You may have noticed over the past few months (or maybe the past several years, for that matter) that it is difficult to go online, open a newspaper, or turn on the television without hearing about healthcare costs, and the endless speculation as to where the healthcare marketplace may be headed. Despite the uncertainty surrounding the ultimate impact of the Affordable Healthcare Act, or the repeal thereof, what is certain is that the primary underlying drivers of healthcare costs will remain the same – consumer behavior and health risks. Quite simply, behavior and risk drive claim dollars, and claim dollars drive health plan costs. The strategies utilized in addressing these costs is where many employers hit the proverbial “fork in the road”.
What path does your organization take? Are you following the “lagging” indicators or the “leading” indicators of costs? Stated another way, do you break out the Band-Aids or do you address the underlying drivers? The “Band-Aid” approach, an all too common strategy, entails trying to run away from a dollar number that you don’t like, i.e. change plan designs, change carriers, change employee contributions… Those types of changes certainly need to be modeled and explored, but in and of themselves are not sustainable long term strategies. Another school of thought is to address healthcare costs the same way you address any other organizational challenge – get to the underlying drivers of the issue. Be it a product quality issue, workplace safety issue, or healthcare cost issue, rather than reaching for the Band-Aids implement a strategy that identifies and addresses the underlying drivers of the issue! Where are our dollars going and for what? Does our plan design encourage or reinforce unwanted behaviors? How can we better engage our population? Are our members receiving the most appropriate care at the most appropriate place at the most appropriate time? Is our plan in alignment with our overall goals and culture?
Yes, managing and measuring healthcare costs has been and will continue to be a challenge. However, do not underestimate your ability and influence to positively impact how your healthcare costs play out, and, in turn, how you can pursue the goal of changing employee healthcare from one of your largest cost drivers into a competitive advantage.