Isolating Chronic Compliance: A Cost Driver Solution
Wortham Insurance & Risk Management
THE GOAL
Reduce cost by identifying, evaluating and managing cost drivers associated with the most prevalent and costly patient population
THE SOLUTION
Utilize claims data analytics, cost driver and prevalence identification and standard of care compliance assessment tools in order to improve compliance and reduce cost of a targeted patient group through intervention programs
THE STORY
Using Design180® data analytics, we found that chronic back conditions accounted for the highest claims spend of a 2,000 employee life plan. Focusing on this patient population (142 claimants) and utilizing the compliance assessment tools, we quickly clustered the claimants by compliance range (below 50%, 51-75%, 76% and above) per treatment standards and found that lower compliance levels led to higher claims.
After discussing this discovery with our customer, we hired an intervention company that provides fascia manipulation, an alternative to physical therapy and chiropractic treatments and in some cases, orthopedic surgery. This on-site intervention program is designed to reduce claims spend on back and joint conditions by using outcome-based treatment models designed to eliminate long-term chronic conditions.
In a year-over-year comparison after implementation, we found that the number of chronic back condition claimants increased from 142 to 222, but the aggregate cost of these claimants decreased from $234,862 to $185,826, a 21% decrease in cost. Additionally, the cost per claimant dropped from $1,654 to $837, producing a 49% decrease per claimant.
Focusing on the initial cost driver population (142 claimants), the decrease in cost per claimant yielded a 270% Return on Investment from the customers wellness initiative. Considering the increase in chronic condition claimants, this ROI provided savings (benefit gain) that exceeded the additional cost of new claimants. Our data also supports greater potential savings in the future by utilizing this wellness program with similar orthopedic conditions.
THE RESULTS
- Cost Per Claimant Decreased by 49.4%
- Greatly Improved Compliance within a Targeted Patient Group
- Participation Adjustments (PEPM) rendered a Aggregate Total Gain of $181,365
- Decreased Year-Over-Year Total Cost by 20.9% despite a 56% Increase in Claimants
- ROI on Initial Cost Driver Population (142) was a remarkable 270% within 12 months
To learn more how Deign180® can aid in the production of return-on-investment figures for targeted wellness initiatives, get in touch or let us show you in a personalized demonstration.
