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The Costliest Claims for Catastrophic Conditions and the Drugs Used to Treat Them

September 6, 2019 at 9:17 pm

A new report by Sun Life Insurance Co. highlights the top high-cost claim conditions that plague the U.S. health care system and account for more than half of all catastrophic or unpredictable claims costs.

The top 10 costliest claim conditions comprised over half (51.8%) of the $3 billion that Sun Life reimbursed to stop-loss policyholders from 2014 to 2017.

Stop-loss insurance (also known as excess insurance) is a product that provides protection against high-cost claims. It is purchased by employers that self-fund their own health plans, but do not want to assume 100% of the liability for losses arising from the plans.

The “2018 Stop-Loss Research Report,” which Sun Life has been publishing annually for the past six years, provides a glimpse into the kinds of claims that can have an outsized effect on both insured and self-insured employers’ health plans and can drive overall expenditures.

Here are some of the other main highlights from the study:

  • Cancer treatment costs comprised 27% of all stop-loss claim reimbursements between 2014 and 2017.
  • The number of health plan enrollees that had claims costing more than $1 million increased by 87% during the four-year study period. In 2017, this group comprised 2.1% of claims but accounted for 20% of all stop-loss claims reimbursements.
  • The aggregate costs of injectable drugs that were part of claims that cost more than $1 million grew 80% from 2014 to 2017.

The most expensive catastrophic claims and the amounts Sun Life paid out in the aggregate between 2014 and 2017 are as follows:

  • Malignant neoplasm (cancer) – Total paid out: $564 million (portion of total catastrophic claims: 19%)
  • Leukemia, lymphoma, and/or multiple myeloma (cancers) – $235 million (8%)
  • Chronic/end-stage renal disease (kidneys) – $153 million (5%)
  • Congenital anomalies (conditions present at birth) – $115 million (4%)
  • Transplant – $103 million (3.5%)
  • Septicemia (infection) – $88.5 million (3%)
  • Complications of surgical and medical care – $78 million (2.5%)
  • Disorders relating to short gestation and low birthweight (premature birth) – $74 million (2.5%)
  • Liveborn (short gestation/low birth rate, and congenital anomalies) – $69 million (2%)
  • Hemophilia/bleeding disorder – $68 million (2%)

Injectable drug costs

Injectable drugs (which include those delivered by IV or that are self-administered injectable medications) accounted for 8.5% of the total paid out for high-cost claims.

But that’s just the average for the four-year period. Injectable drugs are accounting for a greater share of overall catastrophic claims costs, reaching 9.3% in 2017.

In 2017 alone, 418 drugs contributed to the total $186.3 million that was spent on injectable medications for high-cost claims. But, 62% (or $114.7 million) of the cost was attributed to the top 20. The top five medications accounted for nearly 30%.

Please note that the injectable drugs on the high-cost list are there for different reasons. Some are on the list because of the frequency (how often they are used and how many patients are given the drugs) that they are administered, and others are there because their cost is extremely high.

As an example, the report points to the two top injectable treatments – cancer drugs Yervoy and Neulasta.

Neulasta (used to reduce the chance of infection in patients undergoing chemotherapy) was administered to 354 patients and cost on average $33,800 per dose.

On the other hand, Yervoy, used to treat melanoma that has spread or cannot be removed by surgery, was administered to just 43 patients, but the cost per dose was $323,000.

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How Employers Can Fight the High Cost of Diabetes

September 6, 2019 at 9:14 pm

healthy diet

Diabetes is a devastating illness – and not just for those with the disease. Employers are also shouldering massive and increasing direct and indirect costs due to diabetes.

Diabetes afflicts more than 11% of the adult population, including about 6.3% of full-time workers and 9.1% of part-time workers.

Adults with diabetes incur more than $8,480 in direct treatment costs, on average. Those who are insured spend even more.

A 2016 report from the Health Care Cost Institute estimated that insured workers with diabetes spend more than $16,000 on health care costs per year. Those without diabetes, on average, generate about $4,396 in medical costs per annum.

Indirect costs

Employers aren’t just paying more in direct health care costs and insurance premiums. They also pay via lost productivity.

On average, those with diabetes miss an extra week of work – 5.5 days – compared to other workers, according to Gallup estimates. All told, that adds up to 45 million missed workdays and productivity costs to U.S. employers of $4 billion.

And for employers, these costs may represent just the tip of the iceberg. The Centers for Disease Control (CDC) estimates that more than 114 million adults in the U.S. – a third of the workforce – have undiagnosed diabetes or prediabetes.

What can employers do?

The CDC recommends that employers design wellness programs that specifically target improvements in the following areas:

  • Exercise and activity levels
  • Smoking
  • Hypertension
  • Blood cholesterol
  • High blood glucose
  • Weight/obesity

 

There also are a number of measures employers can take to help mitigate some of the costs to the organization.

  • Offer ongoing counseling with professional dieticians. Employees that regularly meet with dieticians who can help them set small, manageable goals for themselves, make significant and measurable health improvements, according to a 2016 study. The research found that they lost 5.5% of their body weight and reduced blood glucose levels.
  • Start a walking club. The American Diabetes Association’s Stop Diabetes @ Work program recommends that employers encourage company walking clubs to attend diabetes walk-a-thons like Step Out: Walk to Cure Diabetes, or host a Community Walk to Cure Diabetes.
    You can find resources, including posters, newsletter articles, training plans, and walking guides, at diabetes.org.
  • Encourage self-assessment and screening. According to the CDC, 30% of people with diabetes aren’t even aware of it. Workplace screenings are easy and effective. Many employers provide incentives for workers to participate via reduced insurance copays or even cash payments. All screenings should be confidential and employers should not penalize employees who have diabetes, as this could violate the Americans with Disabilities Act.
  • Encourage smokers to quit. Diabetics who smoke have far higher medical costs on average than non-smoking diabetics or non-diabetic smokers. Discouraging tobacco use can pay off in the long run.

With so much at stake, a robust workplace program to fight diabetes can generate a significant return on investment.

The American Diabetes Association estimates that preventing or delaying the onset of diabetes in just one prediabetic employee can generate more than $50,000 in direct and indirect cost savings over five years.

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