Looking Beyond COVID: The Impact on Healthcare Costs and Premiums

The current environment has created uncertainty for payers, as the cost of coronavirus-related claims increases while membership enrollment decreases with lower employment levels. The ripple effect from increased premiums will soon be felt by employers. It’s estimated that healthcare benefit costs could jump by as much as 7 percent in 2020 according to a recent actuarial analysis of self-funded employers by Willis Towers Watson. The global advisory and risk management company projected an increase in addition to the 5 percent increase projected before the pandemic. As you plan for next year, focus on baseline opportunities today that can pay dividends later.

Finding a (digital) silver lining

Significant uncertainty still surrounds the pandemic as insurers work through actual costs and set rates for 2021. Most carriers picked up the tab for COVID-19 out-of-pocket testing and treatment costs, but there were cost savings from decreased utilization as non-emergency procedures were canceled or postponed. Amid these turbulent times, one sure bet is the explosion of digital health and the opportunities it presents.

The pace of digital health transformation in the wake of COVID-19 is accelerating and pushing the tipping point for digital therapeutics (DTx) adoption ever closer. In the face of new limits on access to traditional care, payers and employers have turned to new remote-care options, including wearables, telehealth and DTx.

The increased demand for remote healthcare also presents an opportunity for payers and employers to assess and reap the savings potential that digital therapeutics represent. This is particularly true as DTx companies ramp up investments and regulatory agencies streamline the approval process for faster time-to-market.

Leveraging DTx for the bottom line

Digital therapeutics enable new cost-saving potential for payers and employers, particularly for cost centers such as musculoskeletal conditions, the leading cause of disability in the workplace. As you plan your 2021 strategy, here are three points to consider from a cost standpoint:

• Low-cost, high-impact areas such as MSK conditions represent key cost-saving opportunities, with up to 40% of your population affected
• Source solutions that can be implemented off-cycle and integrated with existing offerings on a pay-per-active-user cost basis
• By providing the right benefits you can reduce waste, offer an alternative for costly, over-utilized surgery and injections, and provide an ROI between 1.5x and 3.0x within the first year

The future is digital, and moving rapidly toward evidence-based, scalable, more powerful DTx solutions to improve quality of care, improve outcomes and reduce spend.

Building momentum today for 2021

The social and economic implications of the COVID-19 pandemic, combined with healthcare system disruption, presents one of the most important opportunities for payers and employers to embrace digital health. Strategic decisions made by HR and benefits managers in the next few months could impact the success and cost-effectiveness of wellness programs for years to come. Ultimately, the right choice is based upon where a DTx solution fits strategically within your wellness or plan offerings for the greatest enrolled population benefit, maximizing engagement and delivering measurable results.

To learn more about making a positive change for your population, schedule a brief intro call or demo with our team.