'High cost claimants' are biggest driver of healthcare costs for many employers, study shows

Costliest claims include cancer treatments like chemotherapy, as well as other conditions.

High-need individuals who cost the public or private sectors $50,000 or more in a single year top the list of the most expensive sources of healthcare costs, according to a study released by the American Health Policy Institute.

Dubbed "high cost claimants," they're at the top of a long list of cost drivers, surpassing medical inflation, pharmaceuticals, and any specific disease or condition. Citing the National Business Group on Health, the study's authors said that high cost claimants are the number one cost driver for 43 percent of large employers.

AHPI surveyed 26 large employers on their claims data and found that the average high cost claimant costs $122,382 annually, about 29 times that of the average member; as a group, they comprise 1.2 percent of all members, and 31 percent of total spending.

Fifty-three percent of the healthcare costs for high cost claimants are for chronic conditions, while 47 percent are for acute conditions. The costliest claims include cancer treatments, heart disease, live birth and perinatal conditions, and blood infections.

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A similar phenomenon can be found in government programs, specifically Medicare and Medicaid, the authors said. Between 2009 and 2011, about 1 percent of Medicaid beneficiaries accounted for 25 percent of costs, while the costliest 5 percent of beneficiaries accounted for 48 percent of costs. In the Medicare population, spending is less concentrated, as older patients are more likely to utilize healthcare services across the board; but even still, the top one percent accounted for 14 percent of program costs in 2010, and the top five percent for 39 percent of costs.

The authors said they chose to examine the topic because they expect the financing of healthcare in the United States to "hit the wall" between 2025 and 2030. In that period, they said, a variety of pressures on the health sector will reach a tipping point, presenting significant challenges to both private and public sector health financing. For example, Medicaid costs are expected to surpass $1 trillion per year in 2025, while the worker-to-retiree ratio will dip below three-to-one.

Also by 2025, 53 percent of private sector employees who are heads of families will face an average premium and deductible that will consume 9.5 percent or more of the family's income, therefore classified as "unaffordable" under the ACA. By 2028, the Medicare HI trust fund will be depleted and by 2031, the Cadillac Tax will hit the average value plan, the study said.

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Because of this, the authors advocate for both the federal government and private sector taking a careful look at high cost claimants, establishing new initiatives and delivery models to survive the coming challenges.

Public and private sectors, they said, should mine health data to target certain chronic conditions, and engage beneficiaries to be active plan participants. Implementing wellness programs with a clinical orientation would be helpful, the study said, as would developing predictive biometric screening profiles that are compliant with the Health Insurance Portability and Accountability Act. Care management that targets the costs of particular diseases or procedures could also play a role, they said.

"These strategies are not a panacea, but they are a start," the authors wrote. "It is clear from the overall high costs of high cost patients that this will be a crucial area for addressing the financing challenge of our healthcare system in the years ahead."

Twitter: @JELagasse