(NEW YORK) 360Dx – Healthcare costs for Quest Diagnostics have historically risen approximately 5 percent to 6 percent a year, but in 2017 the company held premiums flat for all employees for the first time in many years.
That shift in the trend of healthcare spending came about through an initiative that combines wellness diagnostics with telemedicine, population health analytics, and healthcare fraud screening, company executives said.
Quest is now offering other employers and partners tools and services designed to achieve similar results, according to Jay Wohlgemuth, senior vice president for R&D and chief medical officer at Quest.
For Quest the efforts to internally scrutinize healthcare costs began in 2009, when the company realized that together with its employees it was paying approximately $400 million annually on healthcare. In addition, frontline employees earning in the range of $30,000 to $40,000 annually were paying as much as 25 percent of their take-home pay on healthcare.
"Healthcare costs had become the number one negative issue in our engagement surveys within the company," Wohlgemuth said.
Wohlgemuth likens Quest's effort to control its own healthare costs, started several years ago, to recent announcements to take control of healthcare spending by other large employers, such as the healthcare venture formed by Amazon, JPMorgan Chase, and Berkshire Hathaway.
"We love our partners like [insurers and pharmacy benefit managers] but they are not at risk, and the reality is they don't manage healthcare costs like it's their money because it's not," Wohlgemuth said.
The cornerstone of Quest's efforts to control healthcare is an employee wellness screening program that the company introduced approximately 10 years ago called Blueprint for Wellness. That program includes a health risk questionnaire, basic height, weight, and waist circumference measures, a blood draw and a set of approximately 30 standard annual diagnostic tests, such as measurements of lipids, hemoglobin A1C, complete blood count, and renal function, according to Wohlgemuth.
While the Blueprint for Wellness provides employees with a report that identifies risks and which measures were outside of recommended ranges, employees did not always use the report to follow up and get appropriate care, according to Wohlgemuth. "We weren't at that time providing the solution. We were identifying the problem for people and then allowing them to go back to a doctor and figure it out."
Quest began partnering with PWNHealth to offer employees Physician Health Information Sessions, telemedicine sessions that enable employees to speak to a physician who can help employees interpret their test results and refer them to an in-network physician for further testing or follow-up treatment.
"The physicians have all the test results in front of them and they have been trained on the Blueprint for Wellness," Wohlgemuth said.
An employee in Southern California whose BluePrint for Wellness report indicates potential kidney problems, for example, could be referred through a Physician Health Information session to an in-network, highly rated nephrologist in their area, and the telemedicine physician can help schedule an appointment, according to Wohlgemuth. Approximately 200 PWNHealth physicians are trained on evaluating the Blueprint for Wellness as part of the Quest Physician Health Information Session program, he said.
The telemedicine services, similar to Quest's push to open draw stations in Walmart and Safeway stores, is part of an overall effort to make healthcare more accessible, Wohlgemuth said.
In addition to the telemedicine service, Quest has used HIPAA-compliant population health data about its employee population to develop programs that target key disease areas affecting the employee population, Wohlgemuth said.
"Renal failure is a very obvious target because we know in our population right now how many people we have who have stage 1, 2, 3 and 4 renal failure. We know what the costs are of stage 4 renal failure, which is ultimately hemodialysis or renal transplant. The costs in that bucket can be up to $177,000 a year," Wohlgemuth said.
The company has also partnered with Omada Health for an employee diabetes prevention program. Omada Health offers a digital behavioral science program to help people change their habits and improve their health status.
Quest pays Omada through a model that based on pounds lost by employees, Wohlgemuth said, noting that weight is closely correlated to healthcare costs in diabetes and several other disease areas.
"At Quest, in our cohort, we had about a 4 percent, on average, body weight loss for those who participated in the program. Four percent doesn't sound like a lot but remember it's a range of people, so some people lost 50 pounds or 25 pounds," Wohlgemuth said. "In that group, when you have a 4 percent loss in body weight that calculates to a 38-percent three-year reduction in the risk of developing diabetes on average."
In addition to an increased emphasis on targeted medical care, healthcare cost containment at Quest involved scrutinizing claims data for potential fraud and abuses, according to Wohlgemuth.
"When we started to look at claims data in a detailed way, we began to find a lot of unnecessary costs," Wohlgemuth said.
Quest's health plan operations group worked with the company's corporate health insurer Aetna to review HIPAA-compliant claims data and identify excessive charges, Wohlgemuth said. One ankle surgery, for example, was billed at $260,000. The charge turned out to be an error, but Wohlgemuth credits the increased scrutiny of heathcare claims with contributing to holding down healthcare costs.
Commercializing Cost Containment
Quest is beginning to offer the services that it has used to control its own healthcare costs to the hundreds of employers that use Quest's Blueprint for Wellness within their own companies. The Physician Health Information Session telemedicine services, offered in partnership with PWNHealth, and a diabetes prevention program offered in partnership with Omada Health are among the first services that Quest is offering to other companies. In addition, a couple of employers have already begun mirroring Quest's approach to targeting renal disease through diagnostics and intervention, according to Wohlgemuth.
In situations when employers have their own diabetes prevention or smoking cessation program, the Physician Health Information Sessions telemedicine services can be adapted to connect to companies' own disease-specific employee health programs, Wohlgemuth said. This is key, he noted, because some companies may initially view telemedicine as competitive to their own healthcare offering, but that is not the case.
"About 20 percent of the [telemedicine] calls result in new healthcare relationships for the employee. What [companies] are starting to see is that what we are doing is actually a connection to their services. These doctors are getting people engaged," he said.
In addition to offering cost containment to employers, Quest is beginning to offer these same programs and strategies to partners, including insurers and pharmacy benefit managers. The company is currently in discussions with health services firm Optum to roll out a telehealth solution that will steer employees to Optum's services, Wohlgemuth said, adding that details on when that might roll out were not yet available.
Quest has published several research studies based on results of the population health programs it has implemented with its own employees, Wohlgemuth said. A recent study, published in Diabetes Care in June, indicated that elevated hemoglobin A1c levels were associated with diabetic incidents within four years based upon a cohort of 34,676 employees and spouses who participated in an employee wellness program in 2012.
Currently, Quest is working on assembling a study that will quantify overall effectiveness of using telemedicine service among employee groups, Wohlgemuth said.
Quest's employer healthcare cost containment efforts tie together several key strategies that are central to the company's overall approach to changes in healthcare, according to Wohlgemuth.
"Essentially, what everyone in healthcare needs to do now is practice population health, which is analyze a population, design intervention, and when you design intervention, it has to be consumer friendly. If it's not, people don't engage," he said.