Amid high-cost claims from chronic illness, how HR can respond

A small share of individuals account for a disproportionate amount of total healthcare use and spending, according to a new EBRI report.

These high-cost claimants typically have complex and intensive medical needs, often related to chronic conditions. However, the definitions of high-cost claimants vary, as they commonly rely on spending thresholds or percentile cutoffs.

The study focused on individuals with employment-based health benefits between 2018-22 who had multiple medical conditions. Researchers examined trends in the share of enrollees exceeding various annual healthcare spending thresholds and spending patterns. Among the key findings in the report:

• One percent of enrollees accounted for 29% of spending, which was found in the first fact sheet in the series. Although the average spending for this group was $206,000 per person and median spending was $150,000, everyone in this group used at least $96,000 in healthcare services.
• The share of enrollees spending $100,000 or more annually remained stable. It increased slightly from 0.92%-.94% from 2018-22.
• Approximately 0.2% of enrollees spent $250,000 or more per year throughout the 2018-22 period.
• The share of people spending $500,000 or $1 million or more annually remained consistent across the years.
• The proportion spending $2 million or more increased from 0.0012%-0.0014% from 2018-22, peaking at 0.0016% in 2020. Researchers said COVID-19 may have driven this increase.

See also: Which workers are more likely to develop chronic diseases?

In 2022, the most frequent diagnoses among individuals with healthcare costs of $100,000 were heart disease, nervous system disorders, respiratory conditions, musculoskeletal disorders and hypertension. The prevalence of these conditions remained mostly stable between 2018-22.

“These findings highlight the persistent concentration of healthcare spending among a small share of enrollees in employment-based health plans,” researchers concluded. “Despite some year-to-year variation, the proportion of individuals exceeding high-spending thresholds has remained relatively stable over time, and those with the highest costs continue to be predominantly affected by chronic conditions.”

HR and benefits leaders, insurers and policy-makers, they write, must all understand the “characteristics and health burdens of high-cost claimants.” Doing so enables them “to design targeted strategies for care management, cost containment and improved health outcomes.”