Archive for the ‘Medical Cost Trends’ Category

Reducing Employee Medical Cost with Telemedicine

Monday, March 25th, 2013

Telemedicine is receiving a great amount of attention as an effective means to lower employee health care costs, both from having to take time off work and for office visit bills.   Employers who are looking for ways to help employees save time and money on health care would do well to look into telemedicine as a valuable employee benefit.  At the same time, these employers have an opportunity to lower their own business costs for employee absences and medical costs paid by the employer.

What is Telemedicine?

Telemedicine, according to the American Telemedicine Association, is the use of telecommunications technology for medical, diagnostic, monitoring and therapeutic purposes when distance separates the users. Telemedicine makes use of computer and communications technology to capture and transmit text, audio and video information as a substitute for face-to-face contact between patient and doctor.

Telemedicine Options

Telemedicine options can vary from simply using a validated 24/7 telephone service to get a medical doctor’s advice on things like sore throats or influenza or non-narcotic prescriptions, to a real-time mode, where live video  and audio allows the physician, patient, and specialist to communicate interactively.   A third option, called the store-and-forward mode, is used when parties are not available at the same time, enabling medical information, including video, to be emailed or placed on a server for the specialist to view.

With real-time consultation, the physician can do an examination with the use of ENT medical peripherals,[1] so that one’s condition can be viewed by both the physician and the specialist.  This enables the specialist to diagnose and recommend the proper treatment immediately.  This method also provides training for the provider in providing diagnostic, treatment, and follow-up care.

What this does is enable a person to consult a specialist anywhere in the world and not have to travel to the specialist’s office.   This type of medicine can offer huge savings to both employer and employee. Reduction of travel time and the stress of battling one’s way through organizational paperwork and red tape are added benefits that cannot be overlooked.

Americans also like to get medical information online, and many medical providers provide access to helpful medical information that people can research online.   Patients can often get advice from their own physicians through these portals.  Information on specific symptoms may motivate one to obtain treatment sooner.

Successful Monitoring

Telemedicine has been shown to reduce not only the cost of health care, but to provide better care of chronic conditions and fewer or shorter hospital stays.   Self-monitoring/testing devices allow physicians to monitor or test patients at their homes or other places.   Pro-active self monitoring devices for chronic conditions may achieve better disease management success and allow physicians to detect any developing problems.

In Summary

Telemedicine provides a cost effective means to give medical care and access to doctors and specialists that can save both the employer and the employee valuable time and money.

[1] http://www.telemedicine.com/whatis.html Retrieved March 17, 2013

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Part 2: More 2010 Medical Cost Trends

Tuesday, August 31st, 2010

This topic has been very interesting and popular to our readers; therefore, we thought it would be helpful to continue with more 2010 medical cost trends. In this blog we will look at health care fraud and abuse, lifestyle factors, some preventable risk factors, and lastly where the money is going.

Health Care Fraud and Abuse:

  1. Health care fraud is a growing problem that is estimated to cost $69 billion, according to the National Health Care Anti-Fraud Association. This means that $100 million per day, which makes health care more expensive.
  2. Health care fraud accounted for 5% of the $1.9 trillion spend on health care in 2004.

Lifestyle Factors: Multiple chronic health conditions:

  1. Chronic disease accounts for about 75% of the more than $2 trillion spent on health care yearly in the U.S.
  2. 80% of seniors have least one chronic condition.
  3. 50% of seniors have at least two chronic conditions
  4. In 1996, 7% of Americans had more than three chronic conditions and in 2005 the percentage rose to 13%.

What are some preventable risk factors?:

  1. Obesity – 10% of total claims costs are directly attributable to obesity.
  2. Tobacco use – 25% of Americans smoke and 10% of total claims are attributable to smoking.
  3. Sedentary lifestyle – 60% of Americans don’t exercise and only 3% follow basic wellness goals.
  4. Poor nutrition – 60% of Americans exceed their ideal body mass index (BMI).

Where does the money go?:

  1. In 2007, PricewaterhouseCoopers Health Research Institute completed a national report to determine factors driving health care costs. This report showed that an average 87 cents of every premium dollar spent on medical services and products, with hospitals and physicians receiving more than two-thirds of the premium.
  2. On average, for each premium dollar spent, 10 cents goes toward insurer’ administrative functions, which include: information technology investments, premium taxes, fraud detection, provider credentialing, pay-for-performance programs, enrollment and billing, and claims processing.

We hope you have found this information helpful and interesting. Being knowledgeable in the medical cost trends is very important for both employers and employees. Your benefit consultant can help you better understand these trends.

(Resource: Anthem Blue Cross)

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Are you aware of the 2010 Medical Cost Trends?

Thursday, August 26th, 2010

This blog will address the 2010 medical cost trends. Today, the cost of health care is a very large issue for small businesses. When a small business is trying to attract top talent, offering benefits is key. However, the question is how do you balance the rising health care costs with profitability?

The most frequently asked question is, why are rates rising?

According to a brochure by Anthem Blue Cross in 2008 national spending on health care reached $2.3 trillion. So, the question is what factors contributed to this cost. There are three costs we will look at, treatment costs, prescription drug costs and utilization, and cost shifting.

Some factors that drive higher treatment costs include:

  1. Medical price inflation is driving 51% if the growth in health care spending.
  2. Doctors in the U.S. earn two to three times as much as other industrialized countries.
  3. More physicians are becoming specialists and specialists charge their patients twice as much.
  4. Between 1997 and 2006 compensation increased 97% for dermatologists, 78% for gastroenterologists and 65% for radiologists.
  5. Medical technology is expensive. It has lead to improved care, but its contribution to health care spending growth ranges from 38% to 65%.

Factors that drive higher prescription drug costs and utilization include:

  1. Between 1997 and 2007, prices for prescription drugs grew at an average of 2 1/2 times inflation.
  2. Specialty drugs can save and extend lives, but the cost is very high. A new cancer drug can cost $100,000 or more per a treatment.
  3. Half of adults in the U.S. take at least one drug a day.
  4. 7% of all adults in the U.S. take at least five drugs a day.
  5. 2/3 of all people who walk into a doctor’s office walk out with a prescription.

Now let’s look at cost shifting factors:

  1. Government programs, such as Medicaid, SCHIP, and Medicare – pay physicians and hospitals lower rates than private insurers.
  2. Providers adjust prices charged to insurers to offset losses from partial or non-payers.
  3. A Millman study found cost shifting represents 15% of the amount spent by commercial payers to hospitals and physicians.

The more you are educated on medical cost trends the better decisions you can make for your business. Speaking with an employee benefits consultant will help you better understand health care costs and how to minimize the expense for your business, but still provide the maximum coverage.

(References: Anthem Blue Cross)

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