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4 Ways Employers Can Reduce High-Cost Health Care Claims

By Dr. Rupesh Nigam

High-cost claims are the ones that involve more advanced -- and therefore more expensive -- medical treatment and lengthy hospital stays. A study by the American Health Policy Institute noted that they average $122,000 per patient, per year. Spending for high-cost claimants is by far the most expensive contributor to healthcare costs. They make up more than 30% of total health care spending and cost nearly 30 times as much as average claimants.

Two high-cost claim types

High-cost claims include both unavoidable claims, such as those from catastrophic accidental injuries, and avoidable claims, such as those from unmanaged chronic illness.

From a cost-control perspective, "avoidable claims" are far easier to control, and should be prioritized by both healthcare providers and employers.

Here's a hypothetical avoidable claim example. A longtime employee who never took time off to get a well-check is now sick more often than usual – and it turns out he has uncontrolled diabetes that has led to previously undiagnosed heart disease. Eventually, he is admitted to the hospital, where he requires lengthy, extensive treatment. Even upon discharge, the patient must go home with durable medical equipment to monitor ongoing heart issues and remains at high risk.

This is a classic example of an avoidable high-cost claim. Had the patient been regularly seeing a primary care physician for routine screenings and well-checks, his health care team could have coordinated care to work with the patient to manage the risk factors associated with diabetes, minimizing related complications.

Employer role: Four steps

Here are four steps employers can take to save their employee health care budget from many of those avoidable high-cost claims.

Step 1:
Add an Accountable Care Organization (ACO).

Add an accountable care organization (ACO) strategy to employee health plan offerings. ACOs like Kelsey-Seybold work collaboratively to prevent high-cost claims from happening. They emphasize preventive care, routine screenings, and effective management of chronic conditions.

Step 2:
Coordinate, communicate.

Through a coordinated system of care, an ACO like Kelsey-Seybold can share patients' medical histories across specialties. This enables providers to clearly see into a patient's medical history and offer the most appropriate treatments and interventions at the right time and place.

Step 3:
Kick-start employee engagement.

For patients who need extra encouragement, motivation, or a helping hand, Kelsey-Seybold offers several programs to help improve compliance, adherence, and engagement. These include:

  • Disease and Case Management – These coordinated programs provide resources for better health and interventions for patients with hyperlipidemia, congestive heart failure, prediabetes, diabetes, asthma, and end-stage renal disease.
  • Population Health – Kelsey-Seybold's Population Health team takes high-touch care to high-risk patients' homes. This helps bypass barriers that may prevent patients with chronic conditions from getting the care they need.
  • "Real Time Benefits Tool" (RTBT) – This intuitive program prompts the physician and pharmacist to consider lower cost medications when prescribing or filling prescriptions. For patients who need medications to manage chronic conditions, lower prescription drug cost can reduce medication non-compliance and potential catastrophic issues that can result.
  • Virtual Visits – Patients can access primary and specialty care virtually, making health care access easier for employees with busy work schedules.
  • Behavioral Health – By looking at the psychosocial barriers and other social determinants of health, Kelsey-Seybold providers can find ways to meet the needs of patients who might otherwise become high-cost claimants.

Step 4:
Focus on preventive care.

ACOs are incentivized to keep patients healthier, rather than to administer expensive treatments. For example, through its capitation compensation model, Kelsey-Seybold providers are incentivized to manage the health of patients to help reduce health care costs for employers. When a physician-owned provider group has "skin in the game," keeping patients healthy invariably results in a reduction in high-cost claimants.

Dr. Rupesh Nigam

About the Author

Rupesh Nigam, M.D., F.A.C.P., is Kelsey-Seybold Clinic’s medical director of population health and associate medical director of hospital services. He graduated India’s University of Pune Armed Forces Medical College. He also studied at Baylor College of Medicine and The University of Texas MD Anderson Cancer Center and UT Health Science Center at Houston. Learn more about Dr. Nigam here.

About Kelsey Plans for Businesses
Kelsey-Seybold partners with four major insurance carriers (Aetna, Cigna, and UnitedHealthcare) to offer high quality, cost-effective Kelsey Plans for Houston-area businesses. To learn more, visit or call 713-442-3456.

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