I recently conducted a healthcare innovations seminar on “How To Reduce Your Healthcare Costs – Without Changing Benefits For Employees.”  It was well attended by Unions, as well as both public and private sector employers.

The topics included programs related to Reference Based Pricing and the steps to take to implement such a program, how to be prepared in the event of an ACA DOL Audit, Cyber-security, and the benefits, costs, and ROI of an On-Site and Near-Site clinics.

During the course of the presentations, one of the speakers asked to audience a very interesting question:  “Who on your healthcare team has a financial incentive to make your costs go down?”  Your healthcare team can include many players:  your Insurance Company, Third Party Administrator, Reinsurance Company, hospitals, doctors, Pharmacy Benefit Managers, Networks, and perhaps your broker or consultant as well.

When you think about it, none of them have a financial incentive to lower your costs!  In fact, they all have a financial incentive and benefit if your costs go up!  And they actually have the control and ability to make them go up!

Employers are in a very disturbing position when it comes to healthcare costs for their employees.  We’ve come to a point in time where the costs have become so high that offering meaningful benefits to employees is going to become unsustainable – particularly if costs continue to rise at alarming rates.  There are many reasons why costs continue to increase, which has been the subject of previous blogs.  I have also mentioned several techniques that could be implemented and utilized that can actually lower overall costs as well – without changing or reducing benefits to employees.

When you apply the Rule Of 72 to your healthcare costs (insurance premiums, claim costs, prescription drugs, etc.) it will become too expensive for employers to continue to offer benefits that will attract and retain employees.  For most businesses, healthcare costs can be second in company expenses only to payroll.

Techniques should be investigated and explored that will not only reduce the rate of increase, but will actually lower costs.  With many programs, this can be done easily by an Audit of your current health insurance program, regardless of whether you are self-funded or fully insured.  Data and contracts from your plan are needed, but it can be an effective method to understand and identify compelling financial opportunities within your plan, without taking a Leap Of Faith.  Continuing doing the same thing over and over (changing insurance companies, TPAs, and cost shifting to employees) which is the Definition Of Insanity, will not produce the necessary long term reductions in costs.  It’s simply hoping that another change will somehow affect the health of employees, hoping for bigger discounts, hoping that somehow your prescription drug costs will go down, and so on.  The reality is that it’s not changing any of this.

A deep dive into your plan is necessary to get a handle on where things are out of control and what can be done to affect and lower them for the long haul.  I have a personal financial incentive for your costs to go down.  If you would like more information about how this can be accomplished and what is possible, please contact me at [email protected].