How precision medicine can reduce the most expensive claims

Second in a series

With high-cost claimants accounting for just 5% of the population but driving as much as half of all medical bills, precision medicine holds the key to improving treatment and reducing cost of care for a combination of chronic and complex, life-threatening conditions. The latter is largely comprised of cases that include solid tumors and hematologic malignancies, as well as neurodegenerative, autoimmune and rare diseases. 

It's going to cost trillions of dollars by 2030 to treat cancer, complex and rare diseases, which can be three to five times more expensive than the treatment of chronic conditions such as diabetes, congestive heart failure, COPD and cardiovascular disease. So, it behooves benefit brokers and advisers to help their clients keep a closer watch on — and improve management of — their health plan members with these diseases. As we better understand these diseases and their populations become more precise, they should be treated in a more targeted way. 

Read more: 3 ways to help employees catch cancer sooner

Cancer is at the top of every list driving cost, including solid and liquid tumors like leukemias, lymphomas and multiple myeloma. Depending on the datasets we have examined, other significant areas of concern include neurological and autoimmune diseases like multiple sclerosis and Crohn's disease, respectively. There are also many rare illnesses, including conditions that involve neurodegenerative or autoimmune diseases for which patients often fail standard of care or for which there is no standard of care at all. 

Many of these patients get caught in the cycle of trial-and-error medicine, starting with incomplete diagnostic assessments that complicate efforts to determine the best treatments. That, of course, opens the door to precision medicine, whose focus is on understanding patients' biology, genetic and genomic data to make more precise decisions about their disease and treatment pathways, and avoiding expensive and often ineffective trial-and-error treatments.

Read more: This business leader used AI to manage her disability in the workplace 

The direction of drug development for very complex diseases includes many different types of cell and gene therapies, as well as other specialized treatments such as immunotherapies and targeted therapies. The efficacy of this category of newer treatments depends on understanding more about what is driving an individual's disease. This understanding helps to better determine the likelihood of a treatment's response, and thus, the best drugs for each individual.

How do we figure this all out and deliver precision medicine to those who could benefit and save money? The basis of understanding disease and best treatment pathways starts with the "right" diagnostic test. Since a test that's appropriate for one individual isn't necessarily the best or most cost-effective test for another, it does not make sense to offer the same test as a benefit for everyone. There are many tests to choose from, but employers need assistance designing a holistic strategy for helping their members get access to the right diagnostic testing efficiently and cost-effectively. 

Read more: Precision medicine improves outcomes and lowers costs

Furthermore, while precision medicine often starts with diagnostic testing, it's also a matter of getting people access to cutting-edge treatments as quickly as possible. Some of these drugs are on the market, but many are still in clinical trials – an important tool of precision medicine that we will explore deeper in a future commentary. 

What's worth knowing about this topic is that there are serious diseases that are going to affect many, if not all, of your client's members or their loved ones at some point. It's also important to think beyond the direct cost impact to the indirect cost of caring for family members with these diseases, which can be a full-time job. 

The National Economic Burden of Rare Disease Study estimated that the indirect costs of rare disease alone are close to $500 billion. And estimates suggest that 50% of an employer's cost of cancer care is related to indirect costs. It is not just about the elderly; people of all ages are in the crosshairs of these conditions. Consider, for instance, an alarming rise in the rate of colon cancer and autoimmune diseases like Crohn's disease among younger people. 

The potential for cost savings from the adoption of precision medicine is enormous. We are seeing somewhere between 40% and up to 99% of savings associated with quickly getting patients on precision therapies.

Precision medicine may not be a fit for every organization, but there are a few critical indicators that brokers and advisers should watch to determine if an employer is ready to have a conversation about incorporating this strategy into their health plan. One is if an employee population's specialty drug costs are rising every year. Another is if employees have expressed concern about hard-to-manage diseases. The bottom line: Producers bear a growing fiduciary and moral responsibility to becoming better educated about offering these tools to their clients.