An Effort to Taper the Exponential Rise in Healthcare Costs

Personify Health, the first and only platform company to bring health, wellbeing, and navigation solutions together, has officially published results of its new independent actuarial study, which would dig into how key company programs drove significantly lower healthcare costs for members compared to the same-year market average. According to certain reports, the study was conducted by Wakely Consulting Group and it showed that Personify members in elected programs had 23% lower allowed costs vs. market average, roughly translating to $762.96 per employee per year. This also included the member cost-share, along with risk and geography adjustment. More on the given development would reveal Personify’s timely and targeted AI-optimized member outreach, payment integrity capabilities, advocacy, and coaching program contributing towards lower risk-adjusted medical costs for members across a range of care settings. In a more concrete sense, such an improvement included 34%, 27%, and 10% lower costs for inpatient, outpatient, and professional services, respectively, as compared to risk-adjusted claims in the same geographic regions. Here, Wakely’s rigorous independent analysis pitted Personify Health medical claims from 2022 against comparable market data from the same time period, sourced from the Merative™ MarketScan® Research Database. Anyway, beyond the findings we referred to, the study also discovered 14% lower total medical costs (risk-adjusted) across members who exceeded $100,000 in medical claims. The claims in question covered members up to 64 years of age, with their claims also included and flagged to further evaluate the impact of Personify’s care management. Another detail worth a mention is rooted in the way Merative MarketScan® dataset was restricted to members from employer groups with complete medical and mental health claims data present. However, the analysis excluded pharmacy claims.

“Escalating health costs are putting the squeeze on employers and staff. It’s critical that they have the means to reduce spend while still offering the benefits that provide quality, holistic support. That’s where Personify Health comes in,” said Chris Michalak, CEO of Personify Health. “Building on previous research, the Wakely analysis proves that our care management and cost containment programs are highly effective across a range of areas responsible for the biggest spend. Combining hundreds of experts with the scalability driven by AI, we’re solving a big industry challenge and making a real difference for our clients and members.”

To understand the significance of such a development, we must take into account some previous studies, where we learned that U.S. emergency department treatment costs increased from $54 billion to $88 billion between 2012 and 2019, a staggering annual growth rate of 5.4%. Bucking the stated trend, though, was Personify Health, whose members saw 17% lower emergency room costs vs. market average in the same year.

Beyond the results, we must discuss a little about which key factors the new study actually focused upon. You see, it evaluated Personify Health’s cost containment services, which include payment integrity; fraud, waste, and abuse reviews; and out-of-network negotiations. Furthermore, it unpacked the company’s care and condition management solution. In case you weren’t aware, this particular solution features 500+ associates including nurses, medical social workers, dieticians, pharmacists, licensed therapists, and coaches, all of them coming together to offer members a high level of support along their health journey, thus complementing Personify’s digital offerings.

“Historically, high-cost, high-need patients accessing inpatient care have represented the largest driver of health care costs in commercial insurance – underscoring the need to encourage the utilization of care settings that provide better outcomes,” said Dan Mendelson, CEO of Morgan Health, the JPMorganChase business unit focused on improving the quality, equity, and affordability of employer-sponsored health care. “By integrating care management and cost containment programs, employers can help empower patients to access high quality care at a more efficient cost.”

The study also delivers a rather interesting follow-up to one PwC Health Research Institute’s study, which projected 7% year-over-year (YOY) medical cost increase for employers this year.