From rising costs in medication to incorrect billing and late engagement, there are various challenges that global cost containment companies deal with on a daily basis in their endeavours to support international travel insurance and assistance companies to contain their medical costs. As we approach 2020, what are some of the key issues on the horizon, and how are they being overcome?

A plethora of challenges

Looking at cost containment challenges, managing the costs of newly developed and approved therapies and the ever-increasing cost of pharmaceuticals are some of the most pressing items – in the US as well as globally – according to Soraia Arroyo Lynch, Vice-President of Marketing & Networks at GMMI and GGA Travel Assistance. “The rising cost of pharmaceutical drugs and the speed at which more drugs are Food and Drug Administration (FDA) approved can, and often does, pose a challenge in cost containment,” she said.

When it comes to the task of saving money for clients on their claims, Gigi Galen-Grobstein, President of Star Healthcare Network, which offers cost containment to international clients from the US, said: “Hospitals each have their own charge master and charge what they charge, which can produce varied discrepancies in pricing at different hospitals for the same procedures across the US. Geographic areas can vary discounts due to where they are located in the US.”  

New Frontier Group’s COO Randall L. Condie said that key challenges include rising medical costs and that pricing models vary by state, county, city and facility. “With a number of travellers to the US experiencing a medical situation and not understanding US medical pricing models, costs can be unexpectedly exorbitant and lead to a negative experience,” he stated.

General Manager Brenda Durow at South Africa-based MSO International, which provides cost containment services to international health insurers across the African continent, said: “In general, in the African context, there is a limited number of ‘quality’ health providers.” According to Durow, this creates a situation in which providers can dictate price. “In some locations, there may be a large corporate group, and savings can result from being able to negotiate a fixed tariff on a designated-provider basis. However, in most cases, unless the claim is high-cost or there is limited cover, health providers seldom see any value in negotiations,” she said.

Over in Turkey, Dr Murat Erdogan, Medical Director at Eurocross Turkey, said that political and regional instability and its effect on fluctuations in healthcare costs, as well as new hospitals and clinics that require time to get up to speed with industry norms and dynamics, are some of the routine challenges that have become a part of performing cost containment in Turkey on a mass scale.

Dr Erdogan also mentioned the crucial necessity to ‘stay on top of frequently changing regulations in the market’ and added that, in Turkey, there may be a ‘missed opportunity, at times, when a cost container is engaged late in the case-handling cycle’. Such late engagement, which may have a limiting effect on the potential maximum performance of the cost container, may be a local challenge, but Dr Erdogan believes it is something that needs to be addressed by the industry as a whole.

Natalya Butakova, Business Development Director of AP Companies Global Solutions, gave her take on existing challenges: “A particular recent challenge is the implementation of diagnosis related groups (DRGs) by medical providers in several European countries,” she said. These newer-style health payment systems may have replaced the more traditional hospital reimbursement systems in many European countries to ‘help provide fairness to providers, when it comes to reimbursing them’, Butakova said: “We have seen on a number of occasions that medical providers ignore the terms of the agreement and increase their prices without prior notification and negotiation. This leads to increased charges and incorrect billing,” she added.

While DRGs have been introduced to support an efficient delivery and discourage unnecessary services being provided, Butakova has also noticed a trend of medical providers performing more services than medically necessary: “At times, this may happen on purpose,” she said, adding that in other countries over utilisation is taking place due to a lack of medical protocols and treatment.

Best practice

For cost containment companies, there are some best-practice solutions that can help deal with most challenges they may have to face. For GMMI’s Lynch, for example, active medical case management is an effective cost containment tool, and medical case management is at the heart of everything GMMI does. “When cost containment is able to be performed real-time, together with the case management of the patient, we get outstanding results thanks to the medical monitoring process,” Dr Erdogan agreed. Similarly, Durow said that the application of evidence-based protocols related to the level of care and length of hospital stay can help secure best patient outcomes, as well as an optimal price for insurers.

Pooling of strength

MSO International has offices in five key cities in Africa, over 6,000 contracted providers covering almost every country on the African continent, and agreements with all hospital groups in South Africa. For Durow, being part of a large network is useful when having to deal with cost challenges. The company works for major expat and travel insurers and a ‘pooling of strengths’, Durow said, affords it negotiating power with major health providers, helping them to secure annually agreed tariffs and considerable savings for clients.

DRGs have been introduced to support an efficient delivery and discourage unnecessary services being provided

As for helping clients save money on their claims, there are a number of important factors, according to Grobstein. These are: the strategy and relationships each company has with the health provider, the right negotiating and contracting abilities and knowing how to approach the health provider to work together to get the bill at a reduced rate. This means that cost containers can either make use of their own discounted amounts that have been pre-negotiated with providers, or of access to a network of providers or negotiating claims. They can also decide to work with the hospital itself to, for example, challenge the codes if they do not match primary diagnosis or services rendered.

Staying up to date

In addition, it pays for cost containers to be observant, said Butakova: “We believe it’s important to closely observe any trends and challenges. The approach that was most appropriate and effective last year, might not be relevant the year after, for example.” Looking at the use of DRG-system billing, Butakova said: “There are still some other approaches that can be used to manage costs, and we explore alternative approaches constantly.” When it comes to having to deal with excessive medical testing or periods of in-patient stay, she said that it’s important for a company to diversify its approaches.

Condie said: “On an ongoing basis, we are educating and assisting our international clients on the differences in their home country healthcare system compared to the US healthcare system and pricing models. Each case is unique, so we operate with a very personalised approach.” Similarly, Lynch commented: “GMMI’s consultative approach to cost containment means we help our clients with understanding the complexity of pharmaceutical cost and medical case management of chronically ill patients who may benefit from these drugs.”
Grobstein added: “Helping our clients understand the vast US-healthcare system, and how to navigate it is challenging, but it should be a win-win for all. Whether pre-planned or emergent, we are here to help our clients find the provider for their specific needs, and financially save by using one of our providers. Keeping up to date with new providers, mergers of providers, as well as new services providers, is the best way to ensure the navigation is seamless and efficient.”

Technology 

Condie highlighted the importance of technology when it comes to cost containment. “In keeping rising costs in check, one of our key strategies is data collection and data management through Onyx, our proprietary operating system,” he said. “Only through collection and extensive data analysis can we continuously monitor ‘reasonable and customary’ provider reimbursements.” 

Grobstein, too, finds value in time- and money-saving technological systems and applications; for example, in work to help facilitate direct and clear communication with clients, as well as hospitals. “For large clients, we believe electronic data interchange (EDI) provides quick access from claims to repricing, and back to the clients without a lot of handling involved,” she said. “A robust claims-repricing system is also imperative; so claims can be discounted appropriately, and users can catch all the coding to make sure they match the diagnosis of the claims. EDI is not essential if you have the right software to reprice claims effectively and efficiently.”

AP Companies’ own automated cost containment tool has been helping the company  to maintain control over charges implemented by medical providers, as well as ensuring the prices listed in the claims match those of the providers. “The system checks it automatically and flags up any inconsistencies,” said Butakova. “Parameters for which this system has to check every claim received by AP are being updated regularly, to make sure it’s a live system capturing the realities and challenges of the present times.”

Electronic data interchange provides quick access from claims to repricing, and back to the clients without a lot of handling involved

Going into 2020

healthcare costs and increased expenditure there will be an even higher demand for cost containment solutions.” For Lynch, 2020 will bring similar challenges. “The increasing cost of prescription drugs is an important concern, not only for the US, but on a global level,” she said. “Additionally, as more countries adopt newer, more expensive technologies such as proton bean therapy, for example, we will see more complex, catastrophic cases being managed globally. We will embrace the challenge with a strong medical case management team, knowing that true cost containment places medical management in the forefront of patient care.”

Regarding new trends such as ‘package pricing,’ which Butakova is seeing being implemented by various providers in different parts of the world, she said: “Package pricing leads to predictability of costs based on a health condition, and also to certain standardisation of care for any particular medical case.” However, she added that cost containers should be watchful when it comes to longer periods of time. “Every case is different and the majority of patients might not need all the services included in the package as it is.”

Eurocross Turkey’s Dr Erdogan shared some ways in which cost containers can be supported in the face of new challenges. These are: building a complete framework in which cost-inflating factors are reduced to a minimum degree; having control over a provider network; and a thorough command in local pricing regulations and pricing mechanisms of each particular hospital and region. He also stated that having full control over a case, from as early as possible, is crucial in achieving the most desirable outcomes on behalf of insurers.

Butakova said that it will be interesting to see how cost containment develops, and stated that methods such as an active monitoring of all package prices and invoices should help a cost container be well prepared to face international cost containment challenges. It will be interesting to observe how the cost containment industry shifts and evolves in 2020 and ITIJ, for one, will be closely monitoring its growth. ■