How brokers can ease the pain of clients’ high health-care costs

By John Thornton

Benefit plan sponsors know they can rely on their brokers for many insurance products and voluntary benefits. Brokers, however, also have an opportunity to be even more of a resource to their clients by offering other services that can help their clients reduce costs while improving employees’ quality of life.

From telehealth solutions and specialty drug management services to utilization management programs, these tools are the latest way insurance professionals are better meeting their clients’ needs and strengthening these relationships. Gaining greater insight and information about these solutions and sharing that information with clients is essential for remaining competitive in today’s evolving market.

3 notable health-care trends and developments

There’s little question that the pandemic changed some of the way Americans receive health care. Telemedicine, in particular, has gained its footing. According to the Willis Towers Watson’s Healthcare Changes Ahead survey, only 2% of Americans had a telemedicine appointment in 2018. In 2021, McKinsey & C. reported that telehealth use had increased by a factor of 38 times from its pre-COVID-19 levels. Further evidence of the growth of telehealth is the Kaiser Family Foundation 2021 Employer Health Benefits Survey’s finding that 96% of employers offered telemedicine as a benefit in 2021.

High-cost specialty drugs also are having an impact on the health-care market. The Centers for Medicare and Medicaid Services estimated that the cost of specialty drugs has been growing by 18% annually since 2014. Based on the AMS 2020 Specialty Drug Trends Report, these pharmaceuticals now consume 51% of total drug expenses in the U.S. despite being used by only 2% of the U.S. population. Gaining control over spiraling specialty drug costs has become a top priority for plan sponsors. With this goal in mind, plan sponsors are turning to specialty drug cost management services, which are proving to deliver significant results.

Health-care utilization management is another resource that has captured brokers’ attention. Health-care providers have employed utilization management to reduce the number of preventable hospital readmissions in the past. But today, plan sponsors - including businesses, unions, trust funds, ERISA plans, state programs and associations – recognize the value of utilization management in containing healthcare costs. Not only is utilization management being used to reduce unnecessary health-care usage, but medication utilization management solutions can empower pharmacy managers with evidence-based, data-driven decision making.

Focusing on these three areas can help brokers further establish themselves as true partners in managing their clients’ insurance and related health-care costs.

Telehealth

Telehealth is now commonly practiced across the U.S. as consumer attitudes toward it have changed significantly since pre-pandemic days. During the pandemic when in-person medical appointments became less desirable, consumers who needed a doctor’s “visit” turned to telehealth. Those who were intimidated by the technology aspects or concerned with privacy and security risks soon realized that a telehealth appointment was a convenient and safe option.

Telehealth platforms have become more advanced recently, and those advancements are winning further support for obtaining health care with this option. We now have integrated telemedicine and nurse helpline platforms that reduce unnecessary emergency department, urgent care facility and physician office visits. These platforms enable consumers who have non-emergency medical problems or questions to call into a dedicated toll-free line staffed by experienced registered nurses based in the U.S.

The nurse conducts a virtual intake of the caller’s medical problem, recording all relevant information (i.e., contact information, symptoms, concerns). Next, the nurse updates the patient’s electronic health record with all of this information and then triages the call. Either the nurse assists the patient fully or transitions the call through the platform for the next level of support to a physician, specialist, patient health advocate or behavioral health professional. The physician or other professional then takes over as needed and recommends an appropriate treatment plan.

The benefits of telehealth include the elimination of waiting times to speak with a professional as well as the convenience of 24/7 virtual access to an experienced health-care professional. In addition, with no member copays or coinsurance, telehealth can produce significant savings compared with the costs that are incurred with a visit to the hospital emergency room or an urgent care center. Considering that HealthRx has estimated that 75% of all doctor, ER and urgent care visits are either unnecessary or pose a risk for the patient, this benefit is especially worth noting.

Brokers looking to bring a telehealth solution to their clients should vet the offerings carefully because they are not all the same and can differ vastly in terms of a platform’s features and the experience of the professionals answering the calls. With HealthCareIT reporting that the global telehealth market size is expected to grow to $638.38 billion over the period from 2021 to 2028 - a compound annual growth rate of 32.1% - adding a telehealth solution to your offerings makes good business sense.

Specialty drug cost management

Drugs designed to treat such critical or chronic conditions such as cancer, arthritis, multiple sclerosis, Crohn’s disease, hemophilia, cystic fibrosis, and psoriasis continue to rise in costs. The Evernorth 2020 Drug Trend Report found that the cost cancer drugs increased by an average of 7% in 2020 over 2019 which, given the high cost of these drugs, can be devastating to a health plan. The average annual cost for specialty drugs including many that treat cancer and various chronic conditions is estimated at $85,000 according to AARP’s RxPrice Watch. For rare medical conditions, the annual costs for one claimant can be up to $250,000.

Pharmacy benefit administrative services is one resource that can help plan sponsors better manage high-cost specialty drugs. These services give patients access to a national network of retail pharmacies that have mail order capabilities. When used in conjunction with a drug cost management service, which gives plan sponsors and their members access to alternate forms of funding for specialty drugs, plan sponsors can achieve significant savings. On average, a plan sponsor could see a 50% reduction in specialty drug spending.

Additionally, plan sponsors can lower or limit their stop loss liability. Tying the specialty drug cost management solutions with medical stop loss can be a good selling strategy.

Utilization management

Just as telehealth and specialty drug cost management solutions enable plan sponsors to reduce the health-care costs, so too does a utilization management service. By assessing the appropriateness and medical necessity of patients’ treatment plans and use of different medical facilities, plan sponsors can benchmark for potential cost reductions.

From inpatient admissions and outpatient visits to ER and home health care visits, utilization management applies evidence-based information relating to various protocols and treatments. Unnecessary services are identified, a patient’s progress is tracked, and resources are evaluated for their medical appropriateness.

Areas for improvements in a patient’s treatment plan are noted along with recommendations for services or treatments that are not needed. As a result, utilization management reduces health-care spending and helps mitigate problems such as insurance coverage denials due to unproven treatments, contract exclusions or documentation errors.

By educating their clients about these resources, brokers can help plan sponsors achieve the optimum balance between lower health-care costs and higher quality of care.

John Thornton is executive vice president, Amalgamated Life. He may be contacted at [email protected].