June 26, 2018

Get Smarter on Health Care costs

Employee Benefits

3 min read

Since the 1970’s, we’ve experimented with HMOs, PPOs, the Affordable Care Act, with the goal of controlling premium costs. Some measures have helped a bit, but on the whole, it’s not working.

So, who’s at fault? Pretty much everyone. Doctors are focused on patient health and, until recently, have not been particularly focused on the costs. Employers respectful of privacy and sensitive to personal health information, have largely taken a laissez faire approach with employee health issues and decisions, but also don’t want to pay more for insurance when employees don’t take care of themselves. Pharmaceutical companies want to improve drug efficacy, and also grow profit. Similarly, hospitals need expensive diagnostic machines to stay competitive while assuming care responsibilities for all patients regardless of their ability to pay, shifting cost to those will full coverage.

In response, there’s been a push for doctors to be more cost conscience, employers to pay for and incent wellness programs, and for drug manufactures to provide programs that help with costs. The push for transparency and greater scrutiny around hospital pricing methodologies has increased. Despite these actions, costs still go up and up and insurance premiums keep on climbing.

If these and other actions are not affecting costs, what will? Perhaps a truly smarter approach.

Did you know that about 30 percent of diagnoses are wrong? Statistically speaking, you know someone that has had a diagnostic error. A bad diagnosis costs the patient and the system gobs of money, all of it going in the wrong direction; more tests, new prescriptions next to unused prescriptions in the medicine cabinet, exploratory surgeries followed by more surgeries.

There are millions of words written in medical journals each month. It would be humanly impossible to read all of that material just to keep up with the latest findings and best practice treatment options for any given condition. A new breed of artificial intelligence (AI) software systems such as IBM’s Watson - could “read” all medical journals in seconds. It may be artificial, but it is not un-intelligent.

But can an employer hire Watson or a similar AI system that rarely makes errors on the diagnosis or treatment plan anytime you feel sick or suffer an injury? Not yet. So, until Dr. Watson takes up widespread residence, what are patients, employers, and other healthcare stakeholders to do? Perhaps an approach that helps service users be smarter and think harder is in order?

At a minimum, invest in a low cost telephone or web based doctor interaction capability to provide a good first or second opinion for little to no costs. Some plans already provide these types of offerings. When patients ask for a second opinion, the original physicians often stay, but the course of treatment changes 80 percent of the time. What about requiring a second opinion on any medical expense of $3,000 or more?

Empower employees to be better healthcare consumers - provide tools and services that ensure they are utilizing the right medical tests and procedures. Second opinions have value beyond the dollars saved. They not only save money, more importantly, they can save lives.

Until the AI revolution arrives, delivering better care and treatment at the right time, in the right setting and at the right cost will help drive down costs and drive out inefficiencies. The best approach to cost control is to encourage a smarter approach to health care buying and utilization – from plan design to patient support.

The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.

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