Obeo Health

Obeo Health – Reduce costs and keep employees happy – a case study.

The cost management challenge

Most US employers offer health insurance to their employees for two major reasons – it is the right thing to do since employers care about their employees and equally important because the employers compete for talent and the ability to obtain good health insurance is a prime concern for any job seeker. Unfortunately, the rising health care costs that always outpace inflation continue to be a vexing problem for most US employers. Besides the issue of direct health care costs, employers also face ongoing challenges while guiding employees at open-enrollment through the remainder of the year with issues pertaining to benefits, unpaid claims, incurred costs and badly adjudicated claims.

The past 60 years have seen a few macroeconomic cycles vis-à-vis health care cost management with each change lasting about 20 years. In the 1960’s, PPO plans made their debut. In the early 1980’s, faced with skyrocketing costs of PPO plans, employers began to adopt HMOs. Towards the end of the 1990’s, when the clamor for cost control was reignited, employers made a move towards ‘self-insurance’. Over the course of the last 5-7 years, the next frontier for cost management appears to be consumer-directed health plans or CDHPs.

While few employers have adopted full CDHP replacement, many continue to offer multiple plan choices to stay competitive, and allowing employees to choose a plan in their best interest. Employers often spend significantly on educating their employees about CDHPs in the hope that employees will proactively choose them and participate in helping manage costs. But most often the results do not pan out.

What are the underlying issues?

The reasons for these poor outcomes are simple. Healthcare happens to be one of the most non-transparent sectors especially when it comes to the economics of healthcare. Next, there are inherent complexities in plan designs and the number of factors to consider is vast. Then there are the jargon and insurance terms that are not easily understood – embedded deductible, aggregate out of pocket, co-insurance, co-pay etc.  Employer attempts at communication and outreach to explain and educate around these topics are often met with low employee engagement. In addition, we live in a world where facts and fiction can often comingle and it is very easy for employees to misinterpret CDHPs as a curtailment of benefit.

What is the solution?

One way to solve this problem is to offer a solution that combines education and easy to understand personalized econometric details with the ability to easily test the authenticity of the solution as a trusted source of advice. Very importantly the solution must also tackle emotional consumer questions such as:

  1. “If I switch health plans can I keep my doctor?”
  2. “If I switch health plans will my medicines still be covered?”
  3. “Can you help me understand my bills and help me control my costs over the next 12 months?”
  4. “Am I due for any screening tests and can you help alert me to any ‘gaps in care’?”
  5. “Can you remind me to keep refilling my medicines?”
  6. “Can you alert me via email or text message about possible drug or condition interactions”.

Obeo Health offers exactly this kind of a solution.  It is a big data predictive analytics platform that produces quick results for a user by mining multiple datasets.  These data streams include the following; past healthcare claims, provider network status, medication formularies, procedure & medication pricing and plan design data.  In particular, Obeo currently offers three modules:

  1. Plan Navigator – Employees can budget annual healthcare costs and select the best Health Plan based on their past medical claims data and predictive future personal health Educational content is provided via text and multiple video clips.
  2. Health Organizer – Employees can track and manage their healthcare spend and wellbeing throughout the year. They will receive financial and clinical alerts via email or text message.. They can also view their claims in an easy to understand fashion.
  3. Population Health Manager – Employers can analyze their aggregated healthcare trends to build smarter plans and improve employee wellbeing.

Cost reduction and satisfied employees – yes, it’s possible!

Since the economic interests of the employers are often directly related to employee decisions, the Obeo solution also results in big savings for the employers. Here are some common ways in which Obeo enables employer savings:

  • Significant proactive migration of employees to CDHP plans – in a single year as high as 25-40%.
  • Steering employees to employer promoted programs such as telemedicine and EAP
  • Helping employees understand the implications of going to a high-cost ER facility when less expensive options such as Urgent Care are available.
  • Educating employees about visiting standalone imaging centers and labs as opposed to getting those procedures done in a hospital setting and many more.

The 2016 Employer Health Benefits Survey from the Kaiser family foundation mentioned savings of as much as $1,000 per employee per year from CDHP adoption. Health insurance companies in the past have quoted savings of 10-14%. Benefits consulting companies such as Mercer have quoted savings of up to 22% as depicted in the figure below in their 2016 National Survey of Employer-Sponsored Health Plans. No matter which number you choose, the savings via CDHP adoption are big.

One Obeo client – a 1,200 employee high tech company located in Atlanta that now has almost a 72% proactive adoption of CDHP plans has seen and confirmed savings of about $1400 per employee per year across the population that opted into the CDHP plan.

A second Obeo client – a 7000 employee Indian IT services company has seen savings of $3M+ after they ended with almost a 35% increase in their CDHP adoption.

A third Obeo client – a division of a fortune 50 company with about 4,000 employees has seen savings of $2M+ after the use of Obeo.

The graphs below show the aggregated spend trend for another Obeo client in the first 10 months of 2017 as compared to similar periods in 2014-2016.

The following graph displays a decline of 15.2% in plan costs in first 11 months of 2017 as compared to the increases in each of the previous years for the same period. This is significant especially in the face of an almost 10% increase in the total employee population for this employer. The 17.5% increase in employee spend over the same period is largely due to the increase in the employee population. The final per employee increase is minimal when the impact of tax savings accounts (HSA, HRA etc) is considered. The bottom line is an overall cost decrease in both employer and majority employee populations.


The graph below displays total spend for the same period for the same employer when IBNR is factored into spend computations. The savings in the total spend in 2017 is still a spectacular 10%.


Obeo Health can help you achieve similar results. Give your employees the tools to navigate the healthcare maze. Win the hearts and minds of your employees and achieve significant savings at the same time. Contact us at contact@obeohealth.com.



As an employer are you educating your employees about the appropriate use of the Emergency Room, Urgent Care and Telemedicine?

One in five Americans will visit the Emergency Room (ER) at least once a year. Between one-third and one-half of all ER visits are for non-urgent matters.

Many conditions can be treated at Urgent Care centers. A recent review of the top 100 diagnosis codes from a self-insured employer revealed that 83 percent of them were in the top 100 diagnoses seen at a nearby urgent care center.

Unnecessary and inappropriate use of the ER causes multiple systemic issues and wastes scarce resources. The average cost for an ER visit is $1400 — compared to $125 for an urgent care visit.

Chronic conditions — which affect 45 percent of Americans — account for 75 percent of health care expenditures in the US. Diabetes, heart disease, asthma, and other chronic illnesses are also responsible for a large portion of ER visits. Asthma alone precipitated 1.8 million ER visits in 2004.  The ER visits resulting from unmanaged chronic conditions are avoidable. Proactive disease management, effective patient and caregiver education and simple lifestyle changes, can reduce ER usage for this group by up to 69%.

Appropriate use of the ER could save the U.S. healthcare system more than $18 billion a year. Patients with avoidable or non-urgent conditions who use urgent care centers, primary care physicians, or a telemedicine service can contribute significantly to creating a sustainable healthcare system.

How do you divert your employees to Urgent Care or Telemedicine?

An effective ER diversion program begins and ends with employee education. If you, as an employer, are serious about reducing your health care spend you need to think about the following;

Education Campaigns: Educational messaging creates an awareness of cost consciousness, reinforcing how to use urgent care, emergency room care, telemedicine and primary care. Campaigns leverage long-standing trusted relationships in order to have the greatest impact in changing the behavior of inappropriate ER use. If you partner with a Telemedicine service make sure your employees know how to use this benefit – provide examples, maybe a wallet-sized card with the 1-800 number, a list of appropriate ailments etc. Provide an online map to the nearest Urgent Care.

Member Engagement through Incentives: It may take the use of incentives to encourage members to change their behavior about the correct use of the ER. To reinforce behavior change, a great way to keep people engaged is to provide incentives to employees who seek appropriate care, including gift cards, coupons, and vouchers for dining, entertainment, and other goods and services.

The use of good data is the key to success.

It is essential to use Data to define the Initiatives: Use data analytics to establish a baseline reading of ER, Urgent Care, Telemedicine and primary care use. This information guides initiatives revealing the hotspots for intervention. Your data analytics should measure the impact of initiatives and allow for adjustments as needed. Use claims analysis to alert employees about a previous ER visit and show them the financial advantage of that visit when compared to using Urgent Care or Telemedicine. The employee will be forever grateful – particularly if they are responsible for large ‘out of pocket’ costs.

Take the time to explain all the benefits to your employees

Employees who manage their health and seek Urgent Care treatment instead of ER services (when appropriate) can expect to enjoy several benefits:

·      Save Time: The average wait time in urgent care centers is a door through door time of 45 minutes. Walk-in patients receive high-quality treatment quickly and efficiently. Very often issues can be addressed via Telemedicine in less than 10 minutes.

·      Save Money: Compare the $140 price tag of an urgent care visit to the $1400 price tag of the average ER visit. Even if a member’s insurance covers these costs completely, members learn that inappropriate use of the ER drives up the cost of healthcare and inevitably the consumer will pay for it. Employers are known to cover the cost of a Telemedicine consult 100%.

·      Reduce stress: Using an urgent care center when an illness or injury strike relieves the stress of handling an unscheduled crisis. When families have easy access to affordable, high-quality and convenient care when they need it, they go home happier and satisfied.

The Obeo Health Organizer module can help you reduce your ER costs – take a test drive of this module today.

Obeo Health featured in Gartner report

The following article is taken from the recent Gartner report – Hype Cycle for U.S. Healthcare Payers, 2016, published: 1 July 2016.


Smart Health Plan Selector Tools – Analysis By Constance Sjoquist

Smart health plan selector tools apply advanced analytics, such as machine learning
and cognitive computing, to large and diverse datasets to assist consumers in shopping for a
suitable health plan based on factors such as their health risk, financial risk tolerance, current
prescriptions and physicians, and experience preferences. These tools are in contrast to simple plan
selection tools that use rule-based scoring to sort and filter health plans.

Position and Adoption Speed Justification: Smart health plan selector tools are advancing to aid individuals in picking health plans that most closely align with their personal, financial, and health risk tolerance and goals, and are being adopted in response to the increase in:


■ Use of enrollment portals where individuals go through the plan selection process alone — with minimal knowledge of plan designs and little human support


■ Number of health plan designs that individuals choose from on enrollment portals, making the decision process for individuals overwhelming


■ Number of employers switching to defined contribution benefit designs to cap their benefit
costs and shift costs onto individual employees, with the assumption that more choices will
make up for higher individual out-of-pocket costs


■ The government’s, employer’s and payer’s desire to align an individual’s health plan selection
with their health history to determine the health plan that will result in the best health outcomes
Most health plan selection tools are embryonic and not truly “smart,” but rely on decision workflows and Excel worksheets to facilitate individual plan selection. Smart health plan selector tools are often coupled with online or mobile enrollment solutions. Expect their velocity along the Hype Cycle to closely align to the velocity of private exchange technologies and other online and mobile enrollment solutions.


Health plan selector tools are often integrated into payer, broker or group enrollment, or private
exchange portals. The limitations of Generation 1 (rule-based) plan selector tools are triggering
Generation 2 plan selector tool development and adoption. With the addition of smart technologies, such as virtual consumer assistants and recommendation algorithms, we expect the rate of adoption of smart health plan selector tools to increase.


User Advice: Healthcare payer CIOs and chief marketing officers (CMOs) should understand that
there are few vendors who actually use smart technologies — the use of data analytics and
algorithms — in their health plan selector tools. Most representative vendors we listed are largely
aspirational. Look for vendors whose solutions can perform perceptual tasks — classifying large
and variant data input streams in nonobvious ways — to inform decision making at a greater depth than using only member-, payer-, provider-, or employer-specific data. By combining health and financial data with behavioral, social, demographic, and other nonhealth data, payers can expect to more closely align individual plan preferences with health outcomes.


Payer CIOs and CMOs should:

■ Drive awareness and quantitative analysis of the growing impact of plan selector tools on payer revenue.
■ Track emerging vendors in this space, paying special attention to evidence of their incremental
growth in efficacy compared with Generation 1 tools.
■ Assess the opportunities for internally built cognitive solutions in this market. This begins with
an inventory of the structured and unstructured data available to train against, including claims,
products, provider network, member profitability, member satisfaction, and renewal.


Use the data from smart health plan selection tools as early in the enrollment phase as possible —beginning with post enrollment data from current plan years. Review how well individuals were
matched to plan selection and what modifications can be made for the next enrollment cycle.
Following the member’s health journey, look for over- or underutilization of benefits, customer
complaints or confusion of how to use their benefits.


Business Impact: All areas of the payer are impacted by the use of smart health plan selector tools.While the decision to implement these tools may reside with sales and marketing leaders, benefits derived will be evident beyond the enrollment stage of the member life cycle, as the payer’s success depends on members who understand how to choose and use their health benefits. Smart health plan selector tools help payers provide members with the optimal health plan that addresses members’ particular health and financial interests in a way that paper- or rule-based health plan selection tools cannot.


By incorporating data analytics and algorithms into the plan selection process, payers can go
beyond simple workflows and lead members along an enrollment path that is more personal and
results in a more suitable health plan match. Substantial consumer value can be unlocked using
cognitive approaches to match consumers to plans that improve their health outcomes and
experience, and lower their health costs. While payers may take a near-term hit on profitability, as enlightened members choose “skinnier” plans, their value will accrue value through improved
competitiveness, sales effectiveness, and member loyalty.


As this space matures and tools incorporate more cognitive capabilities, payers should expect to
improve product placement for desirable members, similar to search engine optimization. Cognitive plan selector tool algorithms can be used in the aggregate to determine whether a payer or an exchange vendor’s product portfolio has an appropriate mix of appealing and beneficial products for their prospective members.


Benefit Rating: High

Market Penetration: Less than 1% of target audience

Maturity: Embryonic

Sample Vendors: Array Health; ConnectedHealth; Obeo Health; Picwell
Recommended Reading:


“Predicts 2016: U.S. Healthcare Payers Are Challenged to Become Digital Health Payers”

“Industry Vision: Mass Personalization of Consumer Healthcare Engagement”


A generic drug strategy is essential for cost savings

Generic drugs are an essential part of any solution to sustaining our health system and are central to efforts that increase patient access and generate savings for patients, taxpayers, employers, payers, providers and others.

Nearly 3.8 billion of the total 4.3 billion prescriptions dispensed in the U.S. in 2014 were filled using generic drugs. This means that generic drugs now account for nearly nine out of every 10 (88%) prescriptions dispensed in the United States. Yet generic prescriptions account for only 28% of total drug spending. Generic drugs were responsible for $254 billion in health system savings in 2014, bringing the total savings over the last 10 years to $1.68 trillion. Generic drug manufacturers can proudly point to a legacy of savings and access that brings expensive treatments within reach for millions of people. It is important to note that savings are growing and are expected to continue to grow.


• A May 2015 report from AARP notes that RETAIL PRICES FOR GENERIC DRUGS FELL AN AVERAGE OF 4% IN 2013, marking nearly a decade of consecutive years of decreasing generic drug costs. That report also notes that 73% OF GENERIC DRUGS in the study EXPERIENCED PRICE DECREASES.

• An August 2015 Drug Channels blog noted that in the SECOND QUARTER OF 2015 ALMOST HALF (44%) OF GENERIC DRUGS EXPERIENCED A DECLINE IN COST.

As an employer in the ‘self-insured’ space it is essential to adopt a comprehensive strategy with respect to the use of generic drugs. This involves providing education on this topic for employees and suggesting generic alternatives. Having access to prescribing data can be used to assess generic usage and illustrate possible cost savings. For more information on this topic please contact a team member at Obeo Health.

Why we started Obeo Health

Welcome to the Obeo Health blog! Obeo Health was created to enable better healthcare decisions. We’re passionate about bringing much-needed transparency to the healthcare choices employees make and transforming the whole experience for consumers and employers alike.

Healthcare choices often leave consumers feeling disempowered and frustrated. Every step can be confusing and almost every encounter within the sector is completely opaque. Employees struggle to choose the health plan that is best for them from both a coverage and cost perspective – often leaving their health plan selection unchanged from year to year because of the lack of information and clarity. Making sense of doctor, insurance and hospital bills is a nightmare. Navigating the system with a chronic disease or serious medical condition can be incredibly overwhelming, taking away from what people should be focused on – their health.

Our founder and CEO, Naveen Saxena, the former CTO of Castlight Health, the groundbreaking enterprise healthcare cloud company, met Adrian Rawlinson, MD, who shared the same concerns about the healthcare system from the perspective of a practicing physician. Many of his patients were struggling to understand their bills; unclear on the jargon; didn’t understand what was or wasn’t covered; and had no idea how much they were actually paying for procedures. Together they recognized the need and opportunity to transform the experience and enable greater engagement and understanding of healthcare choices. During a long meeting in a coffee shop, they discussed all of the issues around lack of transparency, costs of procedures and how people make choices and learn about costs. They recognized with the lack of transparency also comes a great amount of fraud, waste and abuse in the system.

At the same time that the team at Obeo were developing their idea, the healthcare landscape was changing rapidly.  The Affordable Care Act was signed into law and employers were shifting to high-deductible health plans (HDHPs). HDHPs combined with an HSA (tax deductible health savings account) have the potential to be very advantageous to both the employer and the employee. However, the concept of an HDHP is often hard to grasp and the systems in place to explain HDHPs and HSAs to employees during open enrollment were sorely lacking. This underscored the need for tools to increase employee engagement and understanding of complex healthcare choices.

By creating radically simple tools with a strong focus on user experience, Obeo Health has found a way to empower consumers to make better healthcare decisions while at the same time lowering costs for everyone. The team is made up of a diverse group of individuals bringing together experts in clinical medicine, insurance, data science and user experience who are committed to opening up better transparency in healthcare.

Contact us to learn more about how Obeo Health can help your organization increase employee engagement in healthcare decisions and lower costs for everyone.