Employers continue to see a rise in health insurance costs. Annual premiums for employer-sponsored family health coverage reached $16,351 in 2013, up 4% from last year, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2013 Employer Health Benefits Survey.
So how can employers work to control these costs? A key success factor in reducing health insurance costs is the leaderships commitment to this strategy. Can you find top-down leadership commitment to a long-term program that would address the many factors that contribute to high health insurance costs?
Certainly, you can start by identifying immediate cost-reduction opportunities and implement changes that have a quick impact on the cost of health insurance. However, it is also important to identify larger-scale changes that not only result in immediate cost savings, but lead to fundamental changes in the way your company and employers approach health insurance.
In this pursuit, I would suggest you focus on seven strategies:
- Gather and use data. Data about how employees consume health care services can be one of an employers greatest tools in combating rising health insurance costs.
- Provide financial incentives for preferred behaviors. While employers can provide many enticements to get employees to change behaviors, nothing is as effective as money in getting them to embrace wellness options, healthier living and preventive care.
- Improve employee health and wellness. For too long, employers tried to address the cost of providing health insurance to their employees without addressing employees health. Now, most employers have recognized a need to embrace wellness and preventive care.
- Provide resources to the most expensive health care consumers. Spending a little more on people with multiple chronic illnesses or other health problems that require more health care resources can reduce the overall cost of health benefits.
- Move employees to consumerism. A consumer-driven platform not only helps reduce the cost of health insurance for employers, but it also encourage employees to be more engaged with their decisions and, as a result, reduces overall health costs for employer and employee.
- Make changes to the health insurance program. Plan design and vendor assessment is an obvious place to start when addressing health insurance, since changing plans or vendors, or simply making alterations to existing plans often can result in significant changes. Unfortunately, such changes often have only short-term impact, and too many organizations stop there.
- Promote on-site services (if applicable). On-site services not only lower costs to employers, they also make it easier for employees to participate in screenings, preventive care, and more. And, as a result, can lower health costs for the employer and employee.
With these strategies as a guide, find ways to make them fit within your culture. Some will work well, while others may take longer to implement. This next year, focus on writing down a strategy, and before you know it, your results will be measured through a disciplined approach that yields long-term benefits.
Hear more from Thompson, adviser, FirstPerson, at the Workplace Benefits Transitions conference in Chicago during his keynote session: Building A Health Care Strategy Beyond Benefits, on Thursday, Dec. 12 at 10 a.m. CST.
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