Friday, Sep 29, 2023
What Would You Do with a Trillion Dollars?
Amy WykoffChief Product Officer, Nomi Health
One trillion dollars - that’s more than the US spends annually on K-12 education, FEMA relief, plus agriculture and space research, all combined. Not to mention, you would still have 163 billion to spare.
A trillion dollars is also the amount that is wasted each year on invented complexities in healthcare every single year.
This colossal waste is a major contributor to the healthcare crisis in America. Millions of Americans struggle to afford essential care, healthcare providers are bogged down by cumbersome paperwork and flawed processes, and employees with high deductible plans find themselves bearing the brunt of rising costs. How can we untangle this web of inefficiency and enhance the quality of care? The good news is that there are steps we can take to achieve substantial savings in a relatively short time frame.
Using Analytics to Identify High Cost of Complexity
Healthcare generates an enormous amount of data every day, but being equipped with raw data is not enough. With 70% of benefits leaders stating that measuring program efficiency is a challenge, the ability to ask the right questions and quickly get the right answers from your data is the difference between swallowing another massive rate hike and managing costs. Today's benefits leaders require an analytic foundation built to ingest diverse data sources and provide invaluable insights into the impact of medical services, pharmacy utilization, Social Determinants of Health (SDOH), and third-party wellness applications on overall employee health outcomes.
Going Direct Means Direct Savings
Healthcare costs have been soaring for the better part of two decades. Over the last 20 years, healthcare services have outpaced inflation and wage growth by well over 100%. High-cost procedures through direct agreements can reduce employer expenses by 30-40%. There is substantial variance between systems who deliver the same quality of care, employers who have leveraged direct contracting with benefits plan designs that drive members to the right site of care are achieving as much as a 400% savings on episodes of care.
Finding the Right Pharmacy Benefit Manager (PBM)
In 2022 alone, the retail price of 1,200+ mediations increased by an average of 32%, outpacing inflation by 24%. The status quo is not sustainable. Progressive employers are leveraging a combination of transparent PBMs, Specialty Optimization Programs and Direct Generic solutions to cut the curb of uncontrolled expenses. In a recent case, one employer was able to save 34% by switching their PBM, leveraging international sourcing options, and deploying a direct generic program for maintenance medications.
The Road Ahead
Reclaiming a trillion dollars in wasted healthcare spending is an ambitious goal, but it is one that is within our reach. With a data-driven approach, commitment to transparency, and focus on value-based care, you can chip away at this colossal waste, reclaim your dollars, and reinvest where it really counts. So, what would you do with a trillion dollars?
About the Author: Amy Wykoff is a Public Sector Executive with a track record of building product companies to meet the unique challenges facing governments worldwide. She is currently the Chief Product Officer at Nomi Health, a nationwide healthcare programs and payments company rebuilding the U.S. healthcare system to run at half the cost.