Insurers Cite Top Factors for Controlling Health Plan Costs

Overuse of unneeded care, underuse of preventative care, drive costs higher

Stephen Miller, CEBS By Stephen Miller, CEBS December 7, 2021
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Insurers Cite Top Factors for Controlling Health Plan Costs

Three-quarters of health insurers say that managing a health plan's network of care providers is critical to controlling rising medical costs.

The finding is from consultancy Willis Towers Watson's 2022 Global Medical Trends Survey, conducted from July through September 2021 among 209 leading insurers globally.

The plan features mostly likely to keep costs under control, insurers said, were:

  • Contracting with high-quality, cost-competitive doctors and hospitals for in-network coverage (cited by 75 percent of respondents).
  • Requiring preapproval for scheduled inpatient services (67 percent).
  • Offering telehealth services (63 percent).

Telehealth or virtual care rose to the third spot from the fifth position last year, "a sign that more insurers see potential savings from remote options for diagnosing and treating patients," according to the report.

"Telehealth's momentum will be sustained post-pandemic," predicted Francis Coleman, managing director at Willis Towers Watson. "The role of telehealth will continue to evolve not only as a navigation tool to speed access to the right care but also as a means to close gaps in access to care."

Factors Driving Costs Higher

Doctor and patient behaviors that are driving costs higher include overuse of care (64 percent), usually the result of medical professionals recommending too many services or overprescribing costly brand-name medications, according to the survey.

On the other hand, underuse of preventive services (38 percent) was also a significant cost driver and one that worsened year-over-year, due in part to the avoidance of medical care during the pandemic.

Costly Conditions

Insurers named the top three conditions by cost, identical to last year's findings, as:

  • Cancer.
  • Cardiovascular disease.
  • Musculoskeletal issues.

While respondents ranked musculoskeletal issues as the top condition by the number of claims this year, they ranked it fifth last year, possibly due to poor ergonomics in work-from-home environments, according to the report.

"COVID-19 has caused volatility in the trend numbers and in the leading causes of claims, as the sedentary lifestyle that often accompanies working from home has increased the risk of musculoskeletal injuries," Coleman said.

"In addition, as most employers can attest, mental health claims are also on the rise," he noted.

About 4 in 10 insurers predict mental health conditions will be among the three most common—and three most expensive—conditions affecting costs within the next 18 months.


Integrating Virtual and In-Person Care Is Key Trend

Going into 2022, virtual care that integrates with in-person offerings is among the top developments expected by researchers at the nonprofit Business Group on Health.

"Virtual health has a growing role in primary care and the management of chronic conditions, and as a solution for some access issues surrounding mental health," the group recently said. However, "a need exists for patient navigation across in-person and virtual care solutions, in such areas as clinical and data integration, and challenges with appropriate reimbursement, cost-sharing and policy barriers."

Access to mental health counseling through online resources and digital therapy will continue to bridge access gaps for employees, the group believes.

Along similar lines, Fidelity Health Solutions recently advised employers with virtual health benefits to:

  • Optimize employee care integration by ensuring virtual care records are sent to primary care physicians.
  • Reduce health disparities by making sure employees have the technology to support virtual care.
  • Provide education and communication to ensure employees are using the right access point for virtual care.
  • Provide real-time feedback options to monitor experiences.


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