Private Insurers look at 1%

February 27, 2012

At-Risk Patients Gain Attention of Health Insurers


Who doesn’t want to be in the top 1 percent of wage earners, political discomfort aside?

No one, though, is especially envious of another group of 1 percenters: the heaviest users of health care.

One percent of patients account for more than 25 percent of health care spending among the privately insured, according to a new study. Their medical bills average nearly $100,000 a year for multiple hospital stays, doctors’ visits, trips to emergency rooms and prescription drugs.

And they are not always the end-of-lifers. They are people who suffer from chronic and increasingly common diseases like diabetes and high blood pressure.

As the new federal health care law aims to expand care and control costs, the people in the medical 1 percent are getting more attention from the nation’s health insurers.

“The huge opportunity is the at-risk people who are chronically ill,” said Dr. Alan Muney, the chief medical officer for Cigna, a large health insurer. “The problem in the health care system today is there is often too little too late or too much too often.”

Studies have already shown that Medicare spending is concentrated on a small group of individuals who are seriously ill. But an analysis by the IMS Institute for Healthcare Informatics, the research arm of IMS Health, a health information company in Danbury, Conn., provides a rare glimpse into the medical problems of people with private health insurance who are under 65. About three-quarters of them suffer from at least one chronic condition that could spiral out of control without proper care.

Health insurers are likely to have little choice other than to monitor these cases more closely, said Daniel Malloy, an executive at IMS Health. Under the federal health care law, which is expected to go into effect in 2014 if it is not struck down by the Supreme Court, insurers will no longer be able to deny coverage to anyone with a potentially expensive medical condition or put limits on how much they will pay in medical bills.

And avoiding these patients altogether will no longer be an option. Insurance companies will be required to enroll millions of new customers without the ability to turn them away or charge them higher premiums if they are sick. They will prosper only if they are able to coordinate care and prevent patients from reaching that top 1 percent, Mr. Malloy said. “The insurance model is fundamentally changing,” he said.

Many insurance executives say they are already developing programs to better address the needs of these patients. The insurers often work with employers that are self-insured to manage their workers’ medical conditions, and companies are already demanding they do what they can to control costs.

“Once we’ve got patients, we’re responsible,” said Dr. Lonny Reisman, the chief medical officer for Aetna, another large insurer. “We’ve always managed them as aggressively and effectively as we can.”

Insurers are becoming increasingly sophisticated in being able to identify those who are high spenders and those who are at risk of developing serious complications. “It’s important to know who they are and manage their conditions,” said Dr. Pat Courneya, the medical director for the health plan offered by HealthPartners, a large health system based in Bloomington, Minn., which is a client of IMS. People with high medical bills often continue to be costly throughout the years, he said.

While diabetes, for example, typically costs about $12,000 a year to cover, a diabetic whose condition rages out of control can become one of the top spenders with expenses that average $102,000 a year, according to the IMS report. Uncontrolled, their diabetes may lead to a heart attack or stroke or they may lose their eyesight or have a limb amputated.

When Wendy Meath, a 59-year-old with diabetes, was hospitalized a year ago, she was identified by HealthPartners as someone who needed help to control her disease. She had been admitted for kidney stones, one of many possible complications of diabetes. Although she had insurance through her husband, she was unemployed.

Since leaving the hospital, where she was admitted for 12 days for a series of complications from the surgery to remove the stones, Ms. Meath has been in regular contact with one of HealthPartners’ nurses, who serves as a case manager. The nurse calls at least once a month and checks in after she goes to the doctor for any developments. The health plan also assigned a social worker to help her with the cost of medications and other obstacles that were preventing her from taking better care of herself. “It makes me feel like I’m not alone,” Ms. Meath said.

“They’re trying to prevent the big things from happening, which is great,” she said.

The next challenge, say insurers, is to figure out how best to work with a person’s doctor. Because many of these patients seem to be seeing many doctors and taking many medications, there may be no one who is accountable for the patients’ overall health. “You’re going to see some gaps in care that led to this kind of progression,” Mr. Malloy said.

Insurers say they are experimenting with different ways to pay doctors so they are more responsible for overseeing these patients. Cigna, for example, says it plans to pay doctors more to coordinate care or develop ways for the doctors to share in the savings generated when someone does not go to the hospital if the visit could have been avoided through better treatment.

But insurers are also still grappling with their understanding of human nature — why some people simply don’t take care of themselves or take their medicine or go to the doctor, even when it is clear that they should.

Aetna, for example, recently eliminated the co-payments in some of its health plans for certain medicines for people who have recently suffered a heart attack. In a recent study, however, many patients who got these medicines free were still not taking them.

“The reality is if we don’t figure out how to get to the patients, we’re not going to get where they need to be,” Dr. Reisman said.