Medical Costs Can Be Managed By Addressing Key Health Issues
Press Release

During these times of escalating medical expenses, we need to find ways to save claim dollars. “Studies have shown that large claims account for over 80% of medical expenditures,” says Karen Andalman McIntyre, President of Managed Care Concepts. “While medical expenses continue to take a bigger hit on the bottom line, we are finding that by addressing a number of key employee health issues ---- and actively managing claims in these areas --- employers are successfully reducing paid claims.”

Andalman McIntyre points out that claims management encompasses a variety of activities aimed at managing cost: such as increasing patient education so they are empowered to make informed decisions, referring to the appropriate specialists, recognizing alternative levels of care at appropriate time frames to conserve plan dollars and reintegrate the patient into maximum level of functioning, negotiating for services, and making referrals for support systems and community resources.

While employers can use these activities to reduce their overall medical expenditures, they are especially effective in helping combat the rising health care costs associated with a number of conditions that are becoming more pervasive:

: Studies show that more than 19 million Americans suffer from depression, generating medical and disability costs that are at least as high as those of hypertension, diabetes, back programs and heart disease. In fact, the annual toll on U.S. businesses of depression amounts to about $70 billion in medical expenditures, lost productivity, and other costs.

Smoking: It is estimated that when an employee stops smoking, it produces a 20% medical savings. The American Cancer society reports that smokers make six times more visits to health care facilities per year than nonsmokers. In a study of health care utilization in 20,831 employees of a single, large employer, smokers had more hospital admissions per 1000 (124 vs. 76 admissions), a longer average length of stay (6.47 vs. 5.03 days), higher average costs for outpatient visits ($122 vs. $75) and a higher average insured payment for healthcare ($1,145 vs. $762).

Skin Cancer: Reuters recently reported that more than 1 million Americans will learn this year they have skin cancer. That’s more than twice the number who will hear they have prostate or breast cancer, making skin cancer the most common cancer in the United States.

Diabetes: There are over 17 million people with diabetes and another 16 million with PreDiabetes. The annual direct cost of diabetes in the United States more than doubled between 1997 and 2002 In a cost survey conducted by the Lewin Group for the American Diabetes Association (ADA), annual direct diabetes-related medical costs rose from $44 billion in 1997 to $91.8 billion in 2002. Total costs, which factor in lost productivity, were $132 billion in 2002, up from $98 billion in 1997.

Kidney Disease: Kidney disease is one of the most costly illnesses in the U.S. In 1999, approximately $14.5 billion was spent on treating ESRD (end stage renal disease) in the U.S., with $1.2 billion spent on dialysis products. Today, dialysis costs roughly $30,000 per month. Nearly 75 percent of dialysis patients are age 45 or older and as baby boomers age, the average age and number of dialysis patients is also expected to increase.

Obesity: A recent study by the Sturm R. Economic and Policy Research Program, UCLA/RAND Managed Care Centre, reports that obesity raises healthcare costs by 36% and medication costs by 77% over the non-obese state. Many of the 51 million obese adults are turning to gastric bypass surgery --- which ahs quickly become a national phenomenon. The cost of these surgeries is in excess of $25,000 to a benefit plan. While some are successful, many patients experience post-surgery complications resulting in additional hospital days and out-patient care. Many times additional surgery is needed.

Heart Disease: Heart disease is related to the loss of 135 million work days each year. According to the American Heart Association, companies attributed $19 billion in lost productivity to heart disease in 2002. For all cardio-related diseases, including heart attack, stroke, hypertension, the cost soared to $30.9 billion. This is in addition to the direct cost for care which totaled $199.5 billion in 2002.

Stress: It is estimated that stress-related claims cost US companies nearly 10% of their annual earnings. Annually, $26 billion are paid out in disability claims related to stress. Other conditions that result from occupational stress incur health care costs that are compounded by the cost of lost work time. Perhaps the greatest, yet most difficult to calculate, cost of workplace stress is the effects of errors made by workers who are impaired but still working. The industrial accidents caused by on-the-job stress -- which account for 75-85% of all accidents -- are estimated to cost American companies $32 billion annually. And, while employers are decreasing insurance plans and benefits to save money, it’s costing them in the long run. Stressed employees are not seeking preventive healthcare treatment as they should and are seeing an increase in health care problems related to the stress of not being able to pay for healthcare.

“These are some of the conditions that are forefront in the news --- and conditions that do not necessarily have to drain a company’s bottom line,” says Andalman McIntyre. “By instituting an aggressive claims management program that includes or is integrated with an aggressive large case management program, employers have money --- and employees get the help they need.”