Sometimes it pays off generously.
This is the surprising discovery that comes from a review of the chain of improvement that Navajo County has made in its employee health plan over the past several years.
The county has annually cared for the spouses of workers free of charge, hired a consultant to ensure employees with complicated conditions come into contact with top-notch doctors, paid people extra for sports activities, added free insurance for medical helicopter flights, and offered extra care for people with conditions like diabetes.
But here’s the thing: Navajo County estimates the cascade of franchise benefits cut the cost of coverage nearly in half – saving the county at least $ 4 million in damage annually.
“We haven’t seen a rise in staff costs since January 2017 – prices have been flat for five years,” Administrator Eric Scott told the county board of directors last week. “It was amazing to see this happen – we made decisions a little outside the box and saw the payoff.”
How is that possible?
Do more services save money?
In fact, it reflects efforts to cope with the world’s most expensive medical system – which means financial rewards for treating sick people, but also for keeping people healthy.
According to a report by the Peter G. Peterson Foundation, the US spends at least 17% of its gross domestic product on health care, compared to about 9% in most advanced industrial countries. In 2019, we spent $ 11,000 per person on health care compared to $ 5,500 per person in the rest of the developed world.
This partly reflects the much higher cost of procedures in the US – such as MRIs, heart surgery, hospitalizations, and a variety of treatments. The US also spends four times as much on managing its decentralized, mostly private system – around $ 940 per person. Much of this goes to insurance companies that are trying to reduce the claim – often by rejecting claims, squashing benefits, or accumulating large co-payments and deductibles.
Despite wasteful healthcare spending in the US, we remain the only developed nation without universal health coverage – with at least 10% to 20% uncovered for at least part of the year.
Additionally, we remain mediocre when it comes to health outcomes as measured by life expectancy, management of chronic conditions like diabetes, childhood vaccinations, public health infrastructure, and even heart attacks. When it comes to child mortality and prenatal care, we are among the worst in the developed world.
How did Navajo County buck the trend – save money by offering more employee-centric services?
Years of effort began with a decision to hire a consultant to analyze the spending patterns in the system and then suggest ways to save money without harming the health of the county’s 500 or so employees. The health plan includes 874 people, including 418 employees and their families. On average, each employee has two dependents covered by the plan. Employees pay about 21% of health care costs, with Navajo County taking care of the rest.
The analysis showed some surprising trends.
For example, spouses on the plan made twice as many claims each month as the employee – who made about four times as many claims as any child.
This discovery led to the decision to offer free annual exams and other additional prevention services for spouses and children – rather than just for the employee.
A few years later – the results seem clear. The cost per worker rose a modest 13% to about $ 363 per month. That is actually lower than the underlying cost of medical inflation over the same period. However, the cost of the spousal coverage plan decreased 24% to $ 805 per month and the cost per child decreased 25% to $ 89 per month.
Gee: Prevention works. Who would have thought?
Rigorous data analysis yielded some other interesting results. For example, medical claims costs fell 12% over three years – likely due to preventive care, more careful claims management, and other changes. However, the cost of the plan’s drug benefits increased 6% for reasons the counselors continue to investigate.
The data analysis also found a sharp increase in the cost of treating several chronic conditions – particularly diabetes. Diabetes claims this year increased 27% last year. This prompted the county to sign a deal with Virta Health in 2021 based on a treatment, education, and lifestyle change program that the company has sometimes used to actually reverse type 2 diabetes.
The county also adds a contract with Edison Health to manage complicated, costly claims by connecting patients to experts across the country.
“We’ve all heard stories of people who get misdiagnosed and end up paying a lot of money to take care of something they don’t need,” said Scott. “One of the things Edison Health can do. If someone develops an illness, they can have direct access for a second opinion. That can save a lot of money right away. Once they have verified the diagnosis, they will have access to the best care in the country. “
The county has also experimented to pay employees to adopt health habits by adding extra cash to their medical savings accounts.
Scott discussed a number of other innovative changes that have been made in recent years to reduce costs. Some of these ideas are:
• Provision of ambulance insurance in the event that people in the plan need an emergency flight to the hospital – often in the valley. The plan saved the county $ 330,000 in a single year.
• Paying people to be physically provided annually and to participate in the county’s quarterly health challenge – to encourage people to eat healthily, exercise, or make other life changes.
• Introducing a new program to educate people about the importance of their diet and more effectively treat things like heartburn, obesity, stress and other conditions that affect health and nutrition.