In a review of claims data for almost 100 Mercer employer clients, representing approximately 2.5 million members, we found that the Mental Health and Substance Abuse per member per year cost trend (for allowed charges) rose nearly 11%, in stark contrast to overall medical PMPY trend of 3.5%. And while MH/SA claims represent a small percentage of the overall medical claim costs (4%), a spike in the cost may be a symptom of a larger issue – and an opportunity for employers to get out in front. What’s driving this trend?
- More people – 3.4% increase in the MH/SA unique claimants.
- More claims per person – 7.5% increase in MH/SA claims per claimant.
- Fewer claimants are using out of network (OON) MH/SA providers but the total OON visits are increasing by 7.5% -- and the average allowable amount per visit is twice as high for OON providers ($2,097) than for in-network ($1,019).
One factor behind the increase in OON utilization may be adult dependents added under the ACA, who tend to live outside the primary member’s area and use OON services at a higher rate.
But the biggest driver of increased OON utilization may simply be limited access. Mental Health Parity has increased both visibility and pressure to increase access. We are seeing members access care more than ever before. And more employers are recognizing the importance of behavioral health in the benefit offering; they are increasing the number of EAP visits allowed and adding onsite counselors. Some specialty areas in particular experience access issues, such as psychiatry – both adult and child/adolescent.
The shortage of providers has led a growing number to choose not to join networks -- because they don’t have to. With access to in-network providers limited not just in rural markets but also in busy urban areas, more plan members may be making a choice to use out-of-network providers, albeit at a lower benefit level.
What are the possible interventions?
- If the underlying cause is access, collaborate with your networks about their strategy for contracting with providers; promote and leverage the EAP; and explore mental health resources available through telemedicine vendors.
- If the underlying cause is literacy, focus on member education, particularly if there are patterns by region or for covered adult dependents where in-network providers may not be evident or readily available. Also promote EAP and other resources that may be available to support members with mental health, substance abuse and/or stress related needs.
- Engage care management and advocacy support vendors in promoting in network and EAP resources; also validate their attention to the co-morbidities of mental health in their engagement contacts.
But before you start down any of these paths, look at your data to find out:
- Is your MHSA spend increasing?
- Is it MH or SA or both driving the increase in trend?
- Is it unit cost, number of claimants and/or number of claims per claimant?
- Are there patterns by location, job type or relationship to the covered employee?
- Are current resources such as the EAP being optimized?
- Are there employee surveys that suggest high rates of stress?
The more answers you have, the better equipped you will be to develop an approach that strikes the right balance between what people need and how the plan meets those needs.
Some of the world’s most notable businesspeople -- CEOs from Barclays, eBay, Cisco, Marriott, UBS, and Mercer -- gathered Wednesday in a powerful kick-off breakfast at the World Economic Forum Annual Meeting in Davos, Switzerland, delivering a strong message about one of the greatest opportunities for global economic development and corporate growth: Women. The event -- “The Role of Men: Leading the Charge Together,” hosted by Mercer’s When Women Thrive global initiative for action -- was designed to focus on men's roles in increasing gender diversity in the workplace.
“Men have a unique opportunity in this as we still make up 80% of the executive ranks and even more than that at the CEO level,” said Julio A. Portalatin, Mercer President & CEO. “We have a unique obligation to be out in front on growing women in the workforce. It’s not a ‘women’s’ issue. This is a workforce issue.”
At the event, Mercer launched a preview of the firm’s second annual When Women Thrive Global Report, to be released on January 27. The report -- the most comprehensive and predictive of its kind -- forecasts women’s workforce representation globally, highlighting major pipeline risk to future progress in the workplace, and shows regional rankings for executive involvement, pay equity, employee benefits, women’s financial education, and more.
Be sure to register for a webinar (Jan. 27) of key insights and findings here.
Recent findings from Mercer’s US book-of-business health benefits database — Mercer FOCUS — show that nearly 70% of employers’ total combined medical and pharmacy cost trend of 3.1% was attributable to both specialty and non-specialty pharmacy increases. In fact, even for employers with negative combined medical and pharmacy claims cost trend, this pharmacy trend is nearly 8%. Mercer FOCUS data shows that employers materially offset this rising pharmacy trend with very moderated cost and utilization increases in every other service category.
These findings, which reflect very recent claims data (paid through September 2014) for more than 3 million active employees and their families across many carriers and employers, are echoed in a recent Wall Street Journal article, Prices for Prescription Medicines Rose How Much Last Year?
Fortunately, there are steps employers can take to restrain cost growth. Here are just a few of Mercer’s suggestions:
- Determine whether specialty medications are best covered under your medical or pharmacy programs and take steps to steer members to the most appropriate source.
- Assess the impact and ROI of current utilization management programs — particularly for specialty drugs.
- Consider various disease-specific support programs that may reduce costs.
- Check that all compound medications require prior authorization and that both quantity and dollar value limits are in place.
This is one of those times when you want to be an early adopter. Waiting to take action may cost you.