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NACo > County Solutions > County Solutions Blog > Posts > Is it Possible to Bend the Healthcare Cost Trend? Harris County, Texas Proves It’s Possible
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NACo
County Solutions and Innovation Blog​​
December 10
Is it Possible to Bend the Healthcare Cost Trend? Harris County, Texas Proves It’s Possible

​Written by Lauren Csukardi, Aetna Public Sector business.
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Harris County, TX, the third most populous county in the U.S., was experiencing double digit annual medical trend increases resulting in an increase in medical costs. As their retiree health costs were also rising, so were demands for better plan options. The county needed a new direction to bend the healthcare cost trend.

In 2005, the county partnered with their health care company, Aetna, to develop and introduce innovative solutions to curb the trend and improve health outcomes.  As a result, Harris County went from experiencing a 15.1% medical trend in 2006 to a record low -1.0% trend in 2012.

Medical Trend is the rate at which medical costs increase due to services being used more frequently; an increase in the costs for these services; and/or more expensive services being used.

Harris County was experiencing:

  • A disease prevalence rate which was 2.5 times higher than their health care company’s average 
  • High out-of-network utilization, particularly with kidney dialysis
  • Non-network bariatric large claimants
  • Low engagement of members in disease management, low use of online tools and minimal health risk assessment completion
  • Over-utilization of emergency department visits by all covered employees, dependents and families.

However, Harris County did have a well-informed benefits staff and an interest in developing a culture of wellness to help improve financial and productivity results.

Given the challenges facing Harris County, the solutions required a long term commitment to reduce rising costs.  Here’s what they did:

2006: Trend was 15.1%

  • Harris County hired a full-time wellness coordinator.
  • The carrier assigned a nurse and a designated data analyst to identify members with chronic conditions and use data to drive solutions.

2007: Trend was 13.4%

  • County established a network of wellness champions across the employee population.
  • Implemented the carrier’s Rx Check® program* and mandatory Specialty Pharmacy® program** along with Diabetes America, a medical home for diabetic care; the plan waived the copay and covered supplies at 100%.

2008: Trend was -0.4%

  • Covered bariatric surgery at in-network providers only. Estimated savings — approximately $4.1 million in Year One.
  • Revised the out-of-network coinsurance limit and educated members on the cost of out-of-network providers.
  • Started an annual fitness challenge with Live Healthy America with 2,500 participating members. 
  • Implemented new programs through the carrier, including a Personal Health Record, radiology benefits management*** steerage program (yielded a -21.8% radiology trend), Compassionate CareSM program

2009: Trend was 4.9%

  • Renewed contract for 7 years and revised the medical and prescription plan design.
  • Increased wellness budget and requested additional data analysis.
  • Hired an onsite clinical consultant to assist with wellness initiatives and clinical outcomes.
  • 2010: Trend was 7.3%
  • Continued with wellness initiatives and education to members.
  • Increased annual employee assistance program visits.
  • 12% reduction in large claimants from previous plan year.

2011: Trend was 3.5%

  • Launched an intranet wellness website dedicated to health and wellness.
  • Bariatric surgery covered only at the carrier’s special bariatric Institutes of Quality® network. 
  • Dialysis covered in network only.
  • Omitted high-cost, non-par facilities from elected benefits except in true emergency.
  • Smoking cessation program offered through wellness benefits and prescription drugs covered.

2012: Trend was -1.0%

  • Pharmacy per member per month trend is low and the county and carrier continue to educate members on the mandatory generics program.
  • Overall emergency room rate down -1.6%.
  • Members use participating hospitals in 96.2% of admissions and participating physicians for 96.2% of office visits.
  • Average overall network discount for Harris County is at 63.2% due to member education and increased use of specialists who participate in the health care company’s performance network program.
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Results

  • Increased in-network utilization resulted in a 5.3% increase in network discounts over a five-year period.  The in-network percentage paid also increased by 14.5% (intervention, targeted non-par analysis).
  • Employee engagement rose to 24.1%, beating the health insurance company’s average of 17.8 %.
  • Implemented lower out-of-network reimbursement schedule.
  • Out-of-network dialysis costs fell dramatically, generating $1.6 million in first-year savings.
  • Structured bariatric surgery for in-network coverage at Institutes of ExcellenceTM facilities only, which reduced out-of-network bariatric claims and secondary admissions, with first-year savings of approximately $4.1 million.
  • Emergency department visits are down and urgent care and walk-in clinic visits are up. 
  • Pharmacy trend is going down due to clinical programs and improved communications.
  • As a result of the incremental year-over-year changes Harris County made, their medical trend has declined each year and is now at a record low.

Lessons learned

  • Collaborate and Align.  County leaders must take action and be part of the solution. When a carrier and plan sponsor are aligned in a culture of wellness, the trend can be bent.
  • Focus on Outcomes. Focusing on what drove the trend, not cost shifting and changing in-network copayments was essential. Trend is multifaceted and requires thoughtful consideration of what is needed to yield expected results.  We reviewed the reporting data to determine where the money was being spent and the most cost efficient ways to reduce the cost.
Footnotes

* The Aetna Rx Check program is our suite of five drug utilization review programs, which analyzes pharmacy claims every day to help identify potential prescription errors, support quality care and save money (average conversion rate is 60 percent).

** The Aetna Specialty Pharmacy program provides specialty medications and support to members living with a wide array of chronic conditions and illnesses. The medications we offer may be injected, infused or even taken by mouth. We also operate an in-house compounding pharmacy.

*** Aetna’s radiology benefits management program: a comprehensive approach to both quality and utilization management for high-tech radiology services — MRI/MRA, CT/CCTA, PET and nuclear cardiology. It requires preauthorization for elective outpatient stress echocardiography, diagnostic left heart catheterization and diagnostic right heart catheterization and may require direction to a special network provider for such procedures. This practice affects both plan sponsor costs and potentially members’ out-of-pocket costs; in some cases the difference in cost between accessing care from a select facility versus a non-select facility may be as high as 40 percent.

The Aetna Compassionate Care program provides case management to members with terminal illness. It also eliminates hospice day and dollar limits and allows members to enroll in hospice at 12 months rather than the industry standard of 6 months and has been shown to reduce acute care utilization and improve member and family member satisfaction.

For more information, contact Emmanuelle St. Jean, NACo Program Manager.

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