In America we have created the best healthcare system in the history of the world. But this "best" system faces some difficult challenges. Employers need to rethink their healthcare focus from just buying an insurance policy to a managed, data driven healthcare strategy.
As costs goes up, employers either shift them to employees or absorb them. It's financially painful for both employer and employee but easy to implement and embraced by many human resource professionals. But as premiums go up more and more, cost is shifted to employees through higher premium contributions and higher deductibles and co-pays when they use medical services.
Another issue is that employers monitor discounts (price) but not utilization. This is like monitoring how much natural gas costs to heat your house but not how much natural gas you use. By spending a little more on insulation you save a lot on natural gas. By spending a little on prevention, you could save a lot on healthcare.
Employers receive claims data reports, which are helpful, but without a plan to affect an outcome it's all just data. Unfortunately, healthcare is one of the few things in life we purchase without having a clue what it will cost, although that same quality health service can vary by hundreds and even thousands of dollars from one provider to another.
Employers also tend to focus solely on large claims, which is akin to looking in a rearview mirror. Too often, there is no effort or strategy in place to keep healthy employees healthy so they can avoid some of those large claims all together.
While employer-sponsored health fairs and wellness screens are nice events with plenty of good information, employers I've spoken with tell me they get low participation and it does little to engage employees to change behavior. So, what is the solution?
Here are nine employer strategies we are sure to see in 2015.
For the healthcare system in the United States to remain the best in the world it is imperative for employers to develop and implement plans to better manage their healthcare benefit costs without further shifting costs to employees. The time is right for employers to redirect their focus from the 10%-20% administrative cost of their healthcare by just bidding and quoting their insurance to the 80-90% claim cost where they can not only enjoy lower cost but also employees that are healthier, happier and more productive.
Randy Boss is a Certified Risk Architect at Ottawa Kent in Jenison, MI. He is a Certified WorkComp Advisor (CWCA), and a lead instructor for the Institute of Benefit & Wellness Advisors, training agents how to bring risk management to benefits.