In its fourth annual Top Ten Catastrophic Claims Conditions report, Sun Life Financial U.S. highlights the critical factors impacting medical costs. The report compiles the costliest medical conditions covered by Sun Life stop-loss insurance from 2012 to 2015, and explores emerging trends with the goal of helping brokers and self-funded employers understand and mitigate their risks.
During the four years of the study, billed charges from medical care providers totaled $9 billion. Self-insured employers paid $5.3 billion of those billed charges after discounts. were applied, and received $2.3 billion in reimbursements through stop-loss protection.
The report shows that million-dollar-plus claims continue to trend up, with an increase of 25 percent compared to last year. Severity continues to be a factor, with less than 2 percent of million-dollar plus claimants accounting for a disproportionate 18.5 percent of overall stop-loss claims reimbursements, representing $431.2 million. Over the four-year period, the average amount paid by an employer on a claim above $1 million was $1.45 million, which was reduced to $491,000 after applying the average stop-loss claim reimbursement ($962,000).
Cancer continues to dominate the top of the list (number one and number two) with $618 million in stop-loss reimbursements, accounting for more than one-quarter (26.6%) of total stop-loss claims. Of the various types of cancer identified in the report, breast cancer accounted for 13.6% of the total reimbursements for this condition. Cancer is also a leading million-dollar condition – it's in the number-two spot after premature infant and liveborn complications.
The report cites intravenous medications as a key driver of rising cancer costs and provides an analysis on the top twenty intravenous medications in 2015.
Chronic/end-stage renal disease held steady in the number-three spot on the list, accounting for over $369 million in combined first-dollar claims and stop-loss claims reimbursements. Although the average treatment cost for claims associated with kidney disease has gone down 21 percent over the last four years, the high incidence rate of the condition contributes to its ranking. One in three Americans are at risk for kidney disease, with diabetes and hypertension as leading causes. The report highlights how improvements in cost management and increased use of transplants might continue to reduce the costs associated with this condition over time.
This year, the report also takes into account how geographic location impacts the costs for medical care. The East South Central, Mid-Atlantic, and Pacific regions were the most expensive areas in which to experience a catastrophic condition, with costs above the national average -- 27, 22, and 19 percent, respectively.
See the slides to view the full list of Top 10 Catastrophic Claims Conditions.