CHVI Releases Health Value Accelerator™ Results Showing Health Care Costs Can Exceed 20 Cents of Every Revenue Dollar

Nov 14, 2011, 10:30 ET from Center for Health Value Innovation

Initial employer findings expose opportunities to reduce health cost risk, maximizing dollars

CHICAGO, Nov. 14, 2011 /PRNewswire-USNewswire/ -- The nonprofit Center for Health Value Innovation (CHVI) released the initial results of employers completing the Health Value Accelerator finding that over 20 cents out of every dollar of revenue are going toward health care costs that are under managed. This is an investment which CHVI argues could produce better results by focusing on outcomes, which is missing from most benefit programs. The Accelerator is an online tool that allows employers to create a recipe for value-based benefit design focused on engagement and accountability for first-year results.

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"We weren't surprised by the results that show not only an overall lack of engagement from employees, but a need for more attention from employers as well," said Cyndy Nayer, CHVI president and CEO. "Employers are spending billions of dollars, often without holding their plans and providers accountable. The Accelerator is the first employer engagement tool that shows these disconnects."

To date the tool has been used by more than 50 fully- and self-funded employers ranging in size from three to 100,000 employees, representing 600,000 covered lives, annual revenues of more than $215 billion and $2.8 billion worth of health care costs.

Key findings from initial participating employers include:

  • Employers offer tools that should support workforce engagement, but they are not tracking the use or the outcomes, such as behavior change or risk reduction.  
  • Incentives do not guarantee engagement or better outcomes; in fact, some companies showed better outcomes without incentives for prevention and wellness screenings.
  • Most employers do not know how their employees manage their health, or which programs work, until there is a care claim, often for use of the emergency room.
  • When asked about the engagement level of senior management, there is more engagement in companies under 5,000 covered lives.
  • Few employers can relate the size of the diagnosed chronic care population (i.e. diabetes, hypertension, depression, high cholesterol) to the success in managing these diseases. Few employers know the adherence rates of their populations, but they know the total costs of the drugs. In value-based design for chronic disease, the lack of adherence is a key indicator of waste.

"Vendor contracting has not evolved at the same rate as our benefits or even patient care," said Michael Jacobs, National Clinical Practice Leader for Buck Consultants and co-author (with Nayer) of the annual CHVI employer survey in value-based design. "In order to ensure we get what we pay for, we need to establish contracting for outcomes as the industry standard, which requires cooperation, transparency, accountability and value for all involved."

What this means for employers

As a result of these findings, CHVI recommends that employers begin to take a more active and disciplined risk management approach for health benefits, making screening and follow-through their first step; offer guidance to employees on the goal-setting and tracking of prescribed treatment; build accountability through Outcomes-Based Contracting (aligning incentives across all stakeholders) by creating a prototype contract for services, data and measures; and identify and implement best practices that improve accountability for outcomes.

"It's important to treat employee benefits and health care expenses like other business practices," said Gregg Kamas, Vice President, Health Risk Management Practice Leader, IMA of Colorado, CHVI Board Director and advisor for the Accelerator. "Aligning responsibilities for all parts of the puzzle is a necessary step in taming health care and absence costs in a way that encourages good performance and good health."

About the Health Value Accelerator™

CHVI's Health Value Accelerator, is an easy-to-use online tool that prioritizes the redistribution of benefits and resources for better engagement and accountability in care. The Accelerator addresses key health care issues that drive higher health cost and allows health care purchasers to create personalized, actionable reports founded on value-based benefit design, changing the contracting mechanisms focused on the end goal of improved health.

Available free to CHVI members, the Accelerator and can be purchased by non-members and consultants and brokers on behalf of their clients.

About the Center for Health Value Innovation (CHVI)

CHVI (501c3) is focused on the relentless pursuit of innovation in benefit designs that improve engagement, accelerate accountability and create a predictable health cost trend. CHVI members represent over 60 million lives from all market segments in the health value supply chain, sharing the evidence of improved health and economic outcomes through value-based designs, including the Outcomes-Based Contracting™ platform for accelerating meaningful change. The Center for Health Value Innovation's goal is to improve the health of people, organizations and communities throughout the U.S.

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Cyndy Nayer

SOURCE Center for Health Value Innovation