October 18, 2018

Proving the Healthcare Cost Savings of Personalized Advocacy - A Q&A with Chief Actuary Carolyn Young

By Peggy Fischer

A Q&A with Accolade Chief Actuary Carolyn Young

A new actuarial study designed and led by global professional services firm Aon validates that employers using Accolade personalized advocacy achieve substantial reductions in medical and pharmacy spending across the entire employee population. We sat down with Accolade Chief Actuary Carolyn Young to get her thoughts about the study and its key findings about healthcare cost savings.

First, can you tell us the objectives behind the study?

Employers have pulled every traditional lever to control healthcare costs but are still facing a 5% growth rate, which is simply unsustainable for any organization, large or small. On top of that, they want more than just cost control; they genuinely want to help their employees have a better healthcare experience and better health outcomes. As a result, more and more employers are actively exploring new types of employee benefit solutions, including personalized advocacy, to understand how they can better serve employees and impact the bottom line.

The Aon study provides an independent, in-depth view into how Accolade personalized advocacy - which helps people navigate healthcare and make the best decisions - affects employer medical and Rx claims costs. The primary goal of the study was to prove the power of the Accolade solution to drive real savings for employers. We thought the best way to do that was by giving a highly respected actuarial company free rein to design a study and analyze the data.

You say that the study is very rigorous. What do you mean by that?

Aon says it's one of the most rigorous comparison studies ever done on employer healthcare costs and savings. Aon matched almost every person (99.8% and 99.9% of members) in our two employer customers (Employer A and Employer B) to three people in the control group. They matched on multiple variables - age, gender, geographic region, exact same chronic conditions and exactly the same comorbid conditions. Few employers are able to conduct randomized experiments with the rigor of this study.

What did the study conclude about Accolade producing healthcare cost savings for employers? Are the results what you expected?

We always knew we save employers a lot of money, so the findings were not a surprise, but now we have validation from a highly respected, third-party actuarial team.

The Aon study shows that Accolade personalized advocacy is directly responsible for significantly reducing employer medical and pharmacy spend. In 2016, the first year Employer A (approximately 10,000 members) engaged with Accolade, the organization saved $782 per employee per year, or a 6.5% reduction, compared to the matched control group. Over the course of three years - 2014 to 2016 - Employer B, with approximately 100,000 members, saw reduced cumulative cost growth of 2.7% compared to the 7.8% trend for the control group. And both employers achieved these results without increasing deductibles or cost-sharing requirements as many employers do.

What are the most important findings of the Aon study in your view?

The report highlights a few really important points behind the cost savings numbers.

  • First, employers using Accolade are not saving money just in discrete areas of their population; they're saving money across the board - older people, younger people; people with one condition, multiple conditions or even no conditions at all. Accolade addresses the entire population, not just the high-cost claimants or highest risk individuals, and gets to know each person and understand their whole life context. It's that personalized support that allows us to deliver a better experience and reduce healthcare spend at the same time.
  • We're often asked about the timing of savings. Some employers are concerned it will take too long to start to see savings. Others are concerned that savings plateau over time. The Aon study is a first-year study on Employer A and a multi-year study on Employer B. The results demonstrate that savings occur year one of the solution and are sustainable over time. In short, we work fast and deliver ROI that grows over time.
  • The Accolade customers studied by Aon achieved significant medical and pharmacy savings without resorting to high-deductible plans or adding cost sharing burden to their employees. Employers are increasingly turning away from these types of measures because they don't work and they're bad for employees. The Aon study shows they can in effect have their cake and eat it too. They can save money and delight their employees at the same time.

Why is the study on just two of your customers and not on your entire book of business? And how did you select the customers to profile?

The precision of the individual matching (three control group members for every Accolade member), combined with the sheer volume of data and depth of Aon's analysis, required us to limit the scope of the study to just two customers. We selected one enterprise customer (around 10,000 members) in their first year and one jumbo customer (around 100,000 members) that had worked with Accolade more than a year. Both customers represent the overall market of self-insured employers.

Why did you select Aon to conduct the study?

Aon is highly respected in the areas of risk management and healthcare consulting, and brings deep actuarial capabilities. Their team of researchers and authors has exceptional experience and credentials in the actuary field. It was an easy choice to give this team the data and let them design and manage the study as they see fit.

Where can employers learn more?

That's easy - they can read the full Aon report on our website.

To learn more about the cost savings delivered by Accolade, download the report - Accolade: The Effect of Personalized Advocacy on Claims Cost today.