Population Health Management Can Reduce Heath Care Costs

February 10, 2006 (PLANSPONSOR.com) - Two white papers released by Buck Consultants explain how a Population Health Management program can help employers reduce health care costs.

Paper authors, Bruce Hochstadt and Patricia Curran, propose in part one of Population Health Management: Achieving Results in a Challenging Environment, that the lack of health care management, caused in part by insurers’ turn away from utilization management, is a driving force in rising health care costs. Utilization management was in place to ensure that services that are costly and prone to misusage are used properly, the authors said. They suggest employers evaluate the health risks of their employee population and improve on that through care management programs.

Many covered individuals that are afflicted with chronic diseases are not receiving appropriate follow-up care or complying with recommended and prescribed therapy, according to the paper. In addition, those who are responding to current treatment plans are requiring “excessive and escalating levels of care.” The authors say that, “Care management programs that emphasize education, self-care and compliance with prescribed treatment could improve health outcomes while reducing risks and costs.”

In part two, the authors emphasize that employers should analyze the details of their employees’ patterns of care, including diagnoses given, procedures obtained and employee demographics, to recognize gaps in care and categorize members of the employee population according to their risk level. This analysis, along with a health risk appraisal obtained from employees’ own reports of their health and lifestyle, can help employers know the appropriate care management programs to implement.

Employers can implement wellness, prevention, health maintenance, and fitness programs to aid in disease prevention as well as illness and recovery management. The authors advocate cash and non-cash incentives to urge employees to comply with risk assessments and appropriate care management programs. According to the paper, “Most well-orchestrated disease management programs should pay for themselves in their inaugural year… and begin to generate a positive return shortly thereafter.”

Part two also discusses the tools provided by Bulk Consultants to aid employers in their analyses.

Part one of the white paper can be viewed here .

Part two can be viewed here .