<img height="1" width="1" style="display:none;" alt="" src="https://dc.ads.linkedin.com/collect/?pid=796964&amp;fmt=gif">

Why Health Plans Wear The Cost of Chronic Disease (And How to Fix It)

Posted by Siobhan Bulfin on Oct 23, 2019 4:21:19 PM

Chronic diseases place a financial strain on patients and health systems. When combined with emotional and physical difficulties, high costs can make it even more difficult to manage these conditions.


Less obvious, however, is how chronic illnesses affect health plans. Payers also bear many of the financial pressures associated with long term illness.

Health plans face significant pressures that threaten their profits and can cause many to go out of business. If payers want to stay afloat and prosper, they need to address the vast majority of chronic disease at a lower cost. 

Health plans and the cost of chronic disease

Even though the ACA is changing the way providers get reimbursed, many still get paid for services rendered. In other words, the more services they provide consumers/patients, the more money they make.

The situation is different for payers. They don’t keep all the profits. Instead, according to the ACA, they’re required to allocate 80-85 percent of premiums to patient care, leaving them with no more than 15 percent of the profit to contribute to further growth. 

Since health plans are the ones who pay for health care, they by definition own the cost of chronic disease. And as these payers continue to adjust to new expenses from previously uninsured population groups, it’s vital that they stay in the black to maximize future growth.

Incentivizing wellness and lifestyle change in health systems

Part of the solution is to extend health care ROI into health plans’ active involvement. To do this, payers need to maximize the goals they share with health systems. 

Providers, for instance, are required to provide better patient-reported outcomes in order to receive higher revenue. However, they’ve traditionally delivered patient outcomes through costly means. But now, just like health plans, providers need to conserve revenue and deliver these outcomes more cost-effectively. This common ground is where payers and providers can best encourage financial savings.

Health plans need to incentivize lower costs by providing services that encourage wellness and lifestyle change within health systems. Then they can keep expenses per patient from exceeding 85 percent of profits while also maximizing financial gains. 

The fix for inefficiencies in health systems’ billables

Enlist the volunteer workforce

When it comes to illnesses, chronic or otherwise, people often face isolation. Without peer support, health systems miss out on one of the best assets for addressing chronic disease.

By enlisting this volunteer workforce, health coaches can monitor their clients’ conditions while empowering peers to motivate better patient follow-through on wellness plans. What this means is that clinicians can care for more patients with non-complex chronic disease and decrease the need for in-person appointments.  

As a result, patients have any time, anywhere support to make gradual lifestyle changes that prevent their disease from advancing. If health plans encourage health systems to invest in digital tools that enable self-management, they’ll be able to defray some of the long term costs associated with chronic disease.

Early intervention mitigates case-management

Around 70% of chronic illnesses are non-complex, meaning that the majority of long term illnesses can be treated with self-management as opposed to case-management. This can help health plans reduce current and future expenses by pre-empting case management with early intervention. 

Supported self-management provides clinicians more time to spend on patients with more complex needs. In this way, clinical staff can maximize their in-person appointments and manage resources - less demand on fewer clinicians.

Practical tools

Digital health tech platforms like Melon connect people virtually so they can spur each other on in their wellness journey. An enlisted volunteer workforce helps other patients address contributing factors to chronic disease such as poor eating habits and obesity. As a result, peer groups enable each other to keep taking steps toward healthier lifestyles.

By putting digital health tools into the hands of consumers, health plans can fulfill patients’ desires for convenient access to support. In this way, patients get access to any time, anywhere advice and support so that they can play an active role in their own wellness. The evidence is clear. As a result of joining Melon, 78% of patients with diabetes now experience reduced HbA1C levels and another 94% experienced significant weight loss. 

What does this mean for health plans? Fewer bills from providers and better margins.

Ready to begin engaging patients with a consumer driven model? Download our guide to supported self-management to learn how. 

New call-to-action


Topics: healthcare,, scaleable healthcare, digital health, value based care

For More Information:


Why Choose a Digital Platform? 

Whether you are offering the DPP In-Person, Combination, or Online, having a digital platform has many benefits.  A digital platform offers an engaging online community, HIPAA compliant messaging, fitness and nutrition tracking,  an extensive food database, and online modules for make-up sessions.  Increase your participant engagement and maximize your coach efficiency by adding a digital platform to your current DPP Program.  

Lead Magnet Mockup

How To Activate Patients

Discover how engaging your consumers in their own health makes them and your organization healthier. 

  • Uncover the secret to real patient engagement
  • Find new ways to drive revenue.
  • Enable behavior change
Download Your Roadmap