The nonprofit Center for Health Value Innovation released the initial results of employers completing the Health Value Accelerator finding that over 20 cents out of every dollar of revenue are going toward health care costs that are under-managed. This is an investment that CHVI argues could produce better results by focusing on outcomes, currently missing from most benefit programs.
“We weren’t surprised by the results that show not only an overall lack of engagement from employees, but a need for more attention from employers as well,” says Cyndy Nayer, CHVI president and CEO. The Accelerator is an online tool that allows employers to create a recipe for value-based benefit design focused on engagement and accountability for first-year results. “Employers are spending billions of dollars, often without holding their plans and providers accountable.”
To date, the tool has been used by more than 50 fully- and self-funded employers ranging in size from three to 100,000 employees, representing 600,000 covered lives, annual revenues of more than $215 billion and $2.8 billion worth of health care costs.
Key findings from initial participating employers include:
- Incentives do not guarantee engagement or better outcomes; in fact, some companies showed better outcomes without incentives for prevention and wellness screenings.
- Most employers do not know how their employees manage their health, or which programs work, until there is a care claim, often for use of the emergency room.
- When asked about the engagement level of senior management, there is more engagement in companies under 5,000 covered lives.
- Few employers can relate the size of the diagnosed chronic care population (i.e. diabetes, hypertension, depression, high cholesterol) to the success in managing these diseases. Few employers know the adherence rates of their populations, but they know the total costs of the drugs. In value-based design for chronic disease, the lack of adherence is a key indicator of waste.
“Vendor contracting has not evolved at the same rate as our benefits or even patient care,” says Michael Jacobs, national clinical practice leader for Buck Consultants. “In order to ensure we get what we pay for, we need to establish contracting for outcomes as the industry standard, which requires cooperation, transparency, accountability and value for all involved."
What this means for employers
As a result of these findings, CHVI recommends employers begin to take a more active and disciplined risk management approach for health benefits, making screening and follow-through their first step; offer guidance to employees on the goal-setting and tracking of prescribed treatment; and build accountability through outcomes-based contracting (aligning incentives across all stakeholders) by creating a prototype contract for services, data and measures.
“It’s important to treat employee benefits and health care expenses like other business practices,” says Gregg Kamas, CHVI board director and advisor for the Accelerator. “Aligning responsibilities for all parts of the puzzle is a necessary step in taming health care and absence costs in a way that encourages good performance and good health.”
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