What’s Driving the Rise in Paramedical Claims? The Answer May Surprise You.

Feb 04, 2019

A little more than a month ago, many of us watched the World Junior Ice Hockey Championships here in Vancouver and Victoria. Each of these ten teams had an entourage of chiropractors, psychologists, massage therapists to attend to the players’ aches and pains.

Fortunately for us non-hockey types, we don’t need to experience slashing, boarding or tripping before we can visit our paramedical practitioners. Unfortunately, that’s exactly why we are witnessing paramedical claims increasing at a greater rate than the rest of the extended healthcare benefits.

It is completely valid to assume that this price increase is due to inflation on the price of each treatment. To test that theory, we recently completed an analysis for some clients with a total of nearly 3,000 employees. We found that it’s actually utilization (i.e. the number of visits) that is driving this cost explosion. In the last three to five years, inflation was less than 12% but paramedical usage increased by 70-110%. So yes, inflation plays into this but only minimally.

What other factors are behind this upsurge? For one, practitioners have strengthened their referral networks and, in many cases, have started multidisciplinary practices. My own chiropractor has referred me numerous times to the naturopath and massage practitioner who practice in the same office under the same banner.

In addition, the number of employees who value paramedical services has increased. Looking at claims distribution, we saw millennials along with Gen-Xers use paramedical practitioners at a much higher rate than their older cohorts. We know that millennials are now the largest generation in the workforce. Combined with the post-millennials who are now joining the workforce, we can predict that paramedical usage won’t be waning.

So, is there any way to mitigate this upward shift? Almost all carriers offer cost containment features on paramedical practitioners. Some traditional approaches include annual limits per practitioner, annual limits across all practitioners, co-insurance or per visit dollar limits, but these don’t appear to have any impact. The doctors’ referral method that we saw with most plans 15-20 years ago also does little to curb excess use because it is only required at the start of each year.

One approach that has some merit is to remove paramedical coverage from the insured plan entirely but then add it back through a health care spending account. This should provide the flexibility employees want with the cost containment employers like. After an exposure analysis, however, we found that this was not a favoured approach as employees perceived it to be a loss of coverage.

More intriguing, in light of our recent findings, would be to restrict the number of visits either by each practitioner or by all practitioners in aggregate. This would have the effect of insuring that each employee is managing their number of visits appropriately. Combined with an annual maximum, it would include all the necessary controls to provide adequate coverage without fear of excessive use.

So, in the end, employees don’t need to play injured like how Max Comtois did during the World Juniors. We can work with you to create a solution where employees can still use the paramedical practitioners they require and enjoy, while you can keep that usage in check.

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