How Much Do We Know About High-Cost Claims?

For the health of our businesses and people, we need to get to ‘the why."

What would you do for your business and employees if $20 plus million or $9.5 million dollars landed in your bank account today? No strings attached; you win a cash infusion you can allocate to any aspect of your operations.

Consider how many employees you could hire to expand your footprint, invest in your brand, or buy new technology.

How would you improve employees’ health outcomes and overall wellness? You could earmark more dollars to deliver mental health resources, programs to promote primary care visits, wellness initiatives, and perks like fitness center memberships or healthy meal prep services.

An extra $9.2 million could significantly impact the economic outlook of your business and health of your people.

Now, what if we told you the reality is, employers have spent over $20 million on a single high-cost claimant, in excess of $9.5 million on healthcare expenses for two individuals, and more than $60 million on 45 high-cost claimants, based on a recent analysis of claims. And I remember a time when seeing a high-cost claimant who reached one million dollars in spend was a big deal.

The economics behind these staggering numbers is troubling. In one case a business found itself on the brink of bankruptcy, several had to reorganize, another was forced to sell off a division while one closed a division, another merged, and the stories continue.

How can we be competitive and sustain the health of our businesses, employees, and communities when these unexpected numbers appear? Why are we looking the other way or accepting these numbers as O.K.?

For the health of our employees, businesses, and communities we need to get to The Why, and it starts with asking direct questions to stakeholders.

For one, are we asking the right questions about high-cost claimants to ensure they are receiving the right healthcare? Is their health being properly managed and their diagnoses appropriately examined and treated? Does their care meet established guidelines and is it being delivered in the right setting? Is there duplicate care, or not enough care? Is the patient engaged?

Your partners and vendors should be communicating this with you and those with excessive claims to determine what’s working in their care plan and what’s not. Our system is one of checks and balances. Employers, plan administrators, providers, and benefits consultants play equal roles in data sharing, communication, and cost mitigation.

We know the cost of healthcare will increase, just like the price of any service. It’s the nature of business and economics. Cost-driving factors include chronic conditions, an aging population, advancing medical technology, staffing, high-priced prescription drugs — and the list goes on.

But claimants whose spend is $20 plus million, $9.5 million, or multiple $1 million plus high-cost claimants annually, is costly to employees, the business, and community. The cost to treat a few could be the end of many employee jobs, the closing of a business, or a significant loss of tax revenue for a community. Is there something we could be doing differently and collaboratively? This is now a community problem.

We know employers face a challenging, ongoing responsibility to serve as stewards of their business, their plans, and of the health of their employees — the lifeblood of what allows any business to exist. As we budget, initiate strategic planning, design recruitment strategies and promote our brands, the same intentional and informed analytical review and planning should happen for healthcare benefits.

Think about this. If one of your suppliers handed you an unexpected bill for $9.5 million, you’d be directing some tough questions to this vendor to get to The Why. You would probably also have established triggers along the way, giving you notice that something has gone awry.

So, are you applying the same fiduciary business rules you adhere to for managing your business to healthcare benefits and wellness resources? If not, a disservice is being done to our businesses, employees, and communities.

We can’t get spent dollars back. But we can ask questions, tap into ready resources to spend wisely, and better manage employees’ healthcare. We can provide education to our employees so they ask the right questions of their providers.

For example, our Custom Clinical Model takes into account that 80% of an individual’s health is influenced by factors outside the healthcare system — social determinants of health (SDoH). To address this, the custom clinical model includes a dedicated service team to identify member needs and refer them to needed resources.

This is an everybody, all-in effort. If we approach this together and ask the tough questions, we can navigate high-cost claims with greater success.


About Health Action Council 
Health Action Council is a not-for-profit 501(c)(6) organization representing mid-and large-size employers that enhance human and economic health through thought leadership, innovative services, and collaboration. It provides value to its members by facilitating projects that improve the quality and moderate the cost of healthcare purchased by its members for their employees, dependents, and retirees. Health Action Council also collaborates with key stakeholders – health plans, physicians, hospitals, and the pharmaceutical industry – to improve the quality and efficiency of healthcare in the community.