Controlling healthcare costs? Employers plan to do what?

Being one of those employers trying to control healthcare costs for many years before I retired, I can relate to all the following. The fact is employers can do virtually nothing to actually control these costs … except one thing and that’s shift more costs to the employees.

Employers have been fighting a losing battle for decades, nothing has worked and nothing will, but they keep trying and making consultants wealthy in the process 🤑

U.S. employers expect healthcare costs to rise by 6% next year, after the 5% increase they’ve seen in 2022, according to a Willis Towers Watson (WTW) survey. Over half (54%) of the approximately 455 respondents who employ 8.2 million people say that their healthcare costs will be over budget this year.

“With no end in sight to projected cost increases, the need to manage healthcare costs and address employee affordability has never been greater,” Courtney Stubblefield, WTW’s insights and solutions leader, said in a press release.

Some measures employers are considering for next year include:

  • Structuring payroll contributions to cut costs for certain groups, such as low-wage earners (28%)
  • Offering low-deductible plans to reduce cost sharing for employees (32%)
  • Combating fraud, waste and abuse (27%)
  • Increasing funding for their healthcare plans without taking that money from paychecks or other benefits (20%)
  • Implementing a defined contribution strategy with a fixed dollar amount that will differ according to what tier an employee is at (41%)
  • Using employee payroll contributions as a percent of total compensation or income as the basis for benefit design decisions (13%)
  • Hiking out-of-pocket costs for the use of less efficient services or sites of service such as non-preferred labs (23%)
  • Adding or improving enhanced voluntary benefits or use of vendors in cases of catastrophic events (35%)
Source: Fierce Healthcare

4 comments

  1. Healthcare has no solutions for costs since the price is baked in the product. Employers can go round and round and yet the costs go up every year.
    Blaming employees for not being super human and having the audacity to need healthcare is a non starter. So the solution is to offshore treatment and ship employees who need a knee replacement or some other expensive treatment to Mexico, India, or some other country that can provide decent care at a cost cheaper than here. Either that or go to the treatment plan the army provided me years ago, that is report on sick call and get your 2 Aspirin and go back to duty.

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  2. Options exist. However, the issue remains one where control remains in Human Resources; it should be moved to finance where the objective should be changed to optimizing spend for all associates, not insulating those (or their dependents) who have significant spend. Employers need to structure coverage so that anti-selection is an asset, not a liability.

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  3. The only thing that my employer could have done is to take some of the stress out of the job which they often created. That might have delayed my hypertension which is hereditary.

    But I knew that up front when you work 24/7 health suffers. I even was forced to attend classes that told us that shiftwork was bad for my health. It wasn’t until my last 10 years of working did my poor lifestyle of eating wrong, lack of exercise, and poor sleep habits due to shiftwork catch up to me. I believe I only took 7 sick days in my working career so I think the company got a good deal by me selling them my body to abuse on shiftwork.

    I have Crohn’s Disease and there is no family history and I was diagnosed after working for 25 years. I was lucky that I never missed a day of work from it. There is nothing that I could have done to prevent it. Yes my employer’s health plan is paying big money to treat it.

    During my working career, my wife had two issues, one with cancer. There is nothing an employer can do about cancer until they start doing DNA testing the whole family before hiring employees. Imagine the lawsuits on that one where your were denied a job because someday your wife might get cancer. That racist! OR you get fired because your child might get cancer before turning 18.

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  4. A company I worked for once announced that their employee health insurance costs were too high because we were too fat/ too many with high blood pressure. The solution was to bring in a new cafeteria vendor who only offered low calorie meals. (Desserts and snack such as chips were no longer sold also). They also raised the price significantly so most employees began to brown bag it or go to local restaurants for take out because it was less expensive . The cafeteria vendor could not operate profitably so they left , and a mainstream cafeteria was reinstated because of so many complaints. We already had an employee fitness center in our building for years .

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