WASHINGTON – June 2, 2023 – Nearly 8 in 10 employers consider high-cost claims a significant threat to employer-sponsored healthcare, with an increasing number of companies facing claims in excess of $2-$4 million. To address this complex issue, the National Alliance of Healthcare Purchaser Coalitions (National Alliance) worked with member coalitions and 50 employers across the country to gain insights and develop strategies to manage costly conditions and therapies like cancer, rare disease and gene therapies, and specialty drugs.
“Since the safeguards of the Affordable Care Act were removed, employers may now face claims in the millions of dollars for a single covered individual which can be a catastrophic expense for a business or municipality,” said Michael Thompson, National Alliance president and CEO. “We are sharing key approaches to prevent, mitigate and manage the spectrum of high-cost claims to tackle these growing risks that keep employers up at night.”
Employer concerns and priorities include:
- Employers are seeing a rise in high-cost claims for younger plan members, with $1 million+ claims that include cancer, prenatal/neonatal care, and treatment for COVID-19/long COVID
- Employers have historically been reliant on third-party administrators and pharmacy benefit managers to manage high-cost claims and must hold service providers accountable for better management
- Employers noted that stop-loss insurance is expensive – and while some are concerned about whether to cover certain classes of claims, others have been “rolling the dice” by not incorporating stop-loss
- Some employers are navigating high-cost claims as they get them, rather than taking steps to prevent the occurrence where possible
- Highest priority areas for employers to mitigate over the next couple of years include offering precision medicine for cancer treatment (45%); implementing centers of excellence (39%); negotiating and auditing hospital prices (34%); auditing intermediaries (30%); and mitigating costs and coverage for rare diseases (30%)
Recommendations for employers:
- Identify high-cost claims drivers by taking a deeper dive into available data on costs (e.g., sites of care, high-cost drugs and medical devices)
- Act to prevent likelihood of and mitigate the magnitude of common and often preventable high-cost claims through preventive care and coordination for patients with complex conditions
- Use predictive models for early identification and intervention
- Ensure high-cost therapies are warranted by using data to show efficacy and compare effectiveness for alternative treatments
- Build infrastructure and work with vendor partners to support long-term strategies
The Rethinking How Employers Address High-cost Claims report and infographic are publicly available.
These efforts were conducted with the following coalitions and 50 of their employer members: Alabama Employers Health Consortium, Dallas-Fort Worth Business Group on Health, HealthCareTN, and the Nevada Business Group on Health.
2023 Leadership Summits
These efforts will be among the topics of discussion at the National Alliance 2023 Leadership Summits, June 28-29 in Nashville, Tenn. Focused on three key themes of importance to employers – Surviving to Thriving, Architecting for Value, and Innovation & Integration – the event brings together employers/purchasers, coalitions and other healthcare thought leaders to share industry insights to tackle today’s most pressing workplace opportunities and challenges. Learn more and register.
About National Alliance of Healthcare Purchaser Coalitions
The National Alliance of Healthcare Purchaser Coalitions (National Alliance) is the only nonprofit, purchaser-aligned organization with a national and regional structure dedicated to driving health and healthcare value across the country. Its members represent private and public sector, nonprofit, and Taft-Hartley organizations, and more than 45 million Americans, spending over $400 billion annually on healthcare. To learn more, visit nationalalliancehealth.org and connect on Twitter and LinkedIn.
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