Commentary: From the launch of the exchanges to the outbreak of Ebola, 2014 brought a number of landmark events that remind us why it is such a fascinating time to work in health care.

Analytics help employers make sense of the latest trends and bring fresh insight to the timeless challenges of improving quality and reducing cost.

Below is a list of unique questions employers asked us to explore in 2014, and some reasons why they were asked:

1. Are my HMO plans delivering value? Many large employers cover their population with a combination of HMO and self-insured plans. By analyzing quality measures and risk-adjusted cost and utilization metrics, employers can assess whether the clinical programs offered by their HMO plans are worth paying a premium for.

2. Will pricing transparency tools live up to the hype? In 2014, pricing transparency tools delivered results for investors, most notably through Castlight Health’s billion-dollar IPO. In 2015, we’re watching to see whether these tools will deliver results for employers. We’ve seen that that the opportunity is real: price variability for routine procedures like lab tests drives substantial incremental cost for patients and plan sponsors. However, the ability to capture savings is highly dependent on usage and engagement. Employers should carefully analyze whether an investment in a transparency tool is a likely to be a good fit for their population and the plan design and incentives they have in place.

3. What’s Sovaldi, and how can it cost $1,000 a pill? Concerns over the cost of specialty pharmacy reached new heights after the launch of Sovaldi, Gilead Sciences’ breakthrough drug for Hepatitis C. While the financial impact of Sovaldi has been most pronounced in Medicaid populations, it has emerged as a notable cost driver in commercial populations as well. Earlier this week, Humana increased its 2015 commercial group cost trend forecast to 5.5-6.5%, up from 4.5-5% in 2014, due to pharmacy costs for Hepatitis C. In 2015, watch to see whether the launch of AbbVie’s competing drug Viekira Pak enables payers to bring Hepatitis C trend under control through formulary management.

4. How much of our ED utilization is avoidable? Due to the rapid growth of urgent care centers, most employers are keen on identifying patterns of potentially avoidable emergency department utilization. Unfortunately, this is easier said than done. Recently, researchers at UCSF published a sharp critique of the limitations of the standard techniques for identifying potentially avoidable ED utilization. Look for predictive models that answer this question from a different perspective. Comparing observed ED utilization to the prediction from the model can provide a more statistically rigorous way to identify patterns of potentially avoidable care.

5. How should I evaluate the impact of our onsite clinic? Spurred by the desire to improve productivity and reduce costs, several employers have opened onsite clinics. However, the scope of services provided at these clinics varies substantially. While all provide basic primary and urgent care services, each clinic typically provides a tailored blend of more specialized services like chronic disease management, occupational health, physical therapy, behavioral health, and even onsite pharmacies. As a result, an effective evaluation of a clinic must be customized, and consider the many different sources of value that the clinic can provide, ranging from lower cost per service, to improved preventative care, and ultimately to impacts on employee satisfaction and productivity.

Sam Stearns is director of analytics for Verisk Health, a data analytics and technology firm.

Register or login for access to this item and much more

All Employee Benefit News becomes archived within a week of it being published

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access