3 ways insurers can help lower healthcare costs


As millions of newly insured people start using healthcare services, insurers must take steps to reduce healthcare costs without jeopardizing access of care, Forbes reported.

Healthcare spending in the first quarter of 2014 increased at the fastest rate in 34 years, primarily because previously uninsured or underinsured consumers sought medical care after obtaining coverage through the Affordable Care Act. The U.S. Bureau of Economic Analysis attributed the 9.9 percent rise in health spending to more use of health services, prescriptions for higher-priced drugs and elective surgeries, FierceHealthPayer previously reported.

Below are ways insurers can decrease costs that will arise from greater use of medical services.

1. Reduce price variation

The cost for the same healthcare service can vary widely depending on which provider delivers the care. What's more, services performed in hospitals are more expensive, sometimes 10 times the cost, than those delivered in a doctor's office. For example, a spinal MRI conducted at a free-standing physician center can cost up to $742, yet the same test costs up to almost $2,300 at a hospital.

And a study showed private insurers pay a wide range of prices for services at different hospitals, and all of them are higher than Medicare rates, FierceHealthPayer previously reported. But with payment reform models, including bundled payments, patient-centered medical homes and accountable care organizations, insurers can reduce the variation among prices while holding providers more accountable for the care they offer.

2. Urge doctors to use proven technologies

Despite the widespread belief that technology can benefit the healthcare system, there's no proof that it actually improves patient care, according to Forbes. So insurers could help slow down the rate of rising costs by urging their networked doctors and hospitals to only implement technologies with proven efficacy.

3. Enroll more members in wellness programs

Chronic conditions have a major effect on overall healthcare prices, comprising more than 75 percent of all costs. Illnesses like heart disease, obesity, high blood pressure and diabetes are all preventable. In fact, four behaviors contribute to most of these conditions--tobacco use, inadequate physical activity, poor eating habits and excessive alcohol use.

That's why insurers should implement incentives to encourage consumers to improve their health before it declines. Wellness programs offer insurers a method to lower the rate of these conditions as well as corresponding costs. Humana, for example, cut unscheduled absences from work by 56 percent and monthly claims costs by an average of $53 for more than 13,000 employees participating in its wellness program, FierceHealthPayer previously reported.

To learn more:
- read the Forbes article

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