Put Away the Sledgehammer: Use Data to Change Behaviors and Control Cost

Passing along medical plan costs to employees is nothing new. In fact, this traditional approach has been used for decades as employers scramble to find ways to afford the escalating costs of group benefit plans. Unfortunately, the status quo has many negative, albeit unintended, consequences.

Passing along additional costs or making sweeping plan design changes simply to control costs is like using a sledgehammer to drive a nail into a piece of woodwork. The nail is in place but the surrounding surface sustains significant damage.

Passing along costs year after year is not a sustainable business model. It does nothing to change behaviors, manage chronic conditions or provide earlier interventions.

A Better Way

It’s time to put away the sledgehammer. Data-driven solutions will address waste and improve the ways participants utilize medical services with precision. Sophisticated analytics enable us to pinpoint the drivers of escalating costs and take action.

Let’s look at ways data-driven interventions can help reduce two of the largest drivers of escalating health benefit costs.

In 2022, there were more than 155 million visits to American emergency departments, an all-time high, according to the Centers for Disease Control and Prevention. Ten years earlier in 2012, the CDC noted only 131 million emergency visits.

Let’s assume these stats mirror those of an employee population. Using data built from geo-mapping, demographics, psychographics and claims history, the risk manager can help the employer identify and reach out to those who live in certain locations to offer alternative suggestions to emergency treatment.

While such outreach is not new, it is becoming more targeted due to increased amounts of data available. In other words, only those who need the information receive it.

Most employers offering group medical benefits know that the largest plan costs are most often the result of a small percentage of the participant population. In many cases this is due to the costs associated with chronic condition management.

The CDC estimates that 129 million people in the U.S. suffer from at least one chronic condition, such as diabetes, heart disease or obesity. The same study reports that about 90% of the $4.1 trillion annual health care spend is due to these chronic conditions and mental health issues.

Using sophisticated data tools enables risk managers to reach those in need sooner and with more regularity by using channels that drive action for this chronically ill population. In many cases, assigning a medical professional for regular intervention is helpful. For others, providing information on services may keep protocol adherence at acceptable levels.

The ability to gather information, analyze data, make data-driven recommendations, personalize interventions, validate solutions and measure progress are the keys to success.

Sophisticated Partnerships for Success

Discovering the power of data is magical. Data drives discovery, awareness and partnerships. When those come together, the result is viable, exciting and sustainable data-driven solutions that benefit organizations and their employees.

Enabling change and building viable benefits programs and controlling costs requires proficiency and a history of proven success. You need a partner who knows the market, technology, analytics and best practices. We have helped many organizations lose the sledgehammer and with our help, assign key measurements, understand their unique populations, track progress of improving health and ultimately, control plan costs.

This article originally appeared in 2018 and was updated in 2025.