"COVID took the fee-for-service freight train, which was already headed for the cliff, and accelerated the pace of that inevitable crash," says Clint Flanagan, M.D., founder and CEO of Nextera Healthcare, a direct primary care service provider. "Because of the limits of fee-for-service and insurance-based primary care, in particular, its practitioners' inability to do virtual visits, diagnoses were often delayed, cancers got worse, and the downstream effects were accelerated. Meanwhile, direct primary care services grew during the pandemic, largely because we have been doing virtual care for years and the model meets patients at home, work or virtually."

As the CDC noted in its conclusion to a 2020 study: "Given this widespread reporting of medical care avoidance because of COVID-19 concerns, especially among persons at increased risk for severe COVID-19, urgent efforts are warranted to ensure delivery of services that, if deferred, could result in patient harm."

It's another COVID irony: The virus that attacked so many also spurred innovation that will help many more down the road. Those innovations are now available, but will they be utilized? It's up to plan sponsors and their benefits advisors to identify and implement them as part of their ongoing campaign to rein in health plan costs.

Assessing the damage

A study by the Centers for Disease Control and Prevention in September 2020 reported that, while more than 40% of U.S. adults reported delaying medical care during the pandemic to reduce their chances of catching COVID-19, an even higher proportion of those with disabilities, or two or more underlying conditions, stopped going to the doctor.

It's tough to blame those with chronic illnesses for delaying care. Their choice was difficult: Sit in the waiting room and risk catching COVID, or stay home and attempt to manage their conditions on their own.

But health plan sponsors will now have to pay the price of the delayed medical care for their most medically vulnerable members. What is that price? As Jeeves the butler was wont to remark to Bertie Wooster: "Difficult to say, sir."

Yet some emerging trends can already be identified. Most of the short-term impacts are negative, including the cost incurred during the pandemic in terms of claims, absenteeism, lost productivity, and the scramble to reconfigure the workplace. Now, there will be the additional cost of treatments that result from delayed care.

For employers, the pandemic created uncertainties that are still playing out. An Aon survey in 2021 estimated that plan sponsors would see an average 5% drop in claims as members stayed away from caregivers. In a related finding, the survey noted that insurers had projected COVID-19 would raise employer medical claims by 2% — already cutting into the "savings." That estimate included costs for delayed care.

Once the pandemic began to loosen its grip in 2021, those who had been avoiding care sought it with urgency. Because of the vast amount of health data retained by employer plan administrators, this surge in some ways represented an enormous medical research study: What is the effect of nearly three years of DMC on chronically ill plan members? The true cost in terms of member health and claims is yet to be truly tallied and will likely take years to quantify. But some of the data has started to emerge, and so far, it's not a pretty picture.

Related: Stop-loss insurers are busy writing pandemic claims checks

First, there won't be a one-time DMC "event" that plans can absorb and then move on from. Some plan members may continue their care avoidance for years, says Gina Bruno, Vice President of Product Strategy at Crossroads Treatment Centers (formerly naviHealth's vice president of value-based care). In a blog post, she wrote that primary care providers will face a significant challenge as they attempt to reassess and establish a new baseline for a patient's needs after a lengthy gap in care.

This process may include medication reviews and referrals for tests and screenings. All that will take time and money, both coming at the plan sponsor's expense.

"In fact," the post says, "Bruno believes that providers may need to even consider the patients' first office visit to be similar to a 'new patient' visit in order to establish those post-pandemic baselines to address physical and psychosocial issues that may have emerged during COVID-19."

Then there's the considerable expense of addressing worsening chronic conditions that went untreated during the pandemic. No estimate of this hit to the plan yet exists, but one could start by counting the number of plan members with chronic conditions, then multiplying by the annual bill for the higher health care services. Will it be $1,000 per member? $5,000? $10,000? More? Sponsors will begin to have a better idea in 2023, when those bills are paid and tallied.

Plans with older members can likely expect the most severe hits this year and going forward. A study titled "Risk from delayed or missed care and non-COVID-19 outcomes for older patients with chronic conditions during the pandemic" examined the health records of more than 14,000 patients 65 years of age or older in one large health system who had one year of baseline data pre-pandemic and up to nine months post pandemic. Their outcomes were not encouraging.

"Older patients who had four or more indicators for risk from DMC had higher mortality and steep declines in inpatient and outpatient utilization during the pandemic," the report concludes. Avoiding the doctor's office may or may not have ensured COVID protection, but it did ensure a steep decline in health for those older patients with chronic conditions.

Meanwhile, those covered by insurance plans that include high deductibles and copays will continue to avoid ongoing care, leading to bigger downstream claims, says Dave Chase, cofounder of Health Rosetta.

COVID may have kept some chronically ill patients from visiting their physicians, he says, but an inability to pay will continue to keep many more from getting the care they need.

"Financial toxicity is expected to become the tenth leading cause of death," he notes, citing a recent study that concludes that "nonadherence due to a patient's inability to pay for treatment will be a leading cause of death in 2030."

But, he adds, these costs can be avoided if plan sponsors take action. They will need to reduce or eliminate financial barriers to care, focus the health plan on preventative services, and engage plan members in their own health care.

Chase has long insisted that the resources are already available to fix the "broken" health care system. Trends that were accelerated by the pandemic appear to support his argument.

Promises fulfilled

For plan sponsors and their advisors, controlling costs is all about managing costs — especially for those with self-funded plans. Everyone knows that health care costs are driven by specific segments of plan members, and that the costliest segment is those with multiple chronic diagnoses. Prior to the pandemic, managing that group was an inexact science, to say the least. But that no longer needs to be the case.

The pace at which society adopted telehealth and telemedicine during the pandemic astounded even its most bullish proponents and the duration of the pandemic was key to this adoption. Had it been a six-month or one-year incident, momentum gained at the front end probably would have been dampened or lost altogether. But as the pandemic dragged on, physicians, patients, benefits advisors and plan sponsors had time to test the efficacy of these new resources. And from a high-level view, telemedicine performed extremely well.

Many of the innovative tools and resources directly attack cost drivers like diabetes, heart disease and high blood pressure. In a recent article in Columbus Business First, Jane Peterson, president, Anthem Blue Cross and Blue Shield of Ohio, discussed the implications for cost control represented by self-managed solutions.

"We're seeing … the emergence of digital tools to help consumers manage chronic conditions," she says. "These tools are meant to complement provider care, but they're allowing people to self-manage conditions at a level that they've never been able to do before. Obviously, there are implications related to health. But these tools actually help mitigate cost because 90% of health care costs are driven by chronic conditions."

Ron Leopold, an Atlanta-based physician consultant to plan sponsors, brokers and health care innovators, cites two specific areas where virtual care and telemedicine completely changed the ballgame: chronic conditions and mental/behavioral health.

"The pandemic upended our lives and changed the way we lived," he says. "It catalyzed some emerging technologies and ones that had not been fully embraced, and in the process, introduced nothing less than a quantum leap for the delivery of health care. Virtual care, a more comprehensive way of leveraging telemedicine, is the most stunning one. That brave new world we were starting to see is now becoming so much more realistic."

"Diabetes is the classic chronic condition and the one that's always cited as costly but treatable. Now, thanks to the innovations that came out or were adopted during the pandemic, I can test myself in new and different ways. With an app it's really easy; then I can reach out to my provider in an asynchronous text and get a response to my question in 30–60 minutes."

When it comes to behavioral health, virtual meetings all but replaced in-person sessions during the pandemic — and disproved the popular theory that mental health counseling had to be done in person.

Read more: What's next for telehealth?

"There are still benefits to in-person counseling," Leopold says. "It's not going away, but the idea that the psychiatrist and patient have to be in the same room is no longer true. Whereas telemedicine and telehealth struggled to be mainstream for employer programs before the pandemic, they have been making great strides. By mid-2022, virtually every employer and provider had adopted telehealth. That's not an evolution—that's an enormous leap."

In a webinar late last year with Justin Bellante, CEO of BioIQ, Richard Popiel of Xploration Health praised the advances made in at-home testing and screenings during the pandemic. Because those tools target the 3% to 5% of plan members who represent the most claims, he said, great strides can be made with the right management practices.

"We will see a new normal with at-home testing and at-home care. They are better than they were and will get even better," Popiel adds. "That's what health plans are working on. They know COVID is not going to end and the home is the place to get care and diagnostic testing."

Plan sponsors and their vendors have the ability to influence member behavior through combinations of different communication platforms and vendor tactics, he said.

"The new normal [for plan members] will be a hybrid. You cannot get everything virtually, but there are plenty of things that you can get virtually. The hybrid will define the new normal. People are very comfortable with in-home care, whatever that is, including treatment of chronic conditions. People do not want to sit in a waiting room and be exposed to diseases any more. Not if they can get the care at home."

Specific solutions to chronic care management

To effectively manage their chronically ill plan members, plan sponsors need to be able to carve out that segment of their population. They also need to be able to repeatedly communicate with them and track their behavior to ensure they are adhering to treatment plans.

Because of HIPAA regulations, employer sponsors cannot do that directly. But through vendor-to-vendor partnerships, or with direct primary care services, they can. That's key to engaging the right people at the right time to avoid such high-cost disorders as dialysis, heart transplants, kidney transplants, and related surgeries and treatments.

Once the population is known, the resources can be applied. The onslaught of remote/at-home/virtual testing devices and related technology that has emerged in the last five years to address chronic conditions defies cataloging. Many were available pre-pandemic, but COVID accelerated the take-up of existing solutions and spawned myriad new ones.

Medical technology experts say better marketing of innovations designed to address chronic diseases represented a crucial advancement during the pandemic. Previously, many entrepreneurs and inventors did not consider marketing as part of their products and services. But they soon learned otherwise, as those that were well marketed and supported by vendors found success, while others foundered.

For plan sponsors and their benefits advisors, communication and ongoing support from vendors is critical if plan members are to adopt new benefits.

"How do you get your plan members to adopt these solutions? It's about how it is communicated and supported throughout the year," Leopold says. Plan members need choices, they like incentives, and they need guidance from advisors and vendors who understand the resources and what resonates with patients with respect to maintaining their health.

"Those of us who are in the business on the advisor or vendor side do a whole lot more work today to put together a group of solutions that we offer to covered members," Leopold says. "Then you have to drive awareness through repeated communications and incentives. Essentially, every employer is putting together its own ecosystem of services to make them available to their covered members."

Related: How technology allows us to rebuild the claims journey

Nextera Healthcare's Clint Flanagan has physicians attend plan member enrollment meetings so that employees can hear about their benefits from the health care professionals who will be taking care of them.

"I don't believe a fee-for-service physician has ever attended an enrollment session for employees with a traditional insurance plan," he says. "We meet with the advisor and the employer before the enrollment period to begin the education process, we attend the enrollment meeting, and once the direct primary care benefit begins, we communicate with plan members to help get them engaged with their physician and health care team. Typically, our physicians spend an hour with patients getting to know them during their initial visit."

Affordability matters as well. Nextera Healthcare's model, under which the employer pays $99 per month per member for unlimited primary care, eliminates the financial barrier for employees. That is especially important for managing the health of those with multiple chronic diagnoses, Flanagan says.

"Our primary care physicians can take care of at least 90% of the needs of a patient with a chronic disease. Our model of care offers onsite and near-site clinics, as well as virtual doctor visits. DPC physicians were doing virtual care well before COVID."

Many earlier innovations were not covered by insurance, chief among them virtual doctor visits, so fee-for-service providers had to figure it out on the fly during the pandemic. As a result, many went under or sold out to large health systems when their billings fell off the table.

But now, that is changing as well. Vendors like Accuhealth, which offers a diabetes management platform, entered the marketplace with services that are free to patients. Accuhealth emphasizes communications and follow-up with patients, making its service attractive to sponsors and advisors.

Carving out and directly managing a plan's chronic population is the only way to reduce plan claims in the long term, according to most advisor consultants and medical experts. Kimberlee Langford worked for years as a nurse in the traditional health system and was frequently discouraged by the way chronically ill patients' health was managed (or mismanaged).

As vice president of clinical services and business development director for Specialty Care Management, a dialysis and claims risk mitigation service, she oversees nursing staff who work one-on-one with health plan members who have multiple chronic diagnoses.

"For members on dialysis, our strategy is unique. We mitigate the risk and we put a bridle on those claims by underwriting a flat fixed cost for dialysis. We do take risk in that if we don't manage them well and they require more frequent or additional dialysis or spend a month in the hospital, that reduces our profit," she says.

Read more: 7 ways employers are taking action to tackle high health care costs

Specialty Care Management is profitable, though, and employers save an average of 78% on dialysis without any additional fees. In addition, employers also save over the long term with better outcomes for members who do well on dialysis, have reduced risk of hospitalization, and better understand their benefits.

One of the company's strategies for reducing risk and saving on dialysis is working upstream with a chronic kidney disease (CKD) management program. The key is the nurse-coaching and monitoring for patients identified with CKD or those who are at high risk for having silent or undiagnosed CKD. The aim is to delay or prevent the need for dialysis, and that's where the big savings come for employers.

"If you really want to reduce your health care spend and improve health, you have to think long-term and holistically. ROI is dependent on plan member behavior. If you want ROI, the program has to be meaningful to the plan member," Langford says. "Improved self-care leads to improved outcomes—and that yields the ROI."

Specialty Care Management's nurses each manage 300–350 plan members. Because 3% to 5% of a group's population are the costliest, those are the patients best served in the program. Nurses are in regular contact with their patients, advocating for them with health care providers, educating them on diet and exercise, and coaching them about making better choices that will affect their future.

"Employers need to understand how this will show up now and down the road. By reducing the risk — whether it lies with the group or with their stop loss partner — a group can enjoy lower costs now, lower renewals later, and experience lower stop loss costs," Langford says. "By creating a predictable and to-the-penny risk, we make underwriting the risk of dialysis a lot easier." And reducing the need for dialysis by addressing it upstream can yield obvious savings.

"Our partnership with benefits advisors is critical to its success," she says. "The advisor is the archer, and we are the arrow in their quiver." Specialty Care Management provides the risk analysis, cost and savings analysis, and the implementation strategy based on legal and administrative review. They partner with advisors to help them provide employers with the information they need.

"A good advisor/consultant often acts as a physician for the group," she says. "They work to improve the health of the group as they make accurate diagnoses from their assessment."

But without data, making an accurate diagnosis and prescribing the right treatment is virtually impossible. "It's like throwing darts blindfolded and hoping you'll hit the target," Langford says. "That's really what helps an advisor win and keep their book of business: preserving capital and profitability by mitigating high-cost claims that are hiding in a group. When the advisor wins, employers win by reducing costs, members win with better outcomes, lower out of pocket costs, and undisrupted access to care, and we win, too."

The COVID payday is coming

As sometimes happens with catastrophic world events, those who forecast doom and gloom can be wrong. And this could very easily be the case for those who warned that plans would be hit hard by both COVID and delayed medical care.

In its 2022 stop loss market report, Amwins Group Benefits and Stealth Partner Group revealed a surprising outcome: The magnitude of the COVID/DMC hit many had expected has not yet materialized.

"In general, the postponement of patient care during the pandemic has led many experts to anticipate a future surge of claims when care returns to pre-pandemic levels. In our previous State of the Market Report (June 2021), we predicted that carriers would offer conservative renewals for 2022 as they prepared for larger claims (and higher incidence) following more than a year of postponed care. What we saw instead was a continued reprieve in overall claims activity with carriers experiencing relatively low to moderate loss ratios versus pre-pandemic periods."

While questions may linger for several years about the true cost of COVID and DMC to health plans, a growing cadre of advisors, sponsors, technology innovators, and medical professionals believe the future is already at hand when it comes to managing chronically ill patients. The numerous lessons of the pandemic were not wasted on these forward thinkers. By building the right benefits plan with the right advisor and vendor relationships, sponsors are already making gains in controlling the price tag represented by chronic diseases.

One of the enigmas of the old in-person doctor-patient encounter that still amuses Ron Leopold is the parking conundrum: You race to your appointment, can't find street parking, are forced to park in the hospital's garage, and your provider then refuses to validate parking.

"As we look to the future, the real opportunity is for employers to build a much better ecosphere over time. To build improvements in the way their members interact with the health care system, and to improve their health overall. This, of course, is also the way to reduce your health care spending."