Collective Perspective

How concierge services and digital tools are bringing down the cost of healthcare

“The thing I’m really excited about… is the possibility that helping people navigate the healthcare system may be the best way to eliminate waste in the system.” —Ed Cymerys, FSA, MAAA Collective Health’s Chief Actuary, Ed Cymerys, FSA, MAAA

Health actuaries play a critical role for insurance providers, as they measure and manage the risks that affect spending. In employer-sponsored health insurance, they are increasingly asked to determine whether the implementation of a new program—such as a concierge service or a new digital tool—has affected the cost of providing healthcare to employees.

Formerly the Senior Vice President and Chief Actuary for Blue Shield of California, Ed Cymerys, FSA, MAAA now serves as Chief Actuary and Corporate Strategy Advisor for Collective Health. He has also held senior leadership roles for PacifiCare Health Systems, Towers Perrin, and Aetna over the course of his career.

In this podcast hosted by the Society of Actuaries, Mr. Cymerys talks about how new and innovative approaches to care are helping employers not only improve health outcomes, but better control costs.

You spent most of your career with large national insurance carriers. What do you see as the major difference between those companies and the startups you work with now?

Put simply—startups are driven by a culture of innovation. They bring lessons from other industries, build teams with world class talent in engineering, design, and analytics, and are drawn to the most intractable problems. Established companies on the other hand can be risk-averse.

Helping people navigate the healthcare system may be the best way to eliminate waste

Actuaries regularly conduct trend studies. What is changing in the way these studies are done?

Actuaries are increasingly asked whether the introduction of a new program has influenced the cost of delivering care. Was a new program worth the investment?

In the last seven years alone, $23 billion has been invested in digital health and new convenient care settings such as retail clinics. Studies have attempted to measure whether easier access will result in higher utilization and in many cases, these studies confirmed our intuition that convenience has a cost.

How would you describe concierge services and enhanced digital tools?

Concierge services help members navigate the system. If you have an unexpected health issue you can pick up the phone and talk to a real person who can help you understand your options and make important decisions. Often an employer offers an array of specialized services, and the concierge can direct you to the services appropriate for your situation. Most importantly, you can trust the advice you are getting.

Enhanced digital tools are intuitive and easy to use and can be optimized for mobile devices. Consumers, who have grown used to shopping on Amazon and booking travel online, often prefer this self-service approach. The keys to making useful digital tools are great design and engineering expertise.

What led to the recent study, Controlling Employer Health Costs: A Collective Health Book of Business Trend Analysis?

As part of the service to self-funded employers, an actuary prepares a forecast of the funding requirements for providing healthcare benefits to employees and dependents. In conjunction with that work, an analysis of the most recent experience is completed.

This trend study revealed an overall medical trend of 0.1% for Collective Health’s book of business—much lower than the healthcare cost trends being reported in the industry.

Frank Cheung, who leads analytics for Collective Health, dug further into the results.

What excites you the most you about what emerged from this study?

The most exciting finding is the possibility that helping people navigate the healthcare system may be the best way to eliminate waste, proactively helping members get the right services in the right setting. Various other strategies—including mandatory second opinions, required pre-certifications, and narrowing networks—have not moved the needle in a meaningful way. One thing they have done, however, is make the healthcare system more complex and frustrating than ever before.

This study suggests that helping people better navigate the system can lead to less waste, better outcomes, and lower costs.

How can actuaries learn more about these studies?

You can check out my recent article in the June edition of Health Watch titled, Reducing Medical Cost Trend with Concierge Services and Enhanced Digital Tools.

Our customers include: