The weak association between health risks and near-term health care utilization.
There is a widely held belief that companies can reduce healthcare costs by encouraging healthy behaviors. This presumption is based on the decades of research showing that:
a.) Health risks (such as smoking, inactivity, and obesity) increase the chances of chronic disease over time.
b.) Health risks are associated with higher costs. This body of evidence fuels the multi-billion dollar wellness industry and dictates the types of programs offered to employees.
But how strong is the relationship? And can it help with short-term cost management?
Using data from several large employers who collect health risk information, DataSmart can examine that question. First, We analyzed responses to eight different risk factors:
However, in any given year, across an employed population, there are strong influences on health-related spending that far outweigh the effects of health behavior. These include the design of benefits (and inherent incentives therein), the work environment, the practice patterns of providers, and the employee’s orientation toward care-seeking. Past health risks may influence whether you develop back pain, but the cost of treating that back pain will vary far more due to other factors than what influenced its development in the first place.
Quite simply, every employer should question health improvement techniques as a near term cost reduction strategy. This can only be established by creating a robust data warehouse that collects information on all members of your plan – not just those having medical and Rx claims. Benefits data are tall, wide and sometimes anything but linear as employer plans try to equate Health RIsk and COst Risk. And that’s OK. The beautiful think about the DataSmart program is that you don’t need to know what your data hold at the onset of the exploration. DataSmart us at it’s best not when it’s used to prove points, i.e. strength of carrier/TPA discounts, rather when it’s used to uncover patterns, ask why, explore trends and understand interactions. That’s when insights are gained that fuel informed decisions.
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