Challenge
A mid-size self-funded group was carrying healthcare costs well above industry norms on two fronts. Inpatient utilization was running at 278 bed days per 1,000 members, nearly double HCS’s book-of-business average of 157 and well above Milliman’s “Well Managed” benchmark of 169. Emergency room usage ranked above the 75th percentile nationally, with ER services significantly exceeding HCS’s book-of-business average of 178 per 1,000. Compounding the cost picture: substandard compliance with chronic condition care protocols and likely underdiagnosis of obesity and prediabetes, conditions that, unmanaged, become high-cost claims.
Solution
HCS deployed a two-part approach. Medical Management Services, including Utilization Management and Large Case Management, addressed inpatient overutilization, ER dependency, and uncoordinated care. HealthReach Predictive Care Management® targeted member engagement, chronic condition management, standards-of-care compliance, and drug interaction risk. reaching members that claims and pharmacy data alone would have missed.
Outcome
The combined impact was immediate and measurable. Bringing inpatient utilization in line with HCS’s book-of-business average represents estimated annual savings of $292,000. Reducing ER utilization to benchmark levels carries an additional estimated $141,000 in annual savings, for a combined opportunity of $433,000 per year. That figure does not include downstream savings from earlier identification of chronic conditions or improved preventive care compliance.
Outcomes Simplified
- Inpatient savings – $292,000 estimated annually
- ER savings – $141,000 estimated annually
- Combined opportunity – $433,000 per year
