In February 2006, the Harvard Business Review contained its annual list of breakthrough ideas. Among the top 10 ideas was “Seeing the Health in Healthcare Costs.” The article states, “amid corporate hand-wringing over rising health care spending, researchers and a growing number of companies are validating the truth of a well-known but often-ignored principle, ‘an ounce of health is worth a pound of health care.’ That is; business can reduce their overall health care costs through targeted spending to prevent illness and improve health among their employees.”
By utilizing health risk stratification, health care organizations are better able to identify the “at-risk” population and work to prevent and treat illness and improve health care, says Sally Stephens, president of Spectrum Health Systems.
Smart Business spoke with Stephens about how risk stratification methods are used to prevent illness, improve health care and reduce health care costs.
What is health risk stratification?
When risk stratification is applied, the population is divided into low-, moderate-and high-risk categories. These levels are used to determine the appropriate level of intervention. An example of risk stratification is taking the health assessment responses and classifying the population by risk. About 20 percent of the population will be at low risk or have zero to four risk factors. About 40 percent are considered high risk, having five or more risk factors. The majority of the population falls into the moderate risk category. It is important to look at this data to target interventions based on individual risk factors and readiness to change relative to those risk factors.
Risk stratification is mostly utilized by organizations that provide health management or health education. These include health care organizations, wellness programs and disease management vendors.
How is risk stratification used to prevent illness and improve health?
It is well documented that, as we age, our health risk and medical costs increase.
Utilizing health risk assessments and ideally biometric screening data provides the opportunity to start targeting interventions and reduction approaches to those individuals in different ways. It is imperative to get a good profile of the population as a whole. This requires good participation in the health risk assessment. The tool must not only identify the risk but also identify an individual’s readiness to change. This is an indicator of the potential success of interventions.
How does risk stratification work to reduce health care costs?
To deflect the cost of chronic care, the scope of health care has expanded to include prevention. By utilizing a variety of tools and methodologies, health care organizations are trying to accurately identify the population near or in crisis and attempt to mitigate or prevent complications. This, in turn, helps reduce health care costs.
Once identified, health care organizations can develop policies and outreach programs to put at-risk individuals on the road to health. We know that 50 percent of illness is preventable and is mostly due to lifestyle behaviors. Working with individuals to help them improve their health can have a dramatic impact on stabilizing health care costs. In fact, research indicates that it’s about $6,800 for the cost of a high-risk individual compared to about $2,700 for a low-risk person.
Why is implementing risk stratification beneficial to companies?
Risk stratification allows the organization to provide targeted, risk-level-appropriate interventions. Providing interventions based on risk and readiness to change ensures more effective outcomes. If this data is not utilized, interventions are random and most likely not as effective. It is well documented that individuals with five or more risk factors generate exponentially higher claims than individuals at low risk. Therefore, it is critical to identify these individuals, help them improve their health and to work with those at lower risk to avoid migration into higher risk categories.
How does one determine which variables to use in stratification?
Generally, the variables used include alcohol use, blood pressure, blood sugar, cholesterol, emotional health, exercise, nutrition, safety, tobacco use, triglycerides and weight. It is also important to identify chronic conditions in the population. The criteria used in each of these areas are based on nationally accepted guidelines recommended by such organizations as the American Medical Association and American Diabetes Association.
Is risk stratification a new method being used in the health care industry?
Risk stratification is not new; however, it is used more aggressively today. Organizations have learned they reap the rewards when they give members the tools and awareness to combat disease sooner rather than later. Employer groups want and need healthy individuals so they are looking to any avenue possible, and risk stratification provides them with the best opportunity to impact health and ultimately cost.
SALLY STEPHENS is the president of Spectrum Health Systems. Reach her at Sally.Stephens@spectrumhs.com.