George Pantos: Technology aids businesses in handling health reform

The writer, of Bethesda, Md., is executive director of the Healthcare Performance Management Institute.

Government officials have begun releasing many of the details on how employers and health care providers can comply with the federal health reform law’s myriad changes.

Confusion has reigned. Hospitals and doctors are flailing about as they try to qualify for bonuses established by the law for meeting certain benchmarks. Employers are simultaneously trying to rein in their spending on health benefits and adhere to the law’s detailed coverage mandates.

High-priced lobbyists, lawyers and other advisers have stepped in, eager to parse thousands of pages of regulations for a handsome fee.

Complying with health reform will certainly be a challenge. But employers, at least, need not retain an army of consultants to follow the law. New technology solutions can do that for them — and reduce their health costs in the process.

Health care costs continue to soar for American employers. Towers Watson projects that insuring the average employee will cost over $10,700 this year. That figure represents an 8.2 percent increase from 2010.

The health reform law will exacerbate those increases. For instance, the law’s requirement that parents’ policies cover their children through age 26 will raise employer premiums by nearly 1 percent. That may not sound like much, but it translates to $3,380 per dependent, according to the Department of Health and Human Services.

Businesses already pay one- third more for employee health benefits than they did five years ago. Absent change, the cost of insuring the average employee will top $28,530 within the dec- ade, according to the Business Roundtable.

Overall, health reform is set to increase national health spending by $311 billion through 2020, according to a recent report from the Centers for Medicare and Medicaid Services.

Many managers are dealing with escalating health costs by simply passing them along to workers. A survey from the Mercer consulting group shows that more than one-third of employers are already planning to raise insurance deductibles, co-pays, co-insurance or out-of-pocket maximums this year.

But employers need not cut benefits or make their workers pay more in order to trim health spending. Technology can help firms to rein in their expenses — and streamline their efforts to comply with the new law.

For instance, new software applications allow companies to analyze their health plans’ claims data in real time so that they can identify potentially costly health risks and implement strategies to head them off. In essence, these tools track vital health information like when employees visit the doctor, what ailments they’re suffering from, what benefits they are — or are not — using, and whether individual workers are following their prescribed treatment plans.

Crucially, the resulting data are anonymous — names and other identifying characteristics aren’t attached to the medical stats. Employers can’t use this information to single out particularly expensive employees. However, the tools do give managers a broad picture of the health risks and behaviors of their work force.

Such tactics are at the heart of Healthcare Performance Management (HPM) strategies, which empower firms to use technology to save money and improve employee health.

For instance, after analyzing claims data, one company might find that an unusually high number of employees are at risk of developing respiratory ailments like bronchitis. In response, management could launch a smoking-cessation program, offering discounts on aids like nicotine gum and patches — or even bonuses for employees who remain smoke-free.

Such wellness efforts can pay big dividends. Harvard researchers have estimated that every dollar spent on wellness saves three dollars in medical expenses. Companies can take savings like these and put them back into their health plans — thereby continuing to provide the high-quality benefits that the health reform law mandates.

With health care costs on the rise — and reform sowing uncertainty in the marketplace — businesses need effective ways to reduce their health expenses more than ever. New technologies that allow employers to take control of their health benefits can provide the answer.

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