Employers also increasingly are using accountable care organizations to control costs.

Aug. 8—High-deductible health plans (HDHPs) may have allowed employers to restrain the increase in healthcare costs in recent years, but employers increasingly are seeing that enrollees in those plans need more help.

Healthcare costs for large employer-sponsored insurance programs have slowed dramatically from double-digit increases to 5 percent increases in each of the last four years and, as projected, in 2018, according to a survey conducted by the National Business Group on Health (NBGH). Employers primarily attributed that slowdown to the “nearly universal” adoption of HDHPs—90 percent offer them, and 97 percent plan to do so by 2020. By 2018, 39 percent of large employers will offer only HDHPs, which already cover 56 percent of employees who work for large employers.

The HDHP enrollment trend has occurred across all types of employers and even more so in the individual health insurance market. Twenty-nine percent of covered workers were enrolled in HDHPs in 2016, according to the Kaiser Family Foundation annual survey.

The powerful cost-control effects HDHPs stem from incentivizing employees to judiciously use healthcare dollars. But employers are increasingly concerned that employees are struggling to shop for care in a market where costs and quality indicators are often opaque.

“Employers have come to the conclusion that as much as we would like employees to be sophisticated consumers of health care, the system is way too complex, way too fragmented, and they don’t touch the system enough to ever be sophisticated consumers,” said Brian Marcotte, president and CEO of NGBH.

Similar challenges were identified in recent research that found only 13 percent of people with out-of-pocket spending in their last healthcare encounter sought information about their expected spending before receiving care. Only 3 percent had compared costs across providers before receiving care, according to the survey-based study in the August issue of Health Affairs.

Tool Use

Although price transparency tools have become dominant among employer-sponsored insurance plans—82 percent offer them—their utilization has lagged, Marcotte said in an interview.

More employers thus are hoping to help employees navigate the healthcare system through the use of medical decision support or second-opinion services (66 percent planning to offer), employee advocacy tools and services for claims assistance (64 percent), and high-touch health concierge services (36 percent).

“You’ve got to deliver an educated consumer to the healthcare system, help them understand what their options are, help them make good choices, help them comply with care, and then help them follow up and manage their care,” said Raj Singh, CEO of Accolade, an on-demand healthcare concierge company.

The low rates of price shopping do not appear to be driven by opposition to the idea, the Health Affairs study authors wrote. For instance, most respondents believed that price shopping for care is important and did not believe that higher-cost providers were necessarily of higher quality. Common barriers to shopping, as identified in the study, include difficulty obtaining price information and a desire not to disrupt existing provider relationships.

“What we’ve learned is it is too hard to recognize what all these resources are independently and when I don’t frequently engage with the healthcare delivery system,” Marcotte said.

The Accolade model entails providing a “dedicated advocate” to manage employees’ use of health care, including their use of price transparency tools and other tools, as well as predictive analytics about their coming healthcare needs. Such an approach was credited with reducing client companies’ healthcare spending by 5 to 15 percent. First-year results for one client, Temple University Health System, included $2.2 million in overall savings, a 3 percent reduction in hospital stays, a 5 percent reduction in average length of stay, and a 4 percent increase in office visits.

The company‘s approach also helped increase the use of employers’ existing cost-saving tools for second-opinion services by as much as 800 percent and of price transparency tools by up to tenfold.

The concierge service can help employees consider not only the prices of competing providers but also how the price will affect their out-of-pocket costs and whether a second opinion would help, Singh said in an interview.

Kara Trott, CEO of Quantum Health, which also offers concierge healthcare services for employers, noted that price transparency tools do not keep HDHP enrollees from facing surprise out-of-network charges—which don’t even count toward deductibles.

Furthermore, effective use of transparency, telemedicine, and second-opinion tools depends on clear thinking. But when faced with a serious illness, employees are “highly emotional, really scared, and their cognitive functions are not very accessible,” Trott said in an interview. “It is a very high-touch model because people are in such an emotional state, such a stressed state, that they don’t interact digitally. They interact with other humans, who are independent—and that’s a key thing.”

ACO Trend

Employers also increasingly are seeking to control costs through the use of accountable care organizations (ACOs). Twenty-one percent of large employers will promote or contract directly with an ACO in 2018, while another 26 percent are considering doing so within two years, according to the NBGH survey.

However, it’s unclear whether employers’ use of ACOs will reduce costs or end up driving more costs, as reportedly is the case with Medicare’s ACOs. A 2016 analysis by Ashish Jha, MD, a Harvard healthcare policy researcher, concluded that even though the Centers for Medicare & Medicaid Services has touted more than $1 billion in 2015 savings from ACOs, the program actually cost a net $216 million that year. And such additional spending doesn’t include significant provider spending on the infrastructure needed to operate an ACO.

Offering some hope for ACOs was a 2016 study in Health Affairs that found that commercial ACOs were significantly larger, more integrated with hospitals, and had lower benchmark expenditures and “significantly higher” quality scores compared with Medicare and Medicaid ACOs.

Employers “feel more strongly about improving quality right now than costs, but the jury is out and that has to be proven out,” Marcotte said, referring to commercial ACOs. Sixty-eight percent of employers told the survey they thought their ACOs would reduce costs.

Marcotte said data indicate that physician-led ACOs—as opposed to those operated by hospitals—may generate savings more quickly.

“The thought is that you have to be sharing savings back into the delivery system,” Marcotte said. “This has to be a win-win for providers.” 

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Tuesday, August 08, 2017