"Cost Containment, Employers, and the Diabetes Epidemic," Healthcare and Cost Containment Newsletter, Issue #4

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The U.S. confronts a diabetes epidemic. For employers, the growing diabetes population creates significant expenses. In response, effective digital-powered platforms to reduce treatment costs have emerged. This article discusses the key criteria employers should consider when deciding among diabetes-treatment platforms.

$80 Billion in Costs

Costs: The American Diabetes Association (ADA) estimates that in 2017, the U.S. workforce included 8.1 million workers diagnosed with diabetes leading to over $50 Billion in increased healthcare costs for these employees. According to the ADA, diabetes also cost employers $30 Billion in lost productivity, due to employee absences and reduced performance at work. Gallup similarly concludes that 6.3% of full-time U.S. workers have been diagnosed with diabetes.

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Addressing the Problem

Digital-powered diabetes-management platforms, such as Virta, BlueStar (from WellDoc), Noom, Omada Health, Livongo, and Glooko, are transforming diabetes treatment. These services combine clinically proven treatment protocols, connected devices (such as cloud-connected glucose meters) for remote patient monitoring, data analytics, and one-on-one patient guidance by remote health coaches.

Employers purchase access to these treatment platforms for employees as a health benefit in addition to health insurance. By reducing the severity of diabetes, “reversing” its symptoms, or preventing it among high-risk employees, these services lead to improved employee health and can lower employer healthcare costs by thousands of dollars per enrolled employee.

Choosing a Platform

We believe five criteria should guide employers in selecting an effective diabetes-treatment platform:

1.) A Guarantee of Net Savings or ROI

Vendor “skin in the game”: The Web sites of leading digital diabetes therapeutics firms detail annual healthcare costs savings of several thousand dollars per enrolled employee, indicate that hundreds of organizations use their services, and include a savings or ROI calculator. With these bold claims, employers should, at a minimum, be making a risk-free purchase. (Forbes noted that Omada Health’s results enable it to “confidently tie compensation to outcomes.”)

2.) Turn-Key Enrollment Systems that Respect Employee 

Engagement systems: Human resources departments are overworked and lack the expertise needed to enroll patients in disease-management programs. Experienced platform providers should have a turn-key system that can be easily customized for each client to build awareness of their service, recruit participants, and keep these participants engaged.

Enrollment systems must also ensure employee privacy. It’s not necessary for employers to know which employees have diabetes or who participates in an employer-sponsored program. Employees are unlikely to want employers apprised of their lifestyle habits, and a lack of privacy may dissuade employees from joining.

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3.) Technology with a Human Touch

Real people, real health coaches: Type 2 Diabetes results mainly from unhealthy, long-term employee behaviors. To lessen or reverse symptoms requires fundamental changes in behavior, which are difficult to accomplish. The regular one-to-one intervention of health coaches who can access patient data and monitor progress is essential: the data allows them to provide the necessary customized advice, positive reinforcement, and added motivation participants need to change life-long habits.

4.) Participation Incentives

Eliminating deductibles and more: The potential employer savings of high employee engagement in these programs is significant. Companies increase participation by modifying their reimbursement plans to reward employees who take part. These changes may involve eliminating copays for exams, medication, or supplies. Platform providers have the experience to guide employers on the specific incentives that promote participation.

5.) A Long-Term View

Data never sleeps”: Digital diabetes-therapeutics firms have unprecedented access to patient data, enabling them to evaluate and continuously enhance their treatment protocols. Employers should seek out firms that demonstrably understand and exploit this opportunity and appear likely to continue to offer best-of-breed solutions.

Additional Considerations

HDHPs: As detailed in earlier issues of this newsletter issues of this newsletter, high-deductible health plans (HDHPs) are a disaster for individuals with chronic conditions. Diabetes-management programs can be offered only with traditional non-HDHP plans, and employees must be educated to make this plan choice.

Here’s why: HSA accounts, funded with pre-tax employee and employer contributions, are an essential component of successful HDHP’s. And, the IRS prohibits firms from providing medical assistance, such as diabetes-management plans, to employees until they have met the high deductibles required for HSA eligibility.

Wellness Services: Popular wellness programs often focus on proper eating and weight loss, leading to the impression that they assist in diabetes health management. The economic value of these plans is uncertain. When making a purchase, employers must distinguish between wellness programs, which are oriented toward a broad employee population, and programs targeted specifically at the serious health problem of diabetes treatment and prevention.

Conclusion

As employers confront the high healthcare costs associated with the diabetes epidemic, implementing an effective digital diabetes-management program is imperative.  These platforms yield net results in better employee health and lower employer healthcare costs: a rare “win-win” in today’s healthcare services arena.

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