Managing chronic conditions is the key to controlling high cost claims

In the United States, 60% of adults have at least one chronic health condition: illnesses or conditions like chronic pain and fatigue that last at least one year and require ongoing management or restrict an individual’s activities. 

Chronic health conditions present several challenges for employees. Supporting them isn’t just the right thing to do — it will help retain them, and convey the message that employees are valued as people, as well as help contain healthcare costs.

Although dozens of chronic conditions affect the general population, a small subset are responsible for a disproportionately large amount of illness and subsequently, a large proportion of medical costs. The top 20% of medical claims account for approximately 85% of all medical costs, while for pharmacy claims, the top 20% of claims account for 95% of all prescription drug costs, according to data in Segal's spotlight on high cost claims.

High-cost claimants are typically defined as the top 1% of members based on total health plan spending with the threshold to be considered a high-cost claimant surging 15% from 2019 to 2022 – from $78,815 to over $90,929 per individual. 

In a nutshell, a handful of high-cost claimants whose extensive medical needs significantly impact the overall expenditure of the health plan. The importance of understanding the underlying drivers of high-cost claims (HCC) and the potential value of implementing interventions that improve employees' health is clear.

Beyond the health care costs of treating chronic conditions, workers and employers incur indirect costs from reduced productivity and lost work days. A national study conducted in 2001 found that 37% of workers with heart disease, 20% of workers with asthma, and 18% of workers with mood disorders missed one or more work days annually due to their condition. Individuals with one of five chronic conditions – hypertension, mood disorders, diabetes, heart disease, and asthma – lose an estimated $36 billion yearly in wages.

Employers may be able to make a bigger impact in claims costs by focusing on preventing disease progression, and by using claims history to get a window into the chronic diseases present in their employees population to guide individuals toward chromic disease management programs.

The solution lies in a proactive approach centered on claims and referral data analytics, and targeted care coordination, alongside improved access to primary and specialty care.  

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Primary care: the front door to healthcare

Shrinking primary care utilization in the US is leading to a preventable hospitalization rate that is 50% higher than the global average.

As the patient’s first point of entry into the healthcare system and the medical home for highly personalized ongoing care, primary care is uniquely positioned to be a force for positive healthcare change in the United States. A multitude of studies have shown that a strong primary care foundation is essential to reducing costs and improving the quality of care: the stronger the foundation is, the better the outcomes.

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Musculoskeletal conditions: awareness and pain management

Musculoskeletal (MSK) conditions such as arthritis, low back pain, and neck pain affect over half of American adults and are one of the top drivers of health care costs, with an estimated total of $420 billion annually.

These conditions often result in persistent pain, significantly impacting quality of life and work productivity. To mitigate these challenges, employers can leverage data and analytics to identify employees at risk for developing MSK issues and connect them to services such as lifestyle coaching, physical therapy, and chiropractic care to help prevent these conditions or reduce their severity.

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Diabetes: healthy habits and preventive care

Diabetes affects approximately 38.1 million American adults, and related medical expenses are $307 billion annually. This disease often occurs alongside mental health issues and poor lifestyle habits, worsening its impact.

Employers can effectively manage workforce diabetes by prioritizing early detection and implementing holistic weight loss programs for employees and their families. Offering benefit plans that cover diabetes-specific care — including medications, health coaching, and lifestyle programs that promote healthy eating and regular exercise — can also significantly improve these employees’ health.

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