With his health care overhaul stalled, President Barack Obama has challenged America to come up with alternatives. “You got a better idea? Bring it on,” he recently announced. A televised summit meeting on health care ideas is scheduled for Thursday, Feb. 25.
A suggestion. Why not focus on streamlining health costs by harnessing technology that allows companies to take control of their healthcare expenses?
Businesses generally lack the data necessary to measure and manage their health costs, even though health care often represents their second– or third-biggest expense. Indeed, executives have a better sense of how much money they spend on office supplies than they do of where their health-plan dollars are going. But with the cost of health benefits projected to increase 7 percent in 2010 — and to double over the next seven years — businesses can no longer afford such willful ignorance.
Some firms have a stake in preserving the costly status quo. Look no further than the insurance industry, whose top five companies recently announced record profits that were 56 percent higher than last year’s. Insurers’ business models are largely based on keeping American firms in the dark – that is, preventing them from analyzing their own health care data and using the results to find alternative benefit structures that may offer better outcomes at lower cost.
Companies have tackled customer relations and supply-chain management with technology-driven strategies. So why not do the same for health benefits?
Such “health care performance management” business strategies can alert companies to expensive problems within their benefits programs — and then help them find ways to implement money-saving fixes. The innovative technology for doing so exists. It just needs to be adopted on a grand scale – and doesn’t require an act of Congress.
Although benefits are growing ever-more expensive, most firms employ a limited number of tactics for trimming their health costs. They may tweak their plan design by adjusting the level of benefits employees receive, forcing workers to pony up a bit more, or switching to a different provider. But these primitive approaches yield only marginal savings – at best.
Health care performance management offers employers an alternative. With HPM data, managers can see what is happening in their benefits plans – insight that used to be the exclusive property of insurance companies.
For instance, on an aggregate basis, businesses could find out how many times the employee population has visited the doctor in the past year and correlate this information to ensure their employees are following the right treatment plans. What areas are showing the highest potential for future medical risks? Using that information, management could use tested software tools to implement high-impact, low-cost measures in response to patient risks — and achieve real savings in the process.
Imagine if a segment of a company’s workforce suffered from serious but treatable conditions like a combination of high blood pressure and high cholesterol with a family history of diabetes. Many of these patients don’t take their medications appropriately or follow the courses of treatment prescribed by their doctors. Companies can use real-time dashboard features to manage these risk factors preemptively – to the benefit of both workers and the company bottom line.
For instance, employers can link their workers up with specialized “coaches” to help them pursue personalized treatment regimes. These mentors can inform patients about lower-cost medicines or even prepare them to ask the right questions at the doctor’s office.
Critically, technology-driven HPM strategies also allow for strict protection of employee privacy. Employers simply aggregate data and lean on third-party health care providers to engage their employees. In other words, companies pay the bills – but private medical decisions are handled exclusively by doctors and patients. Executives don’t need to know who’s at risk – they just need to know that a risk exists.
HPM-driven cost transparency has already allowed many firms to save money on their health bills. One South Carolina-based long-term-care firm, for instance, saved 18 percent on its health care costs thanks in large part to insights gained from HPM data.
When health care becomes a cooperative effort, workers benefit, too. A large Georgia-based radio station operator reported that enrollment rates in its wellness program nearly quadrupled thanks to initiatives driven by HPM data.
President Obama came into office promising the most technologically savvy administration in history. Yet his health care plan virtually ignores common-sense money-saving technologies that we use in all other aspects of our lives. It’s about time that changed.
George J. Pantos, Esq., is Executive Director of the Healthcare Performance Management Institute. He is former Deputy Undersecretary of Commerce as well as former General Counsel to the Self-Insurance Institute of America.