Managing High Cost Claimants Critical to Reducing Health Benefit Costs

Whether the private or public sector is paying, one common finding is that health care costs are concentrated among a relatively small percentage of high need individuals, those who cost $50,000 or more in one year, the American Health Policy Institute notes.

These “high cost claimants,” as they are called, are at the top of a long list of the most expensive sources of health care costs, surpassing medical inflation, pharmaceuticals, and any specific disease or condition. The Institute says in its report, “High Cost Claimants: Private vs. Public Sector Approaches,” that according to the National Business Group on Health, high cost claimants are the No. 1 cost driver for 43% of large employers.

The American Health Policy Institute surveyed 26 large employers on their claims data and found:

• The average high cost claimant costs $122,382 annually;
• 1.2% of all members are high cost claimants;
• High cost claimants comprise 31% of total spending;
• High cost claimants cost 29.3 times as much as members on average;
• 53% of the health care costs for high cost claimants are for chronic conditions, while 47% are for acute conditions; and
• The costliest claims include cancer treatments, heart disease, live birth and perinatal conditions, and blood infections.

The report notes that employers, for their part, are increasingly developing innovative approaches to high cost claimants and are in a unique position to establish programs that address this group.  “These new approaches, coupled with the slowness of our political system to respond to cost challenges, make it probable that employers will be nimbler and faster in developing innovative programs to address high cost claimants,” the report says.

Some possible initiatives that the private and public sectors can take include:

• Mining health data to target certain chronic conditions;
• Engaging beneficiaries to be active plan participants;
• Implementing wellness programs with a clinical orientation;
• Developing Health Insurance Portability and Accountability Act (HIPAA)-compliant, predictive biometric screening profiles ;
• Using care management to target the costs of particular diseases or procedures; and
• State Innovation and Medicaid Waivers under Section 1115 of the Social Security Act and Section 1332 of the Affordable Care Act (ACA).