According to a 2013 Deloitte survey, three out of every four employers view hospital costs as the leading driver of healthcare costs. And no wonder. The Centers for Medicare & Medicaid Services reports that hospital care makes up 32 percent of the nation’s $2.9 trillion spend on health care. Add physician, clinic, dental, and other professional costs and the total jumps to 59 percent.
With hospital and provider costs strongly influencing health care costs, what can employers do to mitigate the situation? The key is to keep employees out of the hospital. That’s where care management comes in.
Lower healthcare costs through care management
Kaiser Permanente (formerly Group Health) views care management as the bridge between care delivery and health plan coverage. It can take many forms, from complex case and chronic condition management to hospitalization management and post-hospitalization transitions. Not only does care management lead to better health outcomes for your employees, it can help you mitigate hospitalization costs.
Care based on proven best practices
Kaiser Permanente offers a number of care management programs that effectively extend care for your employees far beyond the exam room.
1. Nursing Advice 24/7
The Kaiser Permanente Consulting Nurse Service provides around-the-clock, phone-based nursing advice. Often, a call to the nurse helpline can eliminate the need for a visit to the doctor, saving employees and employers money. Services include self-care advice, care coordination, and appropriate next steps for acute and chronic care needs. The latter is particularly important, as you’ll see, when it comes to emergency room use.
2. ER Management
Just letting employees know that there are alternatives to an emergency room visit—such as accessing an urgent or convenient care center—can result in big savings. CareFirst of Maryland compared the costs of treatment for several common ailments, ranging from the flu to urinary tract infections. Care from urgent or convenience care centers resulted in savings between 74 and 94 percent when compared to treatment at an emergency room.
3. Chronic Disease Management
By putting into effect any number of disease management programs—such as risk assessments, health coaching, and value-based benefit design—you can help your employees better cope with their chronic conditions, and even mitigate costly hospital and ER visits. In fact, 87 percent of employers’ health care cost savings have come from disease management programs.
4. Hospitalization Management
Avoidable hospital readmissions add more than $17 billion a year to health care costs, and hospital patients who are readmitted experience longer stays compared to other patients.1 Health plans that offer transition management—from hospital to another care setting—can help limit or eliminate hospital readmissions. A pilot study down under Group Health showed, that after one year, improvements in transition management saved $51 million.2
5. Shared Decision Making
Kaiser Permanente involves its members* in shared decision making. This includes in-person, doctor-patient conversations and shared decision-making aids for 15 health conditions in six specialty areas, from back pain to cardiac care. When patients are better informed of their options, they often will choose more conservative, less costly forms of treatment and, are happier with their decisions. In fact, for people with knee or hip arthritis, rates of joint replacement surgeries dropped sharply by 38 and 26 percent respectively over six months.
*Who receive care at Kaiser Permanente medical offices
- Group Health Inpatient Savings Report, 2010.
- Health Affairs, September 2012, no. 9, 2094–2104.