From all projections, U.S. employers should expect their healthcare costs to rise in 2021. Self-insured and fully-insured plans could see their premiums increase between 5-6% according to projections by the consulting firm of Willis Towers Watson. Factors that will influence their premium increases include: the potential of new COVID-19 waves, the costs of a vaccine or therapeutic agents, and the effectiveness of policies deployed to mitigate the virus’ spread.
Self-funded plans could be especially hard hit by rising health care claims next year. Willis Towers Watson projected that self-funded plans could incur a 7 percent increase in health care claims in 2021 if many of their workers are hospitalized with COVID-19. There are options and tools that self-funded plan sponsors can use to help contain their healthcare costs in 2021. It’s important that plan sponsors carefully weigh their options and take advantage of proven cost-containment tools such utilization management.
Options and Tools for Self-Funded Plans
For instance, self-funded plans can choose not to waive their members’ cost-sharing for COVID-19 treatment inclusive of deductibles, co-insurance and co-pays for treating COVID-19. Electing to do so would be understandable given the severe economic impacts many businesses incurred as a result of mandated lockdowns. Weighing into their decision will be the costs associated with treating COVID-19. Willis Towers Watson’s cost analysis provides a look at some of the costs associated with treating a COVID-19 patient. They include:
- Approximately $250 for patients with mild cases
- An estimated $2,500 for patients with moderate cases
- Approximately $30,000 for patients with severe cases requiring inpatient hospital stays
- Costs approaching $100,000 for catastrophic cases requiring intensive care
- Other costs include COVID-19 tests ranging between $50 and $95 dollar per test, costs for test administration at $100 if performed in a doctor’s office an up to $1,000 if performed in an emergency department depending on the geographic region, and additional care outside of an inpatient facility at an average cost of $4,000
Keeping these high costs in mind, many self-funded plans turn to experienced providers of utilization management to apply evidence-based criteria and guidelines. These guidelines determine the medical appropriateness of care and patient-setting factors, consider level of care determinants, and apply quality of care parameters. This holistic approach is designed to promote the optimum utilization of healthcare resources and promote maximum cost containment. Mitigating risks and helping to ensure compliance with regulatory mandates is also a key function of utilization management.
Choose Utilization Management Providers Wisely
Not all providers of Utilization Management services are alike. Self-funded plan sponsors should seek out providers with a proven track record serving a wide range of self-funded plans including those held by unions, trust funds, ERISA plans, state programs, businesses and associations. They should offer:
- An experienced team of registered nurses and physicians overseeing comprehensive clinical services and settings
- Service available on a 24-hour basis with the ability to “wrap-around” the utilization
- Accredited to URAC standards
- In compliance with Department of Labor standards for ERISA self-funded plans