Health analytics will help you strategically navigate market transformation, minimize excess costs, and gain first-mover advantage to secure cost avoidance.
1. Healthcare costs are rising, and this will continue.
CMS.gov shared that U.S. health care spending increased 9.7 percent and reached $4.1 trillion in 2020. The health “share” of our economy is projected to rise from 17.7 percent in 2018 to 19.7 percent in 2028. The most significant driver behind this is primarily driven by increases in health sector wages.
What this means for employers as plan sponsors:
As a payor, you’ll want to have the right tools and/or partnerships in place to be able to accurately anticipate and confidently strategize regarding your portion of costs.
What to do:
Offset increases in costs by optimizing plan performance. Use analytics to surface savings opportunities. The Great Resignation and turnover may have changed your employee base signficantly, and needs themselves are evolving. You’ll need a refreshed and keen understanding of the workforce’s needs, utilization patterns, and engagement preferences.
Let’s assume you made solid decisions around health plans, plan administration, programs and policies. Now, get the most out of these choices and proactively drive to the highest level of value possible.
Key TIP: Offset increases in costs by optimizing plan performance.
Eliminate guesswork. Use health data to get the most out of partners and programs.
2. Market and industry disruption continues.
We’re watching the pandemic accelerate the adoption of virtual care and at-home care. We see business investment and digital innovation compliment longstanding desires for an increasingly streamlined, affordable system with improved care access and health equity.
Providers and carriers continue to explore and innovate business models. Value-based care options and accountable care organizations are growing. There are countless new market entrants in the wellness and point solution space.
What this means for employers as plan sponsors:
New health programs and options may offer interesting visions, yet leave employers with many unknowns.
What to do:
Build a repeatable model that lets you easily pilot new approaches and comparably measure results. Find a partner to do the heavy lifting around data sourcing and management. Focus your precious internal resource time on using insights with leadership and making strategic decisions. Choose business partners with seasoned consultative and analytic specialists to track and compare cohorts. Create holistic views that show associated impacts and connected costs. Lean on your partner’s expertise to define metrics and analytic views in ways that support decisions around program expansion, change, or termination.
Key TIP: Create a data-driven program and repeatable model that lets you pilot new strategies or programs and compare measured results.
For instance:
Which joint replacement care approaches have the shortest associated disability duration, fewest average physical therapy visits, and lowest prescription costs?
Choose a flexible analytics technology that will let you analyze results across different plans, evolve over time, and bring in point solution data.
Work with an established vendor whose core vision is in line with providing health analytics to employers, like yourself.
Health Big Data is complex. It requires highly specialized skill sets and domain expertise.
3. DEI and SDoH command the spotlight.
Survey results that report statistics like 83% of U.S. organizations reported implementing diversity, equity and inclusion initiatives in 2021 and political activity like The Improving Social Determinants of Health Act of 2021 (S. 104/H.R. 379), illustrate the magnitude of momentum.
What this means for employers as plan sponsors:
2022 invites enormous opportunity to drive change by partnering with emerging DEI leaders who bring passion and creativity to evolving program design in ways that accommodate a broader set of needs. The very qualities that make us unique and special and our social environments (both home and at work) influence what works well for each of us when it relates to health. Employers that can measure what’s working for whom are set up to make smart and responsible benefits design decisions tailored for their population.
What to do:
Create a data-driven, measurable DEI and SDoH framework around your benefit offerings. This could be looking at traditional metrics by salary range or race, incorporating third-party regional SDoH data, or even looking at variances in condition prevalence based on job types. Look at a minimum of 2 years of baseline data and prioritize equity gaps and key drivers. Host small group lunches to ask employees for context around what you see in the numbers. Engage with health plan- and community-based resources alternatives. With analytic rigor surrounding your efforts, and a multi-disciplinary approach, you’ll see an impressive impact.
4. Health is more top of mind for more individuals.
Literally. The need for mental health services is increased, and mental health has a known influence on physical health and overall health costs. A Kaiser Family Foundation (KFF) study found that during the pandemic, about 4 in 10 adults in the U.S. have reported symptoms of anxiety or depressive disorder, up from one in ten adults who reported these symptoms from January to June 2019. One insurance company published mental health claims increased by 25% in 2020.
What this means for employers as plan sponsors:
Recognize your ability to support the whole person through benefits design. Hit the streets and ask your employees what’s important and what is needed.
Total wellbeing?
You need connected data.
What to do:
It’s a great time to listen to what people say, and measure what they do. In addition to adding mental health benefits, pilot environmental changes. How do a blend of policy updates (e.g. mandatory meeting-free lunch-and-wellness hour?) and benefits expansion (coupled with a wellness program with fitness incentives) associate to employee satisfaction survey data and business goal measurement? The data exists. It’s just a matter of analyzing it.
5. Artificial intelligence, machine learning, and predictive analytics foundations bloom.
AI and ML are being applied for clinical innovation in areas like medical imaging, drug discovery, and to predict disease early. These are areas beyond an Employer’s realm. But these same technical innovations are useful in population health management – for planning, resource management, and targeted communications.
What this means for employers as plan sponsors:
You’ll see more and more talk about health Big Data being used to define health experiences that personalize care, address diverse needs and preferences, and icrease engagement.
As an Employer, you are set to take a leading role in putting health data to work using AI, ML, and predictive analytics. You have access to significant data, control of working conditions and environment, and a trusted relationship with individuals.
Creating a culture that grooms healthier people, invites short-term and long-term advantages:
- increase health
- lower health costs
- improve employee retention
- increase productivity
What to do:
Right now – use AI, ML, and predictive analytics to plan resources, build business continuity and forecast costs more accurately. Next, dig into rising risk groups. Identify actions that influence a more positive outcome. Work with vendors that embrace these technological opportunities – and ask them to articulate how their strategies drive savings for you, as a payor.
Health data is special
You want to analyze Low Value Care or isolate non-emergent ER visits?
Is the data a click away OR a data-engineering-month away?
Processing claims data for analytics means completely restructuring data so that it is useful. It’s not just a final, adjudicated view of each claim. Claims data is translated into a mini-health biography for a set of care services tied to a specific member across a moment.
SIMPLE: How many patients in Hospital A were diagnosed with COVID?
COMPLEX: How many employees had COVID inpatient visits? What other conditions do they have? What is the range and value of related services during stays and recovery? How many days of missed work?
Act, take control.
The costs are high, change is certain, and you have a host of strategic decisions you’ll be making. Everything will be easier if you have answers at your fingertips for data-driven decisions, and a trusted team that can take care of managing data for you. Getting by with the same reports you used last year is no longer enough.
Three tips to consider:
- Resist expanding a BI solution: The allure to apply a corporate business intelligence solution to a new domain (health data) is strong. But consider the data. You’ll need clinical expertise, claims processing logic, coding, classification, and enrichment to create dimensionality to ask specific questions. There’s a reason there is an entire industry around processing health Big Data. A specialized solution will bring sophisticated health data management that does this. A corporate BI tool will not.
- Partner with experts: Work with a trusted advisor with a strong health analytics practice that can provide you with data-driven answers. Consider a partner who will open dashboards in meetings and navigate through data in response to your ‘next questions’ as you work through a topic. Look for firms that can translate what they see in the numbers – clinical expertise coupled with health system expertise. What are viable alternatives for certain types of care visits? What are special considerations for individuals with particular conditions?
- Focus on the fun part: Build data-driven expertise within your team and leave the detailed data work to a specialty partner. The highest value (and most interesting work!) comes from using the data, so spend your time on that. Organize so the work of sourcing, integrating, and enriching data is just done for you. Vendors like HDMS build efficiencies by performing and optimizing back-end work across many clients. Expect trusted, reliable data without the headaches. If needed, augment in-house expertise using Analytics Practice services, but keep at least one resource close to the work.
It doesn’t have to be hard. HDMS works with many large employers that ask one or two internal resources to drive a strategic program, sometimes among other responsibilities. HDMS takes care of the rest. Start today to build a culture and strategic competence around data-driven decisions for a top-area of organizational spend.
