January 22, 2025

The Hidden Cost of Overutilization and Lack of Primary Care: A Call to Action for CFOs and HR Directors

Employer Healthcare Solutions / Converging Health Website

As leaders responsible for balancing the financial health of your organizations with the well-being of your employees, you face a complex challenge: managing escalating health insurance costs without compromising the quality of care. Two often-overlooked factors significantly driving these costs are the overutilization of medical services and a lack of primary care engagement among employees. Overutilization of Medical Services: Paying More for Less Overutilization occurs when medical services are provided with a higher volume or cost than is appropriate. This includes unnecessary tests, redundant procedures, and avoidable emergency room visits. While these services may seem beneficial on the surface, they often do not contribute to better health outcomes and can, in fact, expose patients to unnecessary risks. For example, an employee with a minor headache might receive an expensive MRI scan when rest and over-the-counter medication would suffice. Such instances not only inflate individual claims but also contribute to higher premiums for the entire organization. Overutilization can account for up to 30% of healthcare spending, a staggering figure that directly impacts your bottom line. The Role of Primary Care: The First Line of Defense Primary care physicians (PCPs) serve as the gatekeepers of health, providing preventive services, managing chronic conditions, and coordinating specialist care. However, a significant number of employees lack a strong relationship with a PCP. This absence leads to fragmented care, delayed diagnoses, and increased reliance on specialist and emergency services—all of which are more costly and less efficient. Without primary care guidance, employees are more likely to self-refer to specialists for issues that could be managed by a PCP at a lower cost. They may also overlook preventive measures, resulting in advanced-stage diagnoses that require expensive interventions. The lack of primary care exacerbates overutilization by funneling employees into high-cost healthcare settings unnecessarily. Connecting the Dots: How These Issues Compound Costs The interplay between overutilization and lack of primary care creates a feedback loop that drives up healthcare expenses. Employees without primary care guidance are more susceptible to overutilization, and overutilization further discourages the establishment of primary care relationships due to the complexity and frustration it can cause. This cycle leads to: A Strategic Approach: Investing in Primary Care to Reduce Overutilization To address these challenges, consider implementing strategies that encourage primary care engagement and reduce unnecessary medical services: 1. Promote Primary Care Relationships: 2. Educate Employees: 3. Implement Value-Based Insurance Design: 4. Partner with Providers: Conclusion: A Call to Action As CFOs and HR directors, you have the opportunity to transform these challenges into strategic advantages. By fostering a culture that values primary care and actively combats overutilization, you can reduce healthcare spending while enhancing the well-being of your employees. Investing in primary care is not just a cost-saving measure; it’s a commitment to the long-term health of your workforce. It leads to better health outcomes, increased productivity, and a more sustainable financial model for your organization. It’s time to take a proactive stance. Let’s work together to build a healthcare ecosystem that delivers value, promotes health, and ensures that every dollar spent contributes meaningfully to the well-being of our employees and the vitality of our organizations. Dr. Scott Conard is a physician and healthcare strategist dedicated to improving organizational health outcomes through innovative approaches to employee wellness and healthcare management.

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Revolutionizing Population Health Risk Reduction: A Shift from Historical Costs to Root Causes

Written by Scott Conard, MD When it comes to population health risk reduction, the conversation is evolving. Historically, in the U.S., managing health costs has often been approached from an actuarial perspective—calculating insurance premiums based on past expenses and statistical projections. While this method has served its purpose, it focuses on trailing indicators like price per procedure and frequency of use, leaving the underlying drivers of healthcare costs largely unaddressed. But now, a shift is happening. We’re moving beyond simply accounting for costs to asking critical questions: What’s causing these costs to rise? What are the leading indicators that drive health risks and, ultimately, healthcare utilization? Moving Beyond Actuarial Science Traditional actuarial science calculates costs by factoring in variables like age, geographic location, medical diagnoses, and prescription usage. Insurers then project future costs based on past patterns, layering in adjustments for population demographics. While precise in its methodology, this approach is inherently backward-looking, focusing on how much was spent last year rather than proactively addressing what might reduce future spending. At its core, healthcare costs boil down to two key factors: price and use. But focusing solely on these metrics ignores a fundamental truth: the largest driver of healthcare cost is the risk of illness within a population. A high-risk population will inevitably lead to higher utilization and costs, while a low-risk population is significantly less expensive over time. Identifying and Addressing Health Risks To reduce health risks, we must first identify them. The answer lies in analyzing the population’s disease burden and the lifestyle factors driving it. Experience has shown that approximately 30% of a company’s population will eventually account for the majority of high-cost claims. More importantly, about 70% of those costly claims stem from conditions that could have been mitigated through early intervention and risk reduction. Lifestyle and Emotional Health: The First Line of DefenseMany of the conditions driving healthcare costs are preventable. Addressing lifestyle factors and emotional well-being plays a pivotal role in risk reduction. Strategies include: Navigating Healthcare Smarter The second pillar of health risk reduction involves empowering individuals to make smarter healthcare choices. This includes: High-Quality Care = Lower Costs A critical insight emerges when we focus on proactive health management: the highest-quality care is often the least expensive care. By identifying and addressing risks early, we not only improve health outcomes but also manage costs more effectively. Predictive analytics allow us to foresee who may require expensive treatments like surgery or dialysis, enabling timely interventions that are both effective and cost-efficient. The Future of Population Health This shift in focus—from trailing indicators like price and use to leading indicators like disease risk—represents a fundamental transformation in how we approach population health. By addressing the root causes of illness, promoting healthier lifestyles, and ensuring access to high-quality care, we can achieve significant reductions in healthcare costs while enhancing overall well-being. The path forward is clear: organizations must prioritize proactive health management strategies that address the underlying drivers of risk. By doing so, they can create healthier populations, reduce costs, and foster a more sustainable healthcare system. This isn’t just good for business—it’s essential for the future of healthcare. Dr. Scott Conard is a physician and healthcare strategist dedicated to improving organizational health outcomes through innovative approaches to employee wellness and healthcare management.

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Exposing Hidden Waste: Out-of-Network Payment Schemes

Employer Healthcare Solutions / Converging Health Website

As a senior executive, you’re constantly focused on efficiency, transparency, and maximizing the value of your company’s investments. Healthcare benefits—often one of your organization’s largest expenditures—should be no exception. Yet, many employers unknowingly bleed money due to hidden fees and opaque out-of-network payment arrangements. If you think a polished benefits package guarantees fairness and cost control, think again. Pulling Back the Curtain on Out-of-Network “Savings” ProgramsConsider a scenario: You have 5,000 employees. Your broker partners with a major carrier that promises a cutting-edge out-of-network cost-management program. On the surface, you’re shown impressive statistics: “We saved you X%!” “Your plan saved hundreds of thousands of dollars!” But ask a crucial question: Saved compared to what? Suddenly, the narrative isn’t so clear. One leading carrier’s program, One of the major insurance carriers offers out-of-network “payment integrity” solutions. The carrier presents data showing significant reductions in billed charges—numbers that look like heroic cost containment. Yet, behind these reported “savings,” the carrier often takes a percentage cut for themselves, effectively turning your plan’s supposed cost control measure into a revenue generator for the insurer. Real-World Example: The 13-Hour Office VisitImagine a provider billing over 50 increments of a single 15-minute service in one day—implying a marathon 13.5-hour visit. Under standard Medicare rates, this service might only be worth about $32 each time. Yet the provider’s billed amount was thousands of dollars, with the plan paying only a fraction. On paper, this program would claim massive “savings.” But in reality, the carrier charged the plan a hefty percentage of that “avoided” cost—far exceeding what the doctor actually received. In one particularly egregious case, the provider was paid a mere $61 while the insurer pocketed $3,700 in “fees.” The question executives must ask is: If the insurer knows these questionable billing practices are happening, why don’t they stop it? Quite simply, they profit from the difference. Where the Waste Happens—and How to Fix ItThis kind of wasteful spending arises when employers accept opaque arrangements without fully understanding the underlying payment mechanics. To address this problem, organizations must: 1. Renegotiate During RFPs:Start strong by establishing clear contract terms that prohibit the carrier from earning more than what is paid to the provider. Demand transparency and define “savings” in measurable, meaningful terms. 2. Limit Out-of-Network Services:Consider eliminating or tightly restricting out-of-network benefits. Handle exceptions individually to ensure members get needed care without giving carriers an open invitation to pad their margins. 3. Engage Expert Negotiators:Partner with advisors who understand these complex billing games. They’ll ensure plan language and fee structures minimize the potential for misaligned incentives. Implementing these strategic approaches can reduce your per-employee per-month (PEPM) costs significantly. In fact, by addressing just one out-of-network program, some employers have seen immediate reductions of up to 7.5% of total healthcare spending. Data-Driven ResultsEmployers who actively root out these hidden fees and adopt transparent payment models have achieved substantial cost reductions. Data shows that organizations employing robust payment integrity strategies and strict out-of-network controls can drive down total health plan costs by as much as 15%. Your Next Move: Take Back ControlAs an executive, every dollar counts. In a landscape where healthcare spending spirals ever upward, protecting your plan from hidden charges and self-serving “savings” schemes is critical. Don’t leave your organization’s financial health to chance. Take the first step toward total transparency and meaningful savings. Contact us to learn more and schedule a consultation. Our team will review your existing arrangements, identify hidden waste, and help you negotiate a plan structure that truly prioritizes cost control. Stop letting opaque deals drain your resources—act now and put your company on the path to zero trend. Written by Rob Thwaites

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The Real Enemy in Healthcare Benefits: Fighting Disease, Not Just Managing Costs

Clinical Consulting, Employer Healthcare Solutions / Converging Health Website

By Mike Adams and Scott Conard MD When it comes to healthcare benefits planning, companies often get sidetracked, thinking that the main challenge is controlling costs. But here’s the real truth: the true enemy isn’t high premiums or rising deductibles; it’s the disease itself. Disease is what drives up healthcare costs, disrupts productivity, and takes a toll on both employees and employers. By refocusing our efforts on fighting disease and supporting long-term wellness, we can create a sustainable, effective healthcare benefits strategy that benefits everyone. Empowering Employees to Fight Disease: A Partnership Approach In the fight against disease, employees and employers need to align their efforts. Employers play a crucial role in providing the resources, financial assistance, and tools employees need to manage their health effectively. But it’s not just about giving access to healthcare services; it’s about fostering a proactive health mindset. Employees need to take ownership of their health. This partnership means that while companies provide the tools, employees must also put in the effort to use them effectively. Moving from Transactional to Relational Healthcare One of the biggest obstacles to creating a sustainable healthcare strategy is that too many people still view healthcare as purely transactional. In the traditional model, employees go to the doctor when they’re sick, get a prescription, and call it a day. However, this approach doesn’t solve the root problem; it merely addresses symptoms as they arise. The solution is a shift from transactional to relational healthcare. Just as financial advisors moved from selling stocks and bonds to holistic wealth management, healthcare providers are starting to focus on population health management. This approach prioritizes long-term health and wellness over short-term treatment and one-off doctor visits. Population health management looks at the bigger picture—helping individuals stay healthy and preventing disease from occurring in the first place. The Problem with Cost-Centered Benefits Planning Many companies have relied on brokers, insurance providers, and pharmacy benefit managers (PBMs) to reduce costs. However, focusing only on cutting costs without addressing the underlying issues—namely, disease and lack of preventive care—leads to a broken system. Often, these brokers and PBMs are incentivized by rebates, prescription volume, and other revenue-driven structures. This creates a conflict of interest, where decisions may prioritize profit over the well-being of employees. Year after year, this results in a steady increase in healthcare costs, with the average annual rise in premiums hovering around 5% to 10%. To break this cycle, companies must shift their focus from short-term savings to addressing the real issue: preventing and managing disease. Only by aligning incentives toward long-term health outcomes can companies sustainably control healthcare costs. Disease is the Enemy: The Path to Sustainable Healthcare Benefits The true solution lies in approaching disease as the primary challenge. When employers focus on health improvement instead of just managing expenses, they can create a benefits plan that is both cost-effective and impactful. This involves: When employers and employees work together, supported by a healthcare benefits plan that prioritizes fighting disease, the benefits extend beyond the bottom line. Healthier employees lead to a more productive, engaged workforce, reduced absenteeism, and ultimately, lower healthcare costs. Building a Healthier Future: Fighting Disease Together By recognizing disease as the real enemy, companies can begin to reshape their healthcare benefits strategy in a way that truly serves employees’ needs. Empowering employees to take charge of their health, focusing on preventive care, and partnering with providers who share a commitment to wellness can transform healthcare from a transactional system to a relational, proactive one. Disease is the real enemy in healthcare benefits planning, and by uniting against it, we can create a system that doesn’t just manage costs—it improves lives. Let’s move past broken incentives and focus on what truly matters: building a healthier, more resilient workforce.

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Health Risk Engagement Strategies: Driving Change Before It’s Too Late

Clinical Consulting, Employer Healthcare Solutions / Converging Health Website

For executives managing health plans, one of the biggest challenges is engaging individuals who are in the early stages of disease risk progression but feel perfectly fine. These individuals, often unaware of the looming consequences, present a significant opportunity—and a unique challenge—to healthcare strategies. Once someone becomes symptomatic, behavior change is much easier; they’re desperate to feel better. However, by then, it’s often too late to reverse the damage. Instead of cheaply and effectively addressing the issue, we’re left managing a chronic condition for the foreseeable future. The key question: How do we engage people early, before symptoms appear, and inspire them to take meaningful action? This is where cutting-edge health risk engagement strategies, driven by predictive data and real-time activation technology, become a game-changer. Our algorithms utilized by the MyPHA team is your solution to this problem. Shifting the Paradigm: From Retrospective Cost Analysis to Proactive Risk Engagement The status quo in healthcare analytics relies on retrospective cost-based reporting. Most organizations are equipped with tools that answer questions like: These data points are useful for understanding the past but do little to impact the future. They focus on individuals who are already in the high-cost, high-risk category—individuals whose health trajectory has already caused irreparable harm. What’s missing from this equation is predictive engagement—the ability to identify the individuals who are trending toward risk before they become symptomatic and to intervene effectively in real time. Consider this: 70% of today’s high-cost individuals won’t be the same people next year. If you’re only looking at historical data, you’re blind to the emerging risks within your population. Why Predictive Engagement Matters Let’s look at the CFO perspective:“I’ve already got reports. I know I have 384 diabetics and 264 people with hypertension. I have programs in place for them. Why do I need anything more?” Here’s why: Traditional reports don’t tell you who your next high-cost individuals will be, nor do they provide actionable insights about how to prevent them from becoming costly. They miss the nuances of health risk drivers—factors like comorbidities, social determinants of health, geographic influences, and behavioral patterns—that determine whether an individual can avoid a serious medical event. Predictive engagement goes beyond labels and costs. It examines the whole person—integrating data about: This holistic approach enables organizations to answer the most critical question: How can we prevent costly and emotionally taxing events before they occur? Engagement, Activation, and Support: The Pillars of Early Intervention Effective early intervention requires a three-pronged approach: For employers, early intervention is not just a health imperative; it’s a financial one. But this requires a shift from reacting to past costs to proactively managing future risks. By investing in predictive analytics and engagement technology, organizations can reduce costs while improving outcomes for individuals. Conclusion: The Future of Health Risk Management The old approach—focusing on retrospective cost and disease management—is no longer enough. Health risk engagement strategies must evolve to focus on real-time insights, whole-person care, and proactive prevention. The stakes are high, both for individual lives and corporate budgets. But with the right strategies, tools, and commitment, we can make a measurable difference—shifting the focus from managing disease to building health and resilience. As executives, the question isn’t, “Why should I care about your data?” It’s, “How can I afford not to?” By embracing proactive engagement, activation, and support, you can ensure your organization is leading the way in creating healthier, more productive populations. That’s a future worth investing in.

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