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Truven Health Analytics Study Identifies Leading Drivers of Employer Health Costs

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ANN ARBOR (WWJ) – Twenty specific “medical episodes” account for 41 percent of overall growth in employer healthcare spending, according to a new study from Ann Arbor-based Truven Health Analytics.

The study examined medical claims data for over 8 million commercially insured individuals under the age of 65 from 2006 to 2011, including those covered by large employers who are self-insured. It found that during the five year period, employer healthcare costs increased by an average of 4.3 percent per year, driven largely by spending on preventive health services; osteoarthritis (except spine); multiple sclerosis; childbirth (Cesarean section); and complications of surgical and medical care.

The majority of spending growth was driven by an increase in the cost per case, primarily attributable to medical and surgical procedures. Other cost drivers that show up in the data are the steadily increasing cost of specialty drugs and the ongoing obesity epidemic, which is an underlying driver of many of the diseases noted in the report.

“On the positive side, we find that a great deal of employer healthcare spending growth is being driven by preventive services. However the growth is big enough to raise questions even there,” said Bill Marder, Truven Health Analytics senior vice president and an author of the study. “Other cost-drivers that show up in these data, such as the obesity epidemic, are creating real challenges for employers as they try to balance the cost-quality equation.”

Additional findings in the study include the following: • Spending growth is being driven mainly by outpatient medical services (inpatient services, while expensive, affect fewer people) • Musculoskeletal conditions are the costliest and most rapidly growing group of diseases • Complications of surgical and medical care are occurring more frequently in part due to the growing use of surgery to treat orthopedic conditions • Preventive health services such as general medical exams, vaccinations, and cancer screening are being used by a growing percentage of plan members

The results of this study were recently presented in conjunction with the National Business Group on Health to an audience of large employers and health plans.

“This research represents a breakthrough in our understanding of not only which services are being provided, but why those services are being obtained,” said Helen Darling, president of the National Business Group on Health. “By further analyzing the drivers behind healthcare utilization among private pay patients, we are able to help our members focus their efforts on providing the most effective care possible to their employee populations.”

The Truven Health MarketScan Research Databases, which contain de-identified healthcare claims data reflecting the real-world medical care of over 180 million unique patients across the U.S. since 1995, were used to conduct this analysis. Each person’s health insurance claims were attributed to specific diseases using the Truven Health Medical Episode Grouper (MEG), which includes an expansive classification of 560 conditions.

To read the complete study, follow this link: http://interest.truvenhealth.com/forms/EMP-201306CostDriversResearchBrief

Truven Health Analytics delivers unbiased information, analytic tools, benchmarks and services to the healthcare industry. Hospitals, government agencies, employers, health plans, clinicians, and pharmaceutical companies have relied on its solutions for over 30 years. For more information, please visit www.truvenhealth.com.

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