New data-driven strategy helps to reduce healthcare costs

As rising health care costs continue to outpace inflation, some companies are trying a new data-driven strategy, reports the October Journal of Occupational and Environmental Medicine, official publication of the American College of Occupational and Environmental Medicine (ACOEM).

Evidence-based health benefit design is "an empirical approach...that focuses relentlessly on workforce health and productivity [and] offers an alternative to the traditional method of continually increased cost sharing," writes a team of health and productivity experts, led by Dr. William B. Bunn III of Northwestern University School of Medicine, Chicago. In two new papers, they present the rationale behind the evidence-based approach and describe how one large company has used it successfully to lower healthcare costs.

In evidence-based benefit design, employers analyze data to identify drivers of health care costs—not only direct costs like doctor visits and prescription drugs, but also indirect costs like absenteeism, disability, and reduced productivity. This novel approach uses health economics and outcomes-based principles to assess workforce health and productivity at the individual disease level and to generate and refine strategies for population health management.

Having identified their cost drivers, employers adjust their health benefit programs to address these factors. "The result will be information that can be incorporated into corporate policies, health and wellness programs, condition-specific programs, and the cost-sharing elements of group health benefits," Dr. Bunn and colleagues write. This information allows more robust health benefit design with the potential for reducing healthcare costs while providing appropriate and high-quality care.

In a case study, the authors describe how U.S. manufacturing company Navistar—for which Dr. Bunn serves as Vice President of Health, Safety, Security and Productivity—used evidence-based benefit design to lower health care costs. Routine data on health and medical costs, health promotion and prevention efforts, employee health outcomes, and productivity were carefully analyzed and integrated to identify cost drivers. This information was used to develop appropriate interventions, emphasizing prevention programs and case management for patients with specific diseases.

As a result, Navistar achieved sharp reductions in health care costs—even at a time when national health expenditures were increasing. Hospitalizations, office visits, and prescriptions all decreased, as did workers' compensation/disability and absenteeism costs.

As research on the evidence-based approach progresses over time, it will become a practical option even for smaller companies, Dr. Bunn and colleagues believe. They urge further study of evidence-based health benefit design as a "well-informed, comprehensive, and effective solution" to controlling—and even reducing—health care costs.