Medical claims of at least $1 million are on the rise. Healthcare executives can be forgiven for reading that and thinking it's a giant headache because there is a wrinkle: The small number of large claims represents an opportunity to avoid the sort of financial losses high-dollar claims tend to create.
Let's go through the statistics. The number of patients with million-dollar-plus claims rose 87 percent in three years, from 104 in 2014 to 194 in 2017, with most charges ranging from $1 million to $1.5 million, and totaling over $935 million in paid charges, according to Sun Life Financial's 2018 High-Cost Claims Report.
The report, based on analysis of Sun Life's database of more than 62,000 medical stop-loss claimants from 2014-2017, shows that high-cost conditions totaled $6.9 billion in paid charges over the four-year period. Cancer remains the costliest medical condition, with $798.7 million in reimbursements to self-funded employers during that time.
Why stop-loss claims are an opportunity
Employers that self-ensure in healthcare (and elsewhere, for that matter) have an 85 percent chance of seeing a high-dollar, stop-loss eligible claim in any given policy year -- and that is telling because employers who self-insure their health plans use stop-loss coverage to protect themselves against excessive financial losses from high-dollar claims.
Dan Fishbein, MD, president of Sun Life Financial U.S., said the growth of million dollar-plus claims is due in part to new treatment options coming to market, and existing treatments getting approved for expanded use.
Now, it's worth highlighting the finding that patients with claims more than $1 million represented only 2 percent of the total number of stop-loss claims from 2014-2017, but about 20 percent, or nearly $600 million, of the total $3 billion in stop-loss reimbursements.
What's more, the two highest claims for a patient in a single policy year were for metabolic/immunity disorder (hereditary angioedema, a severe, recurrent swelling of various parts of the body) in 2016, with a total of $6.7 million in treatment costs; and hemophilia/blood disorder with a total treatment cost of $5 million in 2017.
Here' the rub: Healthcare organizations can at least begin to implement strategies that address those two conditions.
Other areas to improve now and in the future
While metabolic/immunity disorder and hemophilia present the two most important areas to focus on today, there are of course others healthcare organizations should understand.
Injectable drugs had an impact: In 2017, four of the five costliest injectable drugs -- used to treat cancer or related conditions -- accounted for about $45 million, or 24 percent, of the total $186.3 million spent on injectable drugs that year.
And looking to the future, researchers identified gene therapy as an emerging treatment that's gaining more attention and utilization -- one that may pave the way to treat costly genetic disorders like hemophilia.