continuous utilization management to control health costs

Even in a good year, health plan budgeting is an imprecise model. Predicting the future health of member population, estimating the risk of sickness, identifying the right treatments for the sickness and then applying the costs associated with those treatments to get an idea of how much would it cost to budget for the risk. Now if you apply external factors like the impact of the pandemic, the whole model can become quite complex. That’s why despite being the #1 or #2 cost category, most self-funded employers don’t do this and rather takes a simplistic approach of adding a percentage to last year claims, and apply cost-sharing adjustments to ‘predict’ the next year costs.

On the demand-side,  prognostic stratified model of care can predict the severity and stage of the musculoskeletal condition as well as define the right treatment pathway for each condition based on the progression. The interesting find from the recent studies is that the prognostic factors associated with outcome of an episode of pain can be generic in nature regardless of the location (back, neck, knee, shoulder etc.) of pain.

On the supply-side, it is also easier to model the cost of planned treatments typically associated with musculoskeletal (MSK) conditions. There is a known start and end point and many times treatments can be packaged in a bundle. There is always some inherent unpredictability,  there is substantial evidence to show that cost for most reimbursable procedures used in treating musculoskeletal pain can be planned using statistical modeling on claims.

What makes it hard to accurately estimate the spend is the plan design prevalent today. The current plan designs have many flaws, and the biggest is ‘deductible’. The ever-increasing deductible introduces irrational buying behavior which makes it difficult to know how people would respond to choices. What we normally see is that members routinely avoid high-value and low-value care because deductibles put a large barrier in-front of the choice architecture.

The way to break through this barrier is via a robust care management program. The care management that’s built around proactive reach out program to members, documenting and addressing all of members’ musculoskeletal needs at every stage of their journey. Each unmet MSK concern is tracked. The addressed concerns are ones where a care plan exists and if the care plan does not exist, a mean episodic cost can be used to estimate the spend. It’s more difficult to estimate the spend for unmet MSK concerns, however risk-adjusted, episodic costs in the member’s geo location can be used.

Sprite Health’s MSK financial management leverages risk stratification tools to predict clinical and financial risk,  clinical expertise and plan administration capabilities to eliminate waste – resulting in over 30% net savings in your MSK spend.

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