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<p>Written by Scott Conard, MD</p><p>When it comes to population health risk reduction, the conversation is evolving. Historically, in the U.S., managing health costs has often been approached from an actuarial perspective—calculating insurance premiums based on past expenses and statistical projections. While this method has served its purpose, it focuses on trailing indicators like price per procedure and frequency of use, leaving the underlying drivers of healthcare costs largely unaddressed. But now, a shift is happening. We’re moving beyond simply accounting for costs to asking critical questions: What’s causing these costs to rise? What are the leading indicators that drive health risks and, ultimately, healthcare utilization?</p><h3>Moving Beyond Actuarial Science</h3><p>Traditional actuarial science calculates costs by factoring in variables like age, geographic location, medical diagnoses, and prescription usage. Insurers then project future costs based on past patterns, layering in adjustments for population demographics. While precise in its methodology, this approach is inherently backward-looking, focusing on how much was spent last year rather than proactively addressing what might reduce future spending.</p><p>At its core, healthcare costs boil down to two key factors: price and use. But focusing solely on these metrics ignores a fundamental truth: the largest driver of healthcare cost is the risk of illness within a population. A high-risk population will inevitably lead to higher utilization and costs, while a low-risk population is significantly less expensive over time.</p><h3>Identifying and Addressing Health Risks</h3><p>To reduce health risks, we must first identify them. The answer lies in analyzing the population’s disease burden and the lifestyle factors driving it. Experience has shown that approximately 30% of a company’s population will eventually account for the majority of high-cost claims. More importantly, about 70% of those costly claims stem from conditions that could have been mitigated through early intervention and risk reduction.</p><p><strong>Lifestyle and Emotional Health: The First Line of Defense</strong><br>Many of the conditions driving healthcare costs are preventable. Addressing lifestyle factors and emotional well-being plays a pivotal role in risk reduction. Strategies include:</p><ul><li>Stress management: Teaching individuals healthier ways to cope with stress without resorting to harmful behaviors like smoking, excessive alcohol use, or substance dependency.</li><li>Health habits: Encouraging basics like adequate hydration, regular exercise, sufficient sleep, and nurturing positive relationships.</li><li>Emotional resilience: Helping people process emotions and conflicts in healthier ways, avoiding destructive coping mechanisms. Addressing these areas not only improves quality of life but significantly reduces the risk of chronic diseases like diabetes, heart disease, and mental health conditions.<br>Navigating Healthcare Smarter</li></ul><p>The second pillar of health risk reduction involves empowering individuals to make smarter healthcare choices. This includes:</p><ul><li>Selecting high-quality providers: Ensuring access to experienced physicians and top-tier facilities.</li><li>Cost-effective services: Choosing high-quality, low-cost imaging or surgical centers to avoid the pitfalls of poor outcomes and inflated charges.</li><li>Preventive measures: Identifying individuals at risk for advanced diseases—such as stage 3 or 4 cancer or the need for kidney dialysis—and intervening early to improve outcomes and reduce costs.</li></ul><h3>High-Quality Care = Lower Costs</h3><p>A critical insight emerges when we focus on proactive health management: the highest-quality care is often the least expensive care. By identifying and addressing risks early, we not only improve health outcomes but also manage costs more effectively. Predictive analytics allow us to foresee who may require expensive treatments like surgery or dialysis, enabling timely interventions that are both effective and cost-efficient.</p><h3>The Future of Population Health</h3><p>This shift in focus—from trailing indicators like price and use to leading indicators like disease risk—represents a fundamental transformation in how we approach population health. By addressing the root causes of illness, promoting healthier lifestyles, and ensuring access to high-quality care, we can achieve significant reductions in healthcare costs while enhancing overall well-being.</p><p>The path forward is clear: organizations must prioritize proactive health management strategies that address the underlying drivers of risk. By doing so, they can create healthier populations, reduce costs, and foster a more sustainable healthcare system. This isn’t just good for business—it’s essential for the future of healthcare.</p><p><br></p><p><em>Dr. Scott Conard is a physician and healthcare strategist dedicated to improving organizational health outcomes through innovative approaches to employee wellness and healthcare management.</em></p>

Revolutionizing Population Health Risk Reduction: A Shift from Historical Costs to Root Causes

Doctor hold smartphone, conduct financial transactions with calculate expenses - income and data documents, put on the desk in the morning.

<p>Written by Brian Uhlig and Scott Conard, MD</p><p>For executives responsible for managing their organization’s health plan, there’s a crucial question worth asking: <strong>Is our current system really designed to treat each individual and improve their health?</strong></p><p>On the surface, the answer might appear to be “yes.” After all, the system has data, information, resources, and influence at its disposal. But take a step back and ask yourself: <strong>How is it working for you?</strong></p><p>If the system truly prioritized individual health, the numbers would tell a different story. Healthcare costs in the U.S. would be at least half of what they are today. Instead, costs continue to rise at a staggering rate of 5% to 10% annually, leaving organizations and their employees struggling under the weight of increasing premiums, higher deductibles, and diminished outcomes.</p><h3>The Misaligned Incentives</h3><p>Here’s the hard truth: The current system is not designed to treat the individual effectively. Why? Because misaligned incentives drive it. Many players in the healthcare ecosystem profit more when costs go up. In fact, rising costs are often baked into their business models.</p><p>This misalignment has created a scenario where nearly one-third of healthcare spending is wasted on fraud, waste, and abuse. These inefficiencies enrich middlemen and other unnecessary stakeholders while leaving employers and employees to foot the bill. Worse yet, 70% of high healthcare costs could have been prevented if root causes were addressed earlier.</p><h3>A Smarter, More Aligned Approach</h3><p>What if we could use the same intelligence—data, information, and systems—but act on it differently? What if we focused on making people healthier and tackling waste at its core?</p><p>This approach is not only possible but also financially and operationally realistic. By investing in high-quality care that addresses the root causes of health issues, organizations can achieve better outcomes and lower costs. High-quality care is the least expensive care because it prevents the need for costly interventions and reduces the churn of treating symptoms without resolving the underlying problems.</p><h3>A Path to Sustainable Savings</h3><p>Consider this: if we worked to eliminate a portion of fraud, waste, and abuse each year for the next five years while improving the health of employees, could we stabilize our costs? The answer is a resounding “yes.”</p><p>Here’s what that path looks like:</p><ol><li>Identify and Eliminate Waste: Leverage data analytics to pinpoint areas of unnecessary spending, inefficiencies, and fraudulent practices.</li><li>Promote Preventive Health: Invest in initiatives that keep employees healthier, reducing their need for expensive treatments and hospitalizations.</li><li>Align Incentives with Outcomes: Partner with providers, vendors, and consultants who prioritize value over volume, tying compensation to measurable health improvements and cost reductions.</li><li>Educate and Empower Employees: Equip employees with tools, resources, and incentives to take control of their health and make informed decisions.</li></ol><h3>The Payoff</h3><p><br>By realigning incentives and focusing on root causes, companies can break the cycle of escalating costs. Over time, this shift leads to a healthier workforce, more predictable expenses, and a competitive edge in attracting and retaining talent.</p><p>As leaders, it’s up to us to ask the tough questions and take bold action. The fly in the sauce isn’t going to fix itself—but we can. Together, we can create a system that works for individuals, organizations, and the bottom line.</p><p><strong>Are you ready to take the first step toward a healthier future for your team and your company?</strong></p>

Realigning Incentives for Better Health Outcomes and Lower Costs

Newspaper headlines warn of rising health costs

<h3>By Brian Uhlig and Scott Conard MD&nbsp;</h3><p><br>The state of healthcare in America today is far from ideal, with many employees struggling to access affordable, high-quality care. Health insurance plays a crucial role in employee wellbeing, impacting not only their physical health but also their financial stability and overall job satisfaction. Employers who recognize and prioritize the importance of a well-structured health plan can significantly improve employee wellbeing and their company's bottom line.</p><h3>The Current Healthcare Landscape</h3><p><br>Many employers are self-insured, meaning they assume the risk of healthcare costs for their employees. This puts them in a position of essentially running a small health insurance company within their business. Unfortunately, many companies lack the expertise needed to manage these plans effectively. This often leads to overspending, wasted resources, and employee dissatisfaction. Additionally, the current system is often plagued with misaligned incentives where brokers and consultants may prioritize their own commissions over the best interests of the employer and employees.</p><h3><br></h3><figure id="figure-zac3envh5m5var6e4"><img id="zac3envh5m5var6e4" src="https://media.gettyimages.com/id/1874191615/photo/autumn-park-scenery-north-china.jpg?b=1&amp;s=2048x2048&amp;w=0&amp;k=20&amp;c=4EGtDbnDmQhz7RLMsfl1ctMmPc-0EbmxHazGQoUJrcM=" alt="Autumn park scenery, North China" title="Autumn park scenery, North China" class="object-cover bg-gray-100 rounded-2xl md:rounded-3xl lg:rounded-4xl" style="aspect-ratio: 16/9; object-position: center center;" data-corners="default" data-aspect="16:9" data-caption="" data-positionx="undefined" data-positiony="undefined" data-fullwidth="false" data-mce-src="https://media.gettyimages.com/id/1874191615/photo/autumn-park-scenery-north-china.jpg?b=1&amp;s=2048x2048&amp;w=0&amp;k=20&amp;c=4EGtDbnDmQhz7RLMsfl1ctMmPc-0EbmxHazGQoUJrcM=" data-mce-style="aspect-ratio: 16/9; object-position: center center;"></figure><h3><br>Impact on Employee Health and Wellbeing</h3><p><br>When health insurance plans are not managed effectively, the negative consequences are felt by the employees. High deductibles and out-of-pocket costs can deter employees from seeking necessary care, leading to delays in treatment or avoidance of preventative services. This is particularly true for employees with chronic conditions or those who require regular medication.</p><p>The stress of financial burden from healthcare costs can lead to decreased productivity, absenteeism, and lower overall job satisfaction. Employees who feel that their health plan is inadequate may also experience lower morale and increased stress levels, which could impact their performance. In contrast, a well-designed health plan can support employees in maintaining their health, offering resources and support for chronic conditions, mental health, and access to quality care.</p><h3>How Employers Can Improve Employee Wellbeing Through Health Insurance</h3><p><br>Employers play a pivotal role in changing this dynamic and creating a healthcare system that <strong>benefits both the company and its employees</strong>. Here are a few steps to take:</p><p><strong>C-Suite Involvement</strong>: CEOs and CFOs need to get actively involved in the management of healthcare benefits. They must view it as a crucial part of their business, applying the same financial scrutiny as they would to any other significant expenditure.<br><strong>Transparency and Audits</strong>: Employers should demand transparency in all contracts with TPAs, PBMs, and brokers. Regular audits should be conducted to ensure that the plan is operating efficiently and in the best interests of the employees.<br><strong>Focus on Data and Risk Assessment</strong>: By understanding the health risks of their employees, employers can create targeted interventions and support programs. This approach enables more personalized and effective healthcare strategies.<br><strong>Value-Based Care</strong>: Move away from traditional fee-for-service models to value-based care, which incentivizes providers to focus on health outcomes. This includes partnering with providers who are committed to improving patient health and reducing costs through prevention and early intervention.<br><strong>Employee Education</strong>: Employers should prioritize health literacy and provide resources to help employees make informed decisions about their care. This also includes educating employees about their own health risks and encouraging proactive engagement in their care.<br><strong>Humanize the Problem</strong>: It is important to listen to employees, understand their challenges with the healthcare system, and use these stories to drive change. Personal experiences can help leadership recognize the real-world impacts of their health plan decisions.</p><p>&nbsp;</p><figure id="figure-xb0fn9f7plm5varjtg"><img id="xb0fn9f7plm5varjtg" src="https://media.gettyimages.com/id/1359134874/photo/doctor-putting-and-stacking-wooden-block-cube-which-print-screen-health-care-and-medical.jpg?b=1&s=2048x2048&w=0&k=20&c=cPOHLbq4S3VSyHypU0O4tUGkJSvVYiHpd-m1xSyYF5c=" alt="Doctor putting and stacking wooden block cube which print screen health care and medical icons for healthy and wellness concept." title="Doctor putting and stacking wooden block cube which print screen health care and medical icons for healthy and wellness concept." class="object-cover bg-gray-100 rounded-2xl md:rounded-3xl lg:rounded-4xl" style="aspect-ratio: 16/9; object-position: center center;" data-corners="default" data-aspect="16:9" data-caption="" data-positionX="undefined" data-positionY="undefined" data-fullWidth="false"/></figure><p><br>Ready to transform your health insurance plan into a powerful tool for employee wellbeing and organizational success? Take the first step toward a smarter, more impactful healthcare strategy today. Empower your team with a plan that reduces costs, enhances productivity, and prioritizes their health.</p><p>Let’s create a healthier, more engaged workforce together. Contact us now to start building a plan that works for everyone.</p><p>Written by Rob Thwaites&nbsp;</p><p><br></p>

The Critical Role of Health Insurance in Employee Wellbeing

Which Door?

The "Which Door?" is a concept that involves a strategic approach to healthcare, aiming to achieve a zero trend in healthcare costs for employers. This approach combines clinical expertise, care pathways, and contract consulting to manage health risks and encourage people to engage with their own health. The pathway to zero trend is not just about cutting costs; it is also about improving health outcomes and creating a system of care that leads to sustainable long-term reductions in healthcare spending.
Key components of the "pathway to zero trend" include:
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Data-driven decision-making: The first step is to distinguish between rumors and facts by obtaining objective data analysis from a third party. This helps employers understand the difference between best and worst performers on a risk-adjusted basis.
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Strategic Contracting: After understanding the data, employers should negotiate contracts that hold intermediaries and providers accountable for outcomes, with performance guarantees.
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Care Pathways: Implementing evidence-based care pathways is essential to manage current and future large claims. These pathways are not static but should be continuously improved based on new data and learnings.
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Integration of Clinical and Contractual Expertise: The approach combines clinical management of health risks and care pathways with expertise in contracting and plan design. This holistic approach creates a system of care that encourages engagement with individual health and reduces long-term costs.
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Transparency and Education: Transparency with consumers and employers about relative quality is important, and rewarding members who seek high-quality care can also be effective.
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Empowerment of HR teams: Providing support to HR teams by helping them feel confident, having the right tools, asking the right questions, and getting the right answers. This also means having the C-suite provide air cover for the changes that need to happen.
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Focus on trends: Rather than aiming for "zero" the focus is on achieving a "zero trend" which is more specific and clarifies the goal. This indicates that the focus is not on eliminating all costs, but rather stabilizing the rate of increase, or achieving a flat cost trajectory.
The "pathway to zero trend" also involves a commitment to continuous improvement and a willingness to challenge established norms. It recognizes that change is not easy and that it may require overcoming resistance and established behavior patterns. It requires a value-based mindset that focuses on the why behind the change, making a case for it. This approach focuses on aligning the incentives of all stakeholders and creating a system where everyone is working towards the same goal. The idea is that this approach can be a journey of transformation, not just a strategy for cost savings.
In short, the pathway to zero trend is about creating a sustainable, value-driven healthcare system where the focus is on both controlling costs and achieving better health outcomes.

Which Door?

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Revolutionizing Population Health Risk Reduction: A Shift...

Realigning Incentives for Better Health Outcomes and Lowe...

The Critical Role of Health Insurance in Employee Wellbeing