Faced with an unsustainable healthcare cost increase and spending, Houston dove head-first into a new strategy to create a more sustainable future, according to a Benzinga report.
The program they developed saved $42 million in healthcare costs over three years and lowered healthcare spend to 1.1 percent increase year-over-year, instead of the 10 percent predicted increase. Here are five things to know about their strategy:
1. The city implemented a benefits strategy focusing on value over volume.
2. The health plan focused on prevention and wellness, with a robust wellness program that included biometric screenings, Health Risk Assessment Requirements and other wellness activities. Employees that didn't participate in the program had a surcharge added to their monthly premiums, and those that did received discounts.
3. The city set up a limited Accountable Care Organization network for benefits that had an open access plan and high deductible plan; 75 percent of the members enrolled.
4. The city was also focused on using generic drugs, which were used in 87 percent of the cases, and implemented disease management programs for people with chronic diseases through medication adherence and compliance.
5. Nurses regularly follow-up with chronic disease patients and provided some medications at $0 copay to improve adherence and compliance. As a result, the city had savings on emergency room costs.
The cost and spend was higher during the first year was higher because of the risk screenings to identify patients with chronic conditions that had gone untreated, but during the second and third years the city saw substantial savings. The average patient bed days decreased by 29 percent in the past four years, and ER admissions decreased 9 percent in the last three years.