Every year, employers are paying more to have their employees insured. A study on the annual growth rate of health care costs found that employers are experiencing 5%-to-6% increases in healthcare costs per year.1 Early estimates suggest employers will spend over $730 billion on health benefits in 2018 alone.3
Curbing Healthcare Costs
Growing health care costs can impact both employees and companies:
- Employees are becoming more concerned because some of the costs are being passed on by the employers.1
- Increasing costs are pushing large employers to be more involved in healthcare, instead of relying on insurers.2
- As companies grow and costs increase, the amount spent on health benefits will follow suit.
Saving Money While Providing Better Care
Companies are tackling the increases in health care costs by negotiating with healthcare providers without going through a middleman. By skipping the insurer, large employer groups are spending less and creating a direct path to health care services for their employees. These new plans are becoming more prevalent in areas such as the Silicon Valley, where large employee populations can be monitored day-to-day in the work environment.3
Healthcare providers are being stationed inside the work space for enhanced patient monitoring, and clinics are being built into the work environments to create better access to healthcare services. The new patient-focused care plans strive to prevent health conditions, rather than treating problems after they appear. Monitoring employees with routine check-ups generally costs less than rushing them to the hospital for emergency services.
In California, a partnership between a large employer and a hospital offers a plan that requires healthcare providers to track multiple health indicators on a consistent schedule to prevent unexpected healthcare costs.3 Many employees are reluctant to switch to a plan that further restricts where they can receive health benefits, but employers are providing incentives to lower the costs to employees.
Some of the incentives include lower monthly premiums and copays. Clinics within the workplace often include necessary amenities for healthcare providers to perform general check-ups, physical therapy, and promote an all-inclusive body, mind, and spirit preventative healthcare approach.
What Can We Learn from Large Employers?
Current healthcare plans that support constant monitoring have allowed employers to save money by reducing high-cost services. Many employers are trying to move towards preventing health conditions rather than treating them after they appear. They are also addressing the inherent conflict for providers, where prevention of expensive healthcare costs reduces the number patients taking part in more profitable care such as emergency services. As we watch these new health plans continue to grow we can observe the benefits of constant monitoring and prevention. If employers continue to promote these plans due to improved health outcomes and costs savings, we may want to take a more preventative approach to our own healthcare.
- Barnes, K., Judy, R., & Isgur, B. (2018, June 15). Medical Cost Trend. Retrieved from PWC:
- Caspani, M. (2018, June 15). Soaring costs, loss of benefits top Americans’ healthcare worries: Reuters/Ipsos poll. Retrieved from Reuters: https://www.reuters.com/article/us-usa-healthcare-worries/soaring-costs-loss-of-benefits-top-americans-healthcare-worries-reuters-ipsos-poll-idUSKBN1JB1FD
- Humer, C. (2018, June 11). Fed up with rising costs, big US firms dig into health care. Retrieved from Reuters: https://www.reuters.com/article/us-usa-healthcare-employers-insight/fed-up-with-rising-costs-big-u-s-firms-dig-into-healthcare-idUSKBN1J70ZZ
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