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How Does Advance Care Planning Reduce Healthcare Utilization for Health Plans?

Tuesday, September 1, 2020

Healthcare utilization often trends upward significantly for high-need, high-cost (HNHC) individuals, accounting for as much as 50% of overall healthcare spending on just 5% of the total population. Unfortunately, much of this care offers little — if any — benefit for HNHC individuals. In fact, Reuters has reported as many as 42% of Medicare members are subjected to procedures providing little to no medical benefit. For health plans, this unnecessary care can cut steeply into margins, amounting to $270 billion wasted on unnecessary care annually in the US.

This crossroads of high utilization and low medical benefit begs the question: how can health plans reduce unnecessary healthcare utilization while simultaneouslyimproving quality of care for members?

There are numerous solutions that address either utilization or quality of care, but very few actively manage both; advance care planning (ACP) is one such solution, providing a structured, scalable framework to help plans reduce utilization and empower members to make more informed, value-driven care decisions.

How does ACP reduce healthcare utilization?

ACP reduces unnecessary utilization by allowing members to make educated treatment decisions before a serious medical event occurs. By making these decisions in advance and documenting them within an advance directive (AD), members avoid having physicians or family members make care decisions on their behalf. In spite of good intentions, these third parties often drive unnecessary care utilization by defaulting to intense treatment plans for the member without considering:

  • If these interventions align with the member’s wishes
  • If the benefits of these interventions will outweigh the burdens

ACP helps members define and document their care goals, ensuring they receive only the care they want, and none of the care they don’t. Here’s how it works:

  1. Comprehensive education

Before individuals can define their goals of care, they need a thorough understanding of their illness(es) and what their treatment choices are. ACP provides this important education, illustrating what the coming months and years might look like as they navigate their serious illness.

ACP also ensures that the appropriate stakeholders are involved in these conversations, such as loved ones, family members or caregivers that will be heavily involved in the member’s treatment going forward. These outside parties are often vital in helping members make their care choices and should not be left out of the process.

  1. Individualized support

Every member is unique, with multiple individualized factors influencing their care decisions. ACP surfaces and incorporates these unique values into their care goals, such as spirituality, culture, personal finances and family dynamics.

  1. Scenario-based decision making

The language of advance directives (AD) does not often translate well to members’ real-world experiences. ACP humanizes this process, walking members through different scenarios they might face as their illness progresses and translating their decisions into codified advance directives.

  1. Point-of-use delivery and ongoing support

Finally, ACP ensures members’ advance directives are documented within their electronic medical records and distributed to the point-of-use so they can be leveraged by physicians when and where it matters most. As member care goals evolve, ongoing ACP support also allows members to modify these documents to best suit their needs.

Reduced utilization, lower costs and higher quality care

When the above steps are followed at scale, industry research has shown that healthcare utilization drops significantly for HNHC members by:

  • Reducing the number of hospital admissions
  • Reducing the length of inpatient stays
  • Reducing readmissions
  • Reducing the intensity of treatment

Members also indicate increased satisfaction with their care after participating in ACP, and their care goals are achieved significantly more often. Investing in ACP has been proven to produce significant ROI for plans, saving thousands of dollars for every actively enrolled member.

To read these findings in full and learn how your plan can start reducing utilization with ACP today, download our free guide: Reduce Unnecessary Utilization in Your High Need, High-Cost Population With ACP.

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